If the Consumer Price Index changes from 120 in year one to 144 in year two,the rate of inflation in the intervening year is
A)10%.
B)12.5%.
C)20%.
D)25%.
E)30%.

Name: If the Consumer Price Index changes from 120 in year one to 144 in year two,the rate of inflation in the intervening year is A)10%. B)12.5%. C)20%. D)25%. E)30%.
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Question

Quizplus · Accepted Answer

The rate of inflation is calculated by the formula [(New CPI - Old CPI) / Old CPI] * 100. Here, it is [(144 - 120) / 120] * 100 = 20%.

If the Consumer Price Index Changes from 120 in Year