An enquiry into the budgets of the middle class families in a certain city gave the following information;
| Expenses on items | Food | Fuel | Clothing | Rent | Misc. |
|
| 35% | 10% | 20% | 15% | 20% |
| Price (in Rs) in 2004 | 1500 | 250 | 750 | 300 | 400 |
| Price (in Rs) in 1995 | 1400 | 200 | 500 | 200 | 250 |
What is the cost of living index of 2004 as compared with 1995?
| Items | Weight
W | Price in 1995 P0 | Price in 2004 P1 |
| WR |
| Food | 35 | 1400 | 1500 |
| 3,749.90 |
| Fuel | 10 | 200 | 250 |
| 1,250 |
| Clothing | 20 | 500 | 750 |
| 3,000 |
| Rent | 15 | 200 | 300 |
| 2,250 |
| Misc. | 20 | 250 | 400 |
| 3,200 |
|
|
|
|
|
|
|
Cost of Living Index = 134.50
Thus, the prices rose by 34.50% during 1995 and 2004.