If the price index is P1 in year 1 and P2 in year 3,the average inflation rate per year over this period is calculated as
A)(P2 - P1)× (100/2).
B)[(P2 - P1)/P1] × 100.
C)[(P2 - P1)/P1] × [100/2].
D)[(P1 - P2)/P2] × 100.
E)[(P1 - P2)/P2] × [100/2].

Question

Quizplus · Accepted Answer

The average annual inflation rate over a period is calculated by finding the percentage change in the price index and then dividing by the number of years. Option C correctly represents this calculation.

If the Price Index Is P1 in Year 1 and P2