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10 November, 00:24

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

2012 (base year) 100

2013. 125

2014. 180

A. 50 percent

B. 55 percent

C. 44 percent

D. 40 percent

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  1. 10 November, 03:42
    0
    Assuming the prices given are at the end of the year, you calculate the inflation as:

    inflation percent = change in prices in a year / price at the end of the previos year

    inflation percent in 2014 = [price at the end of year 2014 - price at the end of year 2013] * 100 / (price at the end of year 2013)

    inflation percent in 2014 = [180 - 125] * 100 / 125 = 40%

    Answer: 44% (option C.)
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