1. What Is Index Calculation?

Index calculation is a statistical method used to measure relative changes in variables over time. It compares current values to a base period value, providing a percentage that indicates growth or decline.

2. How Does The Calculator Work?

The calculator uses the standard index formula:

Where:

• \( Current \) — Current value or measurement
• \( Base \) — Base period value or reference point
• \( 100 \) — Scaling factor to express as percentage

Explanation: The formula calculates the ratio of current value to base value, then multiplies by 100 to convert to percentage form. An index of 100 indicates no change from base period.

3. Importance Of Index Numbers

Details: Index numbers are crucial in economics, finance, and statistics for tracking price changes, economic indicators, stock performance, and measuring inflation or deflation over time.

4. Using The Calculator

Tips: Enter current value and base value in the same units. Both values must be positive numbers. The result shows the index as a percentage relative to the base period.

5. Frequently Asked Questions (FAQ)

Q1: What does an index of 120 mean?
A: An index of 120 indicates that the current value is 20% higher than the base value (120 - 100 = 20% increase).

Q2: Can index numbers be less than 100?
A: Yes, an index below 100 indicates the current value is lower than the base value. For example, index 85 means 15% decrease.

Q3: What are common uses of index numbers?
A: Consumer Price Index (CPI), stock market indices, production indices, inflation measurement, and economic indicators.

Q4: How do I choose a base period?
A: Choose a stable, representative period that serves as a meaningful reference point for comparison.

Q5: Are there different types of index formulas?
A: Yes, including Laspeyres, Paasche, Fisher ideal index, and others for different statistical applications.