The table shows consumer price index data for the United States. Based on this information, what is the rate of inflation in 2006?
$$\begin{array}{l}
\text { U.S. CONSUMER PRICE INDEX }\
\begin{array} { | c | c | }
\hline \text { YEAR } & \begin{array} { c }
\text { CONSUMER } \
\text { PRICE INDEX }
\end{array} \
\hline 2005 & 195.27 \
\hline 2006 & 201.56 \
\hline 2007 & 207.34 \
\hline 2008 & 215.25 \
\hline 2009 & 214.57 \
\hline 2010 & 218.08 \
\hline
\end{array}
\end{array}$$
A)3.81%
B)3.22%
C)1.64%
D)2.87%

Question

The table shows consumer price index data for the United States. Based on this information, what is the rate of inflation in 2006?
$$\begin{array}{l}
\text { U.S. CONSUMER PRICE INDEX }\
\begin{array} { | c | c | } 
\hline \text { YEAR } & \begin{array} { c } 
\text { CONSUMER } \
\text { PRICE INDEX }
\end{array} \
\hline 2005 & 195.27 \
\hline 2006 & 201.56 \
\hline 2007 & 207.34 \
\hline 2008 & 215.25 \
\hline 2009 & 214.57 \
\hline 2010 & 218.08 \
\hline
\end{array}
\end{array}$$
A)3.81%
B)3.22%
C)1.64%
D)2.87%

Quizplus · Accepted Answer

To calculate the rate of inflation, we need to find the percentage increase in CPI from 2005 to 2006. The CPI in 2005 was 195.3 and in 2006 it was 201.6. Using the formula:
Rate of inflation = ((New CPI - Old CPI)/Old CPI) * 100
= ((201.6 - 195.3)/195.3) * 100
= 3.22%
Therefore, the rate of inflation in 2006 was 3.22%. The correct answer is B.

The Table Shows Consumer Price Index Data for the United