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In 2004 wheat was selling at an average ...

In 2004 wheat was selling at an average price Rs. 120 per 20 kg, cloth Rs. 20 per metre, house rent Rs. 300 per house and other items Rs. 100 per unit. By 2018 cost of wheat rose by Rs. 180 per 20 kg, house rent by Rs. 450 and other items doubled in price. Using relative prices, index number for the year 2018 with 2004 as base year was 160. By how much the cloth rose in price during the period?

Text Solution

Verified by Experts

Let the rise in price of cloth be X.

`P_(01)=(Sigma((P_(1))/P_(0)xx100))/(N)`
`implies 160 = (500+5X)/(4)`
implies 640 = 500 + 5X
implies 5X = 140
`X = (140)/(5)`
= 28
Hence, the rise in the price of cloth = Rs. 28 - Rs. 20 = Rs. 8 per metre.
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