Using the data given below calculate price index numbers for the year 2020 by i) Laspeyre’s formula and ii) Paasche’s formula with the year 2010 as base
| Commodity | Price (Rs.) | Quantity (kg) | ||
| 2010 | 2020 | 2010 | 2020 | |
| Sugar | 9.3 | 4.5 | 100 | 90 |
| Coffee | 6.4 | 3.7 | 11 | 10 |
| Tea | 5.1 | 2.7 | 5 | 3 |
To calculate the price index numbers for the year 2020 using Laspeyre's formula and Paasche's formula with the year 2010 as the base, we first need to understand the basic formulas for these methods.
1. Laspeyre's Price Index:
\[ \text{Laspeyre's Index (L)} = \left(\frac{\sum P_{t}Q_{b}}{\sum P_{b}Q_{b}}\right) \times 100 \]
Where:
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