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The Consumer Price Index (CPI) indicates the relative change in price over time for a fixed basket of goods and services. In general, if the
The Consumer Price Index (CPI) indicates the relative change in price over time for a fixed basket of goods and services. In general, if the rate of inflation averages r Fr over n years, then the CPl after n years is CPI=CPI0(1+100r)n, where CPl0 is the CPl index at the beginning of the n-year period. (a) The CPI was 153.7 for 1995 and 172.7 for 2004 . Assuming that annual inflation remained constant for this time period, determine the average annual inflation rate. (b) Using the inslation rate from part (a), in what yoar will the CPI reach 325
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