Question

In the Republic of​ Priceland, in 2009 the consumer price index was 168.00. In 2010 the index increased to 180.60. Calculate the rate of inflation in Priceland between 2009 and 2010.

Answer 1

7.5

Step-by-step explanation:

Data provided

CPI in the year 2010 = 180.60

CPI in the year 2009 = 168.00

The computation of rate of inflation is shown below:

Inflation rate =((CPI in the year 2010 - CPI in the year 2009) ÷ CPI in the year 2009) × 100

= (180.60 - 168.00) ÷ 168.00 × 100

= 12.6 ÷ 168.00 × 100

= 0.075 × 100

= 7.5

Therefore for computing the inflation rate we simply applied the above formula.