Question

Suppose the CPI increases this year from 208 to 221. What is the rate of inflation for this year? Round your answer to the nearest tenth of a percent.

Answer 1

SOLUTION:

We are to find the rate of inflation in the given question;

The formula to be used is;

Inflation rate =

$\frac{\text{CPI}_{present}-CPI_{previous}}{CPI_{previous}_{}}\text{ X 100}$$\begin{gathered} \frac{221-208}{208}\text{ X }\frac{100}{1} \\ \\ \frac{13}{208}X\frac{100}{1} \\ \\ 6.25\text{ \%} \\ 6.3\text{ \% (nearest tenth of a percentage)} \end{gathered}$

CONCLUSION

The inflation rate of CPI that increased from 208 to 221 to the nearest tenth of a percentage is 6.3%.