Question

If the cpi increases from 250 to 275 for one year, the rate of inflation for that year is

Answer 1

the rate of inflation for that year is 10%

To calculate the rate of inflation for that year, we need to use this formula:

Rate of inflation = (CPI2 - CP1) / CPI1

Rate of inflation = (275 - 250) / 250

Rate of inflation = 25 / 250

Rate of inflation = 1 / 10

Rate of inflation = 10 %