1. Aggregate expenditure method:

(i) Index number = \(\frac{Σp_1q_0}{Σp_0q_0}\)

Where, Σp_{1}q_{0} = Total expenditure of current year

Where, Σp_{0}q_{0} = Total expenditure of base year

[Note: This is Laspeyre’s Index number.]

(ii) Index number = \(\frac{Σp_1q_0}{Σp_0q_0} × 100\)

Where, Σp_{1}q_{1} = Total expenditure of current year

Σp_{0}q_{0} = Total expenditure of base year corresponding to quantity of current year

[Note: This is Paasche’s Index number.]

2. Family budget method:

Index number = \(\frac{ΣIW}{ΣW}\)

Where, I =\(\frac{ p_1}{p_0} × 100\)

W = p_{0}q_{0} = Expenditure of base year

[Note: In the formula, if we replace, Pi

W = p_{0}q_{0 }> I = p1p0 it is Laspeyres Index number.]