The price index was 170 in the first year,180 in the second year,and 195 in the third year.The inflation rate was about
A)5.6 percent between the first and second years,and 7.7 percent between the second and third years.
B)5.9 percent between the first and second years,and 8.3 percent between the second and third years.
C)10 percent between the first and second years,and 15 percent between the second and third years.
D)80 percent between the first and second years,and 95 percent between the second and third years.

Question

Quizplus · Accepted Answer

To calculate the inflation rate between two years using the price index, we can use the following formula:

Inflation rate = ((Price index in year 2 - Price index in year 1) / Price index in year 1) x 100%

Therefore, the inflation rate between the first and second years is:

((180 - 170) / 170) x 100% = 5.88%

And the inflation rate between the second and third years is:

((195 - 180) / 180) x 100% = 8.33%

So, the closest answer is B: 5.9 percent between the first and second years, and 8.3 percent between the second and third years.

The Price Index Was 170 in the First Year,180 in the Second