Question

If the consumer price index was 166.6 in one year and 172.2 in the next year, then the rate of inflation from one year to the next was:

Answer 1

The formula to find the inflation or deflation rate is (P2-P1)/P1 x 100%, therefore you get 172.2-166.6 divided by 166.6, giving you the inflation rate of 3.36 rounded to two decimal places.