The following tables contain the Producer Price Index (PPI) for constuction mach

Question

The following tables contain the Producer Price Index (PPI) for constuction machinery. Calculate the average inflation rate for construction machinery from 1995 through 2005.

year          PPI

1995          157.2

1996          161.6

1997          164.4

1998          167.8

1999          170.8

2000          172.7

2001          173.5

2002          175.9

2003          178.3

2004          183.9

2005          192.6

I have the formula for calculating the average inflation rate  [ f = (F / P) ^ (1 / N) - 1 ] but I don't understand how to use the information given with this formula?

Thank you!

Explanation / Answer

average inflation rate = (192.6-157.2)/(152.6*10) =2.32%

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