If the consumer price index was 170 in one year and 180 in the next year, then the rate of inflation from one year to the next was approximately:
A)5.5 percent.
B)5.9 percent.
C)5.3 percent.
D)7.2 percent.

Question

Quizplus · Accepted Answer

To calculate the rate of inflation, we use the following formula:

(Inflation rate) = [(CPI in current year - CPI in previous year)/CPI in previous year] x 100

Plugging in the given values:

(Inflation rate) = [(180 - 170)/170] x 100 
= (10/170) x 100 
= 5.88

Rounding to one decimal place, the rate of inflation is approximately 5.9 percent, which is answer choice B.

If the Consumer Price Index Was 170 in One Year