When an index number is calculated without assigning explicitly any weights to the different items under study it is a case of constructing an unweighted index number. In such cases, all the items are weighted equally, or multiplied by the unity i.e.1. The formula for computing this index number is:
P01 ∑P1/ ∑q1= × 100
Where, P01 = unweighted or simple price index of the current year of a number of commodities in relation to a base year.
∑P1 = Sum of the prices of the items in the current year.
∑P0= Sum of the prices of the items in the base year.
100 = Common denominator.