In the Republic of Priceland, in 2009 the consumer price index was 168.00. In 2010 the index increased to 180.60. Calculate the rate of inflation in Priceland between 2009 and 2010.

7.5

Explanation:

Data provided

CPI in the year 2010 = 180.60

CPI in the year 2009 = 168.00

The computation of rate of inflation is shown below:

Inflation rate = ((CPI in the year 2010 - CPI in the year 2009) : CPI in the year 2009) * 100

= (180.60 - 168.00) : 168.00 * 100

= 12.6 : 168.00 * 100

= 0.075 * 100

= 7.5

Therefore for computing the inflation rate we simply applied the above formula.