Inflation is a general increase in prices and may be measured by the Consumer Price Index (CPI). Use Appendix A to answer the questions.

1. In Year 1 the CPI was 100; 20 years later, it was 229. What was the annual rate of inflation? Round your answer to the nearest whole number. _______________ %

2. Nancy and Pam both currently earn $90,000. If the annual rate of inflation is 3 percent, how much must each earn after twelve years to maintain their purchasing power? Round your answer to the nearest dollar. ______________$

3. Your parents bought a home for $40,000 in Year 1 and sold it in Year 21 for $220,000. What was the annual rate of price increase over the 20 years? Round your answer to the nearest whole number. ______________ %