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Suppose the cpi was 120 last year and is 144 this year.

a. what is this year's rate of inflation?

2 Answers

4 votes

16.67%

Inflation is (new CPI - old CPI) / old CPI

(144-120)/144

24/144 = .16666666667

Convert to a percent = 16.67%

User Fratrik
by
5.3k points
6 votes

Answer: 16.7%

Step-by-step explanation:

Inflation is defined as the increase in price of good and services.

Given last year cpi to be 120 and that of this year is 144, increase in cpi will be 144-120 which is 24cpi.

Year rate of inflation = final cpi - initial cpi/final cpi × 100%

Rate of inflation = 144-120/144×100%

Rate of inflation = 24/144×100%

Rate of inflation = 16.7%

Therefore the year rate of inflation is 16.7%

User Paul Kelly
by
4.7k points