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?(
The rate of inflation can be calculated using the following formula:
Inflation rate = ((CPI Year Two - CPI Year One) / CPI Year One) x 100
Substituting the values given:
Inflation rate = ((110 - 105) / 105) x 100
Inflation rate = (5 / 105) x 100
Inflation rate = 0.0476 x 100
Inflation rate = 4.76%
Therefore, the rate of inflation from Year One to Year Two is 4.76%.