Question

Select the correct answer.
The table represents the Consumer Price Index for a basket of goods and services for three consecutive years. Calculate the inflation rate for 2014.

Year Consumer Price Index
2012 (base year)

100

2013

125

2014

180



A.
50 percent
B.
55 percent
C.
44 percent
D.
40 percent

Answer 1

To calculate the inflation rate for 2014, you can use the following formula:

\[
\text{Inflation Rate} = \frac{\text{CPI in Current Year} - \text{CPI in Previous Year}}{\text{CPI in Previous Year}} \times 100
\]

In this case, the CPI for 2014 is 180, and the CPI for 2013 is 125.

Now, plug in the values:

\[
\text{Inflation Rate} = \frac{180 - 125}{125} \times 100
\]

Calculating the difference:

\[
180 - 125 = 55
\]

Now, substitute it back into the formula:

\[
\text{Inflation Rate} = \frac{55}{125} \times 100
\]

Now calculate:

\[
\frac{55}{125} = 0.44
\]
\[
0.44 \times 100 = 44
\]

Therefore, the inflation rate for 2014 is **44 percent**.

The correct answer is **C. 44 percent**.