Question

As reported by the Bureau of Labor Statistics, the CPI for Airfare in 2263 was 586.1 (using a base year of 1914 = 100). The CPI for Airfare in 2264 was 605.7. Based on this data, what was the inflation rate of airfare from 2263 to 2264?

Answer 1

Answer: 3.34%

Explanation:

Firstly, we have to calculate the difference in CPI from the year 2263 to 2264 which will be:

= 605.7 - 586.1

= 19.6

Then, the inflation rate will be:

= Difference in CPI / Base CPI × 100

= 19.6/586.1 × 100

= 3.34%

The inflation rate is 3.34%.