Question

Suppose that the consumer price index of a country was 184.42 at Year X and 340.14 at the end of Year Y. What was the country’s inflation rate during Year Y

Answer 1

To calculate the inflation rate for Year Y, we can use the following formula:

\[
\text{Inflation Rate} = \frac{\text{CPI at Year Y} - \text{CPI at Year X}}{\text{CPI at Year X}} \times 100
\]

Given:

- CPI at Year X = 184.42
- CPI at Year Y = 340.14

We can substitute the values into the formula:

\[
\text{Inflation Rate} = \frac{340.14 - 184.42}{184.42} \times 100
\]

Calculating the difference:

\[
340.14 - 184.42 = 155.72
\]

Now plugging this back into the formula:

\[
\text{Inflation Rate} = \frac{155.72}{184.42} \times 100
\]

Calculating the ratio:

\[
\frac{155.72}{184.42} \approx 0.845
\]

Now, multiplying by 100 to convert to a percentage:

\[
0.845 \times 100 \approx 84.5
\]

Thus, the inflation rate during Year Y is approximately **84.5%**.