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.