Question

The CPI-U (U.S. city average, all items) has the following annual averages:

Year	Index
2013	237.3
2014	239.6
2015	242.8
2016	243.8
2017	248.4

Part a

For each year from 2014 to 2017, determine the annual inflation rate in percent to two decimal places.

Year	Inflation Rate
2014	enter percentages %
2015	enter percentages %
2016	enter percentages %
2017	enter percentages %

Part b

Since inflation, like interest, is compounded from period (e.g. year to year), estimate the overall annuel inflation rate per year from 2013 to 2017.

enter percentages %

Answer 1

Answer:

Inflation = [( CPI in year 2 - CPI in year 1) /CPI in year 1]*100

2014 = [(239.6-237.3)/237.3]*100

=0.97%

2015 = [(242.8-239.6)/239.6]*100

=1.33%

2016 = [(243.8-242.8)/242.8]*100

=0.41%

2017 = (248.4-243.8)/243.8]*100

=1.88%

Year	Inflation rate
2014	0.97%
2015	1.33%
2016	0.41%
2017	1.88%

B]

inflation from 2013 to 2017

= [ ( 2017 CPI - 2013 CPI ) / 2013's CPI. ] *100.

[(248.4 -237.3) / 237.3]*100 = 4.66%

inflation from 2013 to 2017 = 4.66%