Over a 10-year period, the Consumer Price Index doubled. Based on this information and using the rule of 70, we can say that the average annual rate of inﬂation over this period was approximately
A) 10 percent.
B) 9 percent.
C) 7 percent.
D) 5 percent.

Question

Quizplus · Accepted Answer

The rule of 70 states that to find the approximate number of years it takes for a variable to double, you divide 70 by the annual growth rate. In this case, because the CPI doubled over a 10-year period, we take 70 and divide it by 10 to get 7. Therefore, the average annual rate of inflation over this period was approximately 7 percent.

Over a 10-Year Period, the Consumer Price Index Doubled