Final answer:
The rate of inflation between the two years, when the Consumer Price Index (CPI) rose from 170 to 180, is approximately 5.88%.
Step-by-step explanation:
If the Consumer Price Index (CPI) was 170 in one year and 180 in the next year, then the rate of inflation can be calculated using the percentage change formula. The CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. To find the rate of inflation, you would take the difference in the CPI values from one year to the next, divided by the CPI in the first year, and then multiply by 100 to convert to a percentage.
The formula for calculating the rate of inflation is ((CPI in Year 2 - CPI in Year 1) / CPI in Year 1) × 100%. Plugging in the values gives us the calculation (180 - 170) / 170 = 0.0588235 × 100% = 5.88235%, which is typically rounded to 5.88%. The result represents the increase in the cost of living for the typical urban consumer from one year to the next.
In this example, the cost of living has risen by approximately 5.88%.