If a price index increased from 400 to 440 over the course of a year, then the inflation rate is
A) 4 percent.
B) 9 percent.
C) 10 percent.
D) 40 percent.

Question

Quizplus · Accepted Answer

The formula for calculating inflation rate is [(New Price Index-Old Price Index)/Old Price Index] x100. Plugging in the given values, [(440-400)/400] x100 = 10 percent. Therefore, the inflation rate is 10 percent.

If a Price Index Increased from 400 to 440 Over