Question

The table represents the Consumer Price Index for a basket of goods and services for three consecutive years. Calculate the inflation rate for 2014.

2012 (base year) 100

2013 . 125

2014 . 180

A. 50 percent
B. 55 percent
C. 44 percent
D. 40 percent

Answer 1

The Correct Answer Is C.) 44 percent.... Hope This Helps!!

Answer 2

Assuming the prices given are at the end of the year, you calculate the inflation as:

inflation percent = change in prices in a year / price at the end of the previos year

inflation percent in 2014 = [price at the end of year 2014 - price at the end of year 2013] *100 / (price at the end of year 2013)

inflation percent in 2014 = [180 - 125] *100 / 125 = 40%

Answer: 44% (option C.)