Assume that the consumer price index in 2016 was 120 and in 2017 it was 126.What was the rate of inflation in 2017?

Question

Quizplus · Accepted Answer

To find the rate of inflation, we use the formula:

Rate of inflation = ((CPI in current year - CPI in previous year) / CPI in previous year) x 100%

Substituting the given values, we get:

Rate of inflation = ((126-120)/120) x 100%
                  = (6/120) x 100%
                  = 5%

Therefore, the answer is B, 5%.

Assume That the Consumer Price Index in 2016 Was 120