Final answer:
To calculate the rate of inflation or in this case, the deflation rate for the school supplies, we use the percentage change formula. The calculation shows a deflation rate of 4.57% from 2015 to 2016.
Step-by-step explanation:
To calculate the rate of inflation for the basket of school supplies that cost $385.44 in 2015 and $367.81 in 2016, we will use the formula for percentage change, which is:
(Price in Later Year - Price in Earlier Year) / Price in Earlier Year x 100%
However, because we have a decrease in price, this will not be an inflation rate but rather a deflation rate. The steps for the calculation are as follows:
(367.81 - 385.44) / 385.44 x 100%
= -17.63 / 385.44 x 100%
= -4.57%
As a result, we have a deflation rate of 4.57% from 2015 to 2016 when rounded to the nearest hundredth of a percent.