Assume that the consumer price index for 2009 was 124.0 and for 2010 was 130.7. What was the inflation rate between the two years?
A)0.95%
B)5.40%
C)6.70%
D)3.20%

Question

Quizplus · Accepted Answer

To calculate the inflation rate between two years, we use the formula:

Inflation rate = ((CPI in Year 2 - CPI in Year 1) / CPI in Year 1) x 100

Plugging in the values we have, we get:

Inflation rate = ((130.7 - 124.0) / 124.0) x 100 = 5.40%

Therefore, the best choice is B, with an inflation rate of 5.40%.

Assume That the Consumer Price Index for 2009 Was 124