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Consider the following data about the economy in two different years:

average price of a house CPI
1987 $121,000 120
2007 $217,000 210
the CPI in 2017 was 260. answer the following questions and round all answers to two decimal places. what was the inflation rate between 1987 and 2007?

User Salsa
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Final answer:

The inflation rate between 1987 and 2007 was calculated using the CPI data for those years, with the resulting inflation rate being 75%.

Step-by-step explanation:

The question asks about calculating the inflation rate between 1987 and 2007 using the Consumer Price Index (CPI) data provided. The inflation rate can be calculated using the formula: ((CPI in later year - CPI in earlier year) / CPI in earlier year) * 100%. Here, we have CPI of 120 in 1987 and CPI of 210 in 2007.

To calculate the inflation rate between 1987 and 2007:

Subtract the initial year CPI from the final year CPI. (210 - 120 = 90)

Divide the result by the initial year CPI. (90 / 120 = 0.75)

Multiply by 100 to get the percentage. (0.75 * 100 = 75%)

So, the inflation rate between 1987 and 2007 was 75%.

User Colin Dunklau
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