Sean McCarthy earns $20,000 a year; John Nowak, $35,000. What is John's income as an index using Sean's income as the base?

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Typically when using ratios in this way, you know that it involved dividing one number by the other. You can guess what the ratio should look like (less or greater than 1.0) then try one or both until you get the guessed answer.

In this case, John's income should obviously be greater than Sean's; it should come to greater than 1.0. Therefore do 35000/20000 = 1.75 or 175%

Had you tried 20000/35000 = 0.5714285714285714 or 57.143% that would not have made sense, as John's income would appear to be less than Sean's, which is not the case.

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