Final answer:
To calculate the inflation rate from 2012 to 2013, subtract the price index of 2012 from that of 2013, divide by the 2012 price index, and then multiply by 100. The inflation rate between these years was 5%.
Step-by-step explanation:
The question you asked is about the calculation of the inflation rate, which is a measure of how much the overall price level of goods and services has risen over time.
To calculate the inflation rate between two consecutive years, you take the price index of the later year, subtract the price index of the earlier year, then divide by the price index of the earlier year and multiply by 100 to get a percentage. So for your given example, where the price index was 120 in 2012 and 126 in 2013, you would calculate the inflation rate using the following formula:
Inflation Rate = ((Price Index in Later Year - Price Index in Earlier Year) / Price Index in Earlier Year) × 100
For your specific question:
Inflation Rate = ((126 - 120) / 120) × 100
Inflation Rate = (6 / 120) × 100
Inflation Rate = 0.05 × 100
Inflation Rate = 5%
Therefore, the inflation rate from 2012 to 2013 was 5%.