If the CPI in 2015 was 114.7 and the CPI in 2016 was 124.5, then the rate of inflation between 2015 and 2016 was
A) 7.9%.
B) 8.5%.
C) 9.8%.
D) 14.7%.

Question

Quizplus · Accepted Answer

To find the rate of inflation, we use the formula:

(rate of inflation) = ((CPI in 2016 - CPI in 2015) / CPI in 2015) x 100%

Plugging in the numbers, we get:

(rate of inflation) = ((124.5 - 114.7) / 114.7) x 100%
(rate of inflation) = (9.8 / 114.7) x 100%
(rate of inflation) = 0.0855 x 100%
(rate of inflation) = 8.55%

Rounding to one decimal place, we get a rate of inflation of 8.5%, which is answer choice B.

If the CPI in 2015 Was 114