Que. 2 (d) The following table gives the averages wholesale prices of four fruits for the years 1996 to 2000. Compute Chain Base Index Number.

Fruit ¯ /  Year®	1996	1997	1998	1999	2000
Banana	14	18	16	15	17
Oranges	20	22	15	18	26
Mango	17	25	18	19	20
Apple	19	20	22	23	24

 

For each period
step 1 : link relative for ith period
 = figure of ith  period * 100 figure of preceding period link relatives based on preceding years
 

fruit / year       1996               1997           1998               1999                2000
banana            100                 450               89                  94                 113 
oranges           100                 110               68                 120                 144 
mango             100                 147               72                 105                 105
apple               100                105               110                104                 104
total of link       400                 812              329                423                 466

relatives
averages          100                  203                 82.25               105.75            116.5
 
step 2 : chain link relatives together by successive multiplication to get chain indices 
chain index
 = current years link relatives *preceding year chain index / 100

chain    100      203*100/100 82.25*203/100   105.75*166.96/100  116.5*176.6/100   
                        =203                =166.96          =176.6                        =205.70