Pretend the US inflation rate had been 4.7% per year and the Argentinian inflation rate had been 30% per month.

Question

(a) What is the yearly equivalent of Argentina's 30% monthly inflation rate?
(b) What is the monthly equivalent of the US 4.7% yearly inflation rate?

Answer 1

(a) [(1 + .30)^12] - 1

(b) [(1 + .047)^(1 /12)] - 1