The price index in 2009 is 120, and in 2010 it is 127.2. What is the inflation rate?

Name: The price index in 2009 is 120, and in 2010 it is 127.2. What is the inflation rate?
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Question

Quizplus · Accepted Answer

To calculate the inflation rate, we use the following formula:

Inflation rate = (Price index in year 2 - Price index in year 1) / Price index in year 1 x 100

Plugging in the values we have, we get:

Inflation rate = (127.2 - 120) / 120 x 100
Inflation rate = 6%

Therefore, the answer is B) 6 percent.

The Price Index in 2009 Is 120, and in 2010