How is the index value calculated when determining Index values?

The calculation of index values is structured to express the current year's number in relation to a base year, allowing for an analysis of how a figure has changed over time. The correct approach for determining the index value is to take the current year's number, divide it by the base year's number, and then multiply the result by 100.

This formula effectively standardizes the index value to a base of 100, making it easy to compare over different periods. For example, if the base year represents a value of 50, and the current year has a value of 75, using this formula would yield an index value of (75/50) x 100 = 150. This indicates the current value is 150% of the base year value, illustrating growth.

In contrast, the other options do not utilize this proper method for establishing a meaningful comparison. The first choice suggests dividing the base year's number by the current year's, which would produce a ratio that is not useful for expressing changes over time. The third choice involves simply multiplying the base year's number by 100, which does not reflect any change or relation to the current year. Lastly, the fourth option suggests subtracting values, which fails to capture the relative scale of difference needed to