If the consumer price index is 125 at the end of 2011 and is 150 at the end of 2012,then the inflation rate for 2012 is
A) 15%.
B) 20%.
C) 25%.
D) 125%.
E) 150%.

Question

Quizplus · Accepted Answer

The inflation rate for 2012 can be calculated using the formula:

Inflation rate = (CPI at end of year 2 - CPI at end of year 1) / CPI at end of year 1 x 100%

Substituting the given values, we get:

Inflation rate = (150 - 125) / 125 x 100%
Inflation rate = 25 / 125 x 100%
Inflation rate = 20%

Therefore, the inflation rate for 2012 is 20%, which corresponds to option B.

If the Consumer Price Index Is 125 at the End