Assume that the CPI in 2015 is 115.The inflation rate is 1.5% in 2016 and 2.5% in 2017.What is the value of the CPI in 2016 and 2017?

Question

Quizplus · Accepted Answer

To find the value of the CPI in 2016, we need to multiply the CPI in 2015 by (1 + inflation rate 2016) = 1.015.
CPI 2016 = 115 x 1.015 = 116.725
To find the value of the CPI in 2017, we need to multiply the CPI in 2016 by (1 + inflation rate 2017) = 1.025.
CPI 2017 = 116.725 x 1.025 = 119.39375 ≈ 119.6
Thus, the answer is D) 116.7 and 119.6.

Assume That the CPI in 2015 Is 115