Question

The index number representing the price level changes from 109 to 113 in one year. The inflation rate during the year is _____ percent. Round your answer to two digits to the right of the decimal (for example, 7.19) and do NOT include the word "percent" or the percent symbol in your answer. Negative rates are possible.

Answer 1

First, get the difference between the price level changes.

$113-109=4$

Then, divide it by the initial price level, which is 109.

$\frac{4}{109}=0.0367$

Multiply by 100 to get its percent.

$0.0367\times100=3.67$

Thefore, the inflation rate during the year is 3.67 percent.