Question

If the value of the CPI in 2010 was 218.1 and the value of the CPI in 2011 was 224.9, calculate the annual rate of inflation over that period (round your answer to one decimal place) :

Answer 1

Answer: The annual rate of inflation over that period is 3.1%.

Explanation:

Since we have given that

Value of CPI in 2010 = 218.1

Value of CPI in 2011 = 224.9

We need to find the annual rate of inflation over the period.

So, Annual rate of inflation would be

`(CPI_(x+1)-CPI_(x))/(CPI_x)* 100\\\\=(224.9-218.1)/(218.1)* 100\\\\=(6.8)/(218.1)* 100\\\\=3.1\%`

Hence, the annual rate of inflation over that period is 3.1%.

Answer 2

3.1%

Explanation:

The percentage change is given by ...

% change = ((new value)/(old value) -1) × 100%

= (224.9/218.1 -1)×100% ≈ (1.03118 -1)×100% ≈ 3.1%