Question

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?

Answer 1

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%.