If the consumer price index is 105 in Year One and 110 in Year Two, what is the rate of inflation from Year One to Year Two?(1 point) Responses
A. 0.05%
B. 4.8%
C. -4.8%
D. 4.5%
To find the rate of inflation, we can use the formula:
Rate of inflation = (CPI in Year Two - CPI in Year One) / CPI in Year One * 100%
Plugging in the given values:
Rate of inflation = (110 - 105) / 105 * 100%
= 5 / 105 * 100%
= 0.048 * 100%
= 4.8%
Therefore, the rate of inflation from Year One to Year Two is 4.8%.
Answer: B. 4.8%