I don't have a formula for this question:
Purchasing Power= 1280.08 (Nov.1/07)
Purchasing Power= 1000.00 (Nov.1/97)
What is the annual rate of inflation?
I think it can be solved 1280.08/1000 -1 but Im not sure??
To calculate the annual rate of inflation, you need to find the percentage increase in purchasing power over a certain period of time. In this case, you want to calculate the annual rate of inflation between November 1, 1997, and November 1, 2007.
The formula you mentioned, (1280.08/1000) - 1, is almost correct. However, this formula gives you the overall percentage increase in purchasing power, not the annual rate of inflation.
To find the annual rate of inflation, you need to use the formula:
Annual Rate of Inflation = [(Final Value/Initial Value) - 1] * 100
Let's calculate the annual rate of inflation using this formula:
1. Calculate the percentage increase in purchasing power over the given period:
(1280.08/1000) = 1.28008
2. Subtract 1 from the result:
1.28008 - 1 = 0.28008
3. Multiply the result by 100 to convert it to a percentage:
0.28008 * 100 ≈ 28.01
Therefore, the annual rate of inflation between November 1, 1997, and November 1, 2007, is approximately 28.01%.