if the consumer price index is 105 and your one and 110 in year two what is the inflation from year one to year two?

Question

A) .05%
B) 4.8%
C) -4.8
D) 4.5%

Answer 1

D) 4.5%

To calculate the inflation rate, you can use the following formula:

Inflation rate = ((CPI in year 2 - CPI in year 1) / CPI in year 1) x 100

Using the given numbers, we get:

Inflation rate = ((110 - 105) / 105) x 100

Inflation rate = (5 / 105) x 100

Inflation rate = 0.0476 or 4.76%

Rounding to one decimal place gives us an answer of 4.5%, which is closest to choice D.