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
4.5%
4.5%
4.8%
4.8%
-4.8%
-4.8%
0.05%
The rate of inflation from Year One to Year Two can be calculated by taking the difference in the consumer price index (CPI) from Year Two to Year One and dividing it by the CPI of Year One.
(110 - 105) / 105 = 5 / 105 ≈ 0.0476
Converting the decimal to a percentage, the rate of inflation is approximately 4.76%.