Exhibit 13-1 Consumer price index

-As shown in Exhibit 13-1,the rate of inflation for Year 4 is:
A)5 per cent.
B)10 per cent.
C)19 per cent.
D)20 per cent.
E)25 per cent.

Question

Exhibit 13-1 Consumer price index
 
-As shown in Exhibit 13-1,the rate of inflation for Year 4 is:
A)5 per cent. 
B)10 per cent. 
C)19 per cent. 
D)20 per cent. 
E)25 per cent.

Quizplus · Accepted Answer

To calculate the rate of inflation, we need to compare the CPI for Year 4 with that of Year 3. The CPI for Year 3 was 80, and for Year 4 it is 95. The percentage change can be calculated as [(New Value - Old Value)/Old Value] x 100. Therefore, [(95-80)/80] x 100 = 18.75%. Rounded to the nearest percent, the rate of inflation for Year 4 is 19%. Choice C is the correct answer.

Exhibit 13-1 Consumer Price Index