If the Consumer Price Index was 170 in one year and 180 in the next year, then the rate of inﬂation was approximately
A) 5.5 percent.
B) 5.9 percent.
C) 6.3 percent.
D) 7.2 percent.

Question

Quizplus · Accepted Answer

To find the rate of inflation, we use the formula:

Rate of Inflation = ((CPI in year 2 - CPI in year 1) / CPI in year 1) x 100

Plugging in the given values, we get:

Rate of Inflation = ((180 - 170) / 170) x 100
                  = (10 / 170) x 100
                  = 5.88 or 5.9 percent (rounded to one decimal place)

Therefore, the closest answer choice is B: 5.9 percent.

If the Consumer Price Index Was 170 in One Year