If the CPI was 99.6% in January 2001 and 128% in January 2005, what was the approximate annual inflation over the intervening period?
A)28.4%
B)7.1%
C)6.4%
D)5.0%
E)0.4%

Question

Quizplus · Accepted Answer

The annual inflation rate can be calculated using the formula for compound annual growth rate (CAGR): [(Final Value/Initial Value)^(1/Number of Years)] - 1. Here, it is [(128/99.6)^(1/4)] - 1, which is approximately 6.4%.

If the CPI Was 99