If the CPI in 2015 was 104.5 and the CPI in 2016 was 110.5, then the rate of inflation between 2015 and 2016 was
A) 5.4%.
B) 5.7%.
C) 6.5%.
D) 7.0%.

Question

Quizplus · Accepted Answer

The formula for calculating the rate of inflation between two years using CPI is:

Rate of inflation = ((CPI in Year 2 - CPI in Year 1) / CPI in Year 1) x 100

Using the CPI values provided:

Rate of inflation = ((110.5 - 104.5) / 104.5) x 100 = 5.74 (rounded to one decimal place)

Therefore, the rate of inflation between 2015 and 2016 was 5.7%. The best choice is B.

If the CPI in 2015 Was 104