Math  /  Word Problems

QuestionCalculate the inflation rate from year 1 (36.00)toyear2(36.00) to year 2 (36.75) and round to one decimal place.

Studdy Solution
Assumptions1. The cost of the fixed basket of goods and services in year1 is 36.00.Thecostofthesamebasketinyearis36.00. The cost of the same basket in year is 36.753. We need to find the rate of inflation from year1 to yearFirst, we need to find the increase in cost from year1 to year. We can do this by subtracting the cost in year1 from the cost in year.
Increaseincost=CostinyearCostinyear1Increase\, in\, cost = Cost\, in\, year\, - Cost\, in\, year\,13Now, plug in the given values for the cost in year1 and year to calculate the increase in cost.
Increaseincost=$36.75$36.00Increase\, in\, cost = \$36.75 - \$36.004Calculate the increase in cost.
Increaseincost=$36.75$36.00=$0.75Increase\, in\, cost = \$36.75 - \$36.00 = \$0.755Now that we have the increase in cost, we can find the rate of inflation. The rate of inflation is the increase in cost divided by the original cost (cost in year1), multiplied by100 to convert it to a percentage.
Rateofinflation=(IncreaseincostCostinyear1)×100%Rate\, of\, inflation = \left(\frac{Increase\, in\, cost}{Cost\, in\, year\,1}\right) \times100\%6Plug in the values for the increase in cost and the cost in year1 to calculate the rate of inflation.
Rateofinflation=($0.75$36.00)×100%Rate\, of\, inflation = \left(\frac{\$0.75}{\$36.00}\right) \times100\%7Calculate the rate of inflation.
Rateofinflation=($0.75$36.00)×100%=.08%Rate\, of\, inflation = \left(\frac{\$0.75}{\$36.00}\right) \times100\% =.08\%The rate of inflation from year1 to year is.08%.

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