The consumer price index is 132 in 2004 and 112 in 2003 when the base year is 1997.The 2004 annual inflation rate,using 2003 as a base year,is
A)17.8 percent.
B)20 percent.
C)12 percent.
D)unknown,as there is not sufficient information.

Question

Quizplus · Accepted Answer

To calculate the inflation rate, we use the formula: 
Inflation rate = ((CPI in current year - CPI in base year)/CPI in base year) x 100%

Using this formula, we get: 
Inflation rate = ((132-112)/112) x 100% = 17.8%

Therefore, the answer is choice A) 17.8 percent.

The Consumer Price Index Is 132 in 2004 and 112