I'm not sure how to answer this question. I did Inflation=%change in CPI =(current CPI - previous CPI) /previous CPI =(1. 28-0.996)/0.996 = 28.51%. Then divided that by 4 for the 4 years and got 7.13%. I don't know if this was the right way to solve this. Any help would be great.

26) If the CPI was 99.6% in January 2001 and 128% in January 2005, what was the approximate annual inflation over the intervening period? A) 28.4% B) 7.1% C) 6.4% D) 5.0% E) 0.4% Answer: C