22.1 Tracking inflation  (Page 10/16)

The inflation rate is calculated as the percentage change in the price index from year to year. For example, the inflation rate between 2001 and 2002 is (84.61 – 69.71) / 69.71 = 0.2137 = 21.37%. The inflation rates for all the years are shown in the last row of the following table, which includes the two previous answers. Items Qty (2001) Price (2001) Amount Spent (2002) Price (2002) Amount Spent (2003) Price (2003) Amount Spent (2004) Price (2004) Amount Spent Apples 10 $0.50 $5.00 $0.75 $7.50 $0.85 $8.50 $0.88 $8.80 Bananas 12 $0.20 $2.40 $0.25 $3.00 $0.25 $3.00 $0.29 $3.48 Grapes 2 $0.65 $1.30 $0.70 $1.40 $0.90 $1.80 $0.95 $1.90 Raspberries 1 $2.00 $2.00 $1.90 $1.90 $2.05 $2.05 $2.13 $2.13 Total $10.70 $13.80 $15.35 $16.31 Price Index 69.71 84.61 100.00 106.3 Inflation Rate 21.37% 18.19% 6.3%