Simple Average of Price Relatives Calculator
सरल मूल्यानुपात माध्य विधि कैलकुलेटर
Calculate Price Index using Simple Average of Price Relatives Method with step-by-step solution
Simple Average
Weighted Average
| Commodity | Base Year Price (P₀) | Current Year Price (P₁) | Weight (W) |
|---|
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Simple Average of Price Relatives Formula:
\[
P_{01} = \frac{\Sigma \left( \frac{P_1}{P_0} \times 100 \right)}{n}
\]
\[
P_{01} = \frac{\Sigma \left( \frac{P_1}{P_0} \times 100 \times W \right)}{\Sigma W}
\]
Price Index Calculation Result
Price Index (P₀₁)
0.00
Percentage Change
0.00%
Number of Items (n)
0
Sum of Relatives
0.00
Interpretation:
Enter data and calculate to see interpretation
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Step 1: Data Preparation
Step 2: Calculate Price Relatives
Step 3: Calculate Sum of Price Relatives
Step 4: Apply Average Formula
Step 5: Interpretation
Simple Average of Price Relatives Method: Complete Guide
सरल मूल्यानुपात माध्य विधि: पूरी मार्गदर्शिका
What is the Simple Average of Price Relatives Method?
The Simple Average of Price Relatives Method is a statistical method used to calculate price index numbers. It involves calculating the price relative for each commodity and then taking the simple average of all these relatives.
Mathematical Formula
The formula for Simple Average of Price Relatives Method is:
\[
P_{01} = \frac{\Sigma \left( \frac{P_1}{P_0} \times 100 \right)}{n}
\]
Where:
- \( P_{01} \) = Price index number for current year with respect to base year
- \( P_1 \) = Price of commodity in current year
- \( P_0 \) = Price of commodity in base year
- \( n \) = Number of commodities
Weighted Average of Price Relatives
For more accurate results, the weighted average method is used:
\[
P_{01} = \frac{\Sigma \left( \frac{P_1}{P_0} \times 100 \times W \right)}{\Sigma W}
\]
Where \( W \) represents the weight assigned to each commodity based on its importance.
Advantages of This Method
- Simple and easy to understand
- All commodities get equal importance in simple average method
- Useful when all items are equally important
- Can be used for both price and quantity indices
Frequently Asked Questions
What is a price relative?
A price relative is the ratio of current year price to base year price, usually expressed as a percentage. It shows how much the price has changed relative to the base year.
When should I use Simple Average vs Weighted Average method?
Use Simple Average when all items are equally important. Use Weighted Average when some items are more important than others and need to be given different weights.
How do I interpret a price index of 115?
A price index of 115 means there has been a 15% increase in prices from the base year to the current year.