- Carefully review the formulas to calculate inflation (see page below) and answer the following questions: 1. Complete the table below: Value of basket CPI index Annual CPI Annual of goods 2000=100 inflation rate index inflation rate 2010=100 2000 314,726 2001 315,789 2002 325,263 2003 341,526 2004 375,679 2005 368,312 2006 359,329 2007 378,374 2008 395,022 2009 430,298 2010 407,865 2011 592,873 2012 651,567 2013 755,818 2014 814,016 2015 859,600 2016 790,074Formulas for Inflation Inflation rate Average inflation rate D = X2 - X1 * 100 X1 Tavg = [((1+Tic)1) -1] * 100 Where: It = Inflation Where: X2 = last value Itc = Cumulative inflation in the period analyzed X1 = previous value n = number of periods Note: The inflation rate is always expressed in percentages, but for calculation purposes it MUST be divided by one hundred ( / 100). Value of basket Annual CPI index Annual To calculate CPI at different base inflation rate inflation year, use the 'rule of three' rate 2013=100 2013 124,711 100 124,711 - -100 2014 128,624 3.14 103.14 3.14 128,624- ? 2015 130,416 1.39 104.57 1.39 Multiply across the diagonal of known Average and divide by the remaining one. Inflation 2.26% 2.26% 128624 * 100 / 124711 = 103.1377 T =. X2 - X1 * 100 X1 It = 128624 - 124711 124711 -* 100 = 3.14% Tavg = [((1+Tic)1/0) -1] * 100 The = 130416 - 124711 124711 * 100 = 4.57% Tava = [((1+.0457)1/2) -1] * 100 = 2.26%