Asimple index numberis used in data-driven decision making to measure relative change in a variable over time, commonly prices, quantities, or values. The standard formula for a simple price index compares the value in the current period to a base period and expresses the change as a percentage.

The correct formula is thecurrent price divided by the base year’s price, multiplied by 100. This standardization allows analysts and managers to easily interpret changes relative to a reference point. An index value of 100 indicates no change from the base year, values above 100 indicate an increase, and values below 100 indicate a decrease.

This approach is widely used in economic analysis, inflation tracking, and business trend evaluation because it simplifies comparisons across time. Dividing the base year by the current price would reverse interpretation, and omitting multiplication by 100 would fail to express the index in percentage terms.

Therefore, optionAcorrectly represents the formula for calculating a simple index number.