Cvil War Songs-2018 Spring lelp Grad 1/19/2018 11:59 PM 0,97 O 1/16/2018 11:29 P

Question

Cvil War Songs-2018 Spring lelp Grad 1/19/2018 11:59 PM 0,97 O 1/16/2018 11:29 PM Prit Calculator Question 7 of 20 Map a Sapling Learning On Orca Island people consume fish sandwiches and snow cones. Use the table below to calculate the rate from 2013 to 2014 using the CPl. Use 2013 as the base year and round your answer to two decimal places rice in Quantity in Price in Quantity in 2014 $8.00 $4.50 2013 S7.00 2013 800 2014 750 Fish Snow cones $4.00 1500 100 Number The inflation rate equals Tools

Explanation / Answer

There are two years --- 2013 and 2014.

Since the base year is 2013, its CPI would be 100.

Bundle price should be calculated with a multiplication between price and quantity.

Bundle price in 2013

Commodities

Price $

Quantities

Price × Quantity

F.S

7

800

$5,600

S.C

4

1500

$6,000

$11,600

Bundle price in 2014

Commodities

Price $

Quantities

Price × Quantity

F.S

8

800

$6,400

S.C

4.50

1500

$6,750

$13,150

Note: Since price changes between the years, quantities would be remaining the same for the calculation of CPI.

CPI of 2013 = 100

CPI of 2014 = (CPI of 2013 / Bundle price in 2013) × Bundle price in 2014

                        = (100 / 11,600) × 13,150

                        = 113.36

Inflation = Difference in CPI

               = 113.36 – 100

               = 13.36 %

Commodities

Price $

Quantities

Price × Quantity

F.S

7

800

$5,600

S.C

4

1500

$6,000

$11,600

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