If the CPI this year is 220 and was 200 in last year, the annual inflation rate between the two years is
A) 20 percent.
B) 10 percent.
C) 2 percent.
D) 5 percent.

Question

Quizplus · Accepted Answer

To calculate the annual inflation rate between the two years, we use the following formula:
Inflation rate = [(CPI this year - CPI last year)/CPI last year] x 100

Plugging in the values, we get:
Inflation rate = [(220-200)/200] x 100
Inflation rate = (20/200) x 100
Inflation rate = 10 percent

Therefore, the annual inflation rate between the two years is 10 percent, making choice B) the correct answer.

If the CPI This Year Is 220 and Was 200