If inflation in Wonderland averaged about 20% per month in 2008, what was the annual inflation rate?
A)20%
B)240%
C)790%
D)890%

Name: If inflation in Wonderland averaged about 20% per month in 2008, what was the annual inflation rate? A)20% B)240% C)790% D)890%
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Question

Quizplus · Accepted Answer

To calculate the annual inflation rate, we need to use the formula (1 + monthly inflation rate)^12 - 1. Plugging in 20% as the monthly inflation rate, we get (1 + 0.2)^12 - 1 = 7.9 or 790%. Therefore, the answer is C.

If Inflation in Wonderland Averaged About 20% Per Month in 2008