Macroeconomics

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cost in 2005 is 15.00
cost on 2009 is 20.50
Consumer price index (20.50/15.00)x100=137
I understand that part but my professor said to measure inflation he gave the answer 37% divide 37/4=9.25%
4 number of years
9.25% annual rate inflation
how did he get 37 I am confused

  • Macroeconomics -

    20.50/15.00 = 1.37

    so, an item increased by 37% in 4 years.

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