The price index is calculated as

The correct formula for calculating a price index is: current price / base year price X 100. A price index measures the average price changes of goods and services over time. The formula compares the current price of a specific good or service to the price of the same good or service in a chosen base year. By comparing these two prices, we can calculate the percentage change in price over time, which is represented as a percentage value. This percentage value is multiplied by 100 to get the price index.