What is the inflation rate from 2018 to 2019 based on the given Consumer Price Index (CPI) data?
To calculate the inflation rate from 2018 to 2019, we can use the following formula:
Inflation Rate = ((CPI in 2019 - CPI in 2018) / CPI in 2018) * 100
Given that the CPI in 2018 was 251 and the CPI in 2019 was 257, we can substitute these values into the formula:
Inflation Rate = ((257 - 251) / 251) * 100
Inflation Rate = (6 / 251) * 100
Inflation Rate ≈ 2.39%
Rounding this to the nearest tenth of a percent, the inflation rate from 2018 to 2019 is approximately 2.4%.
Therefore, the correct answer is:
D) 2.4%
Calculating Inflation Rate:
Consumer Price Index (CPI) is a measure that examines the average change in prices paid by consumers for goods and services over time. It is a key indicator of inflation as it reflects how much consumers are paying for items across various categories.
To calculate the inflation rate between two years, we use the formula mentioned earlier:
Inflation Rate = ((CPI in 2019 - CPI in 2018) / CPI in 2018) * 100
In this case, the CPI in 2018 was 251 and the CPI in 2019 was 257. Substituting these values into the formula, we get:
Inflation Rate = ((257 - 251) / 251) * 100
Inflation Rate = (6 / 251) * 100
Inflation Rate ≈ 2.39%
When rounded to the nearest tenth of a percent, the inflation rate from 2018 to 2019 is approximately 2.4%. This indicates that prices increased by 2.4% during this period.
Understanding inflation rates is crucial for individuals, businesses, and policymakers as it impacts purchasing power, interest rates, and overall economic stability. It is essential to monitor inflation trends to make informed financial decisions and navigate the market effectively.