To calculate the annual rate of inflation for a basket of goods, find the percentage change in the cost of purchasing the basket of goods between time periods.
To calculate the annual rate of inflation for a basket of goods, you need to find the percentage change in the cost of purchasing the basket of goods between the time periods. You can use the general equation for percentage changes:
Inflation Rate = ((Final Cost - Initial Cost)/Initial Cost) * 100%
For example, if the cost of the basket of goods increased from $100 to $106.50, the percentage change would be ((106.50 - 100)/100) * 100% = 6.5%. Therefore, the inflation rate for this period is 6.5%.