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%
4.8%
-4.8%
0.05%
To calculate the rate of inflation, we need to find the percentage increase between the two years.
The formula to calculate the rate of inflation is:
((CPI Year Two - CPI Year One) / CPI Year One) * 100%
Using the given CPI values:
((110 - 105) / 105) * 100% = (5 / 105) * 100% = 0.0476 * 100% ≈ 4.76%
Therefore, the rate of inflation from Year One to Year Two is approximately 4.76%, which can be rounded to 4.8%.
The correct answer is 4.8%.