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# Calculate Index

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## How to calculate an index number?

Calculating an index number is an essential economic technique used to measure changes in the value of a specific variable (like price or quantity) over time. The index number is usually expressed in terms of a percentage, with the base year set at 100%.

An index number can, for example, be used to measure inflation. Suppose we want to see how the price of a particular product has changed since the base year. If the product cost \$10 in the base year and now costs \$15, the index number would be 150. This means the product's price has increased by 50% since the base year.

The index number is calculated by dividing the value of the report year by the value of the base year, and then multiplying the result by 100. Here's the formula:

`Index Number = (Value of report year / Value of base year) * 100`

This can easily be calculated using a calculator. Simply input the value of the report year and the base year, and the calculator will compute the index number.