Concept explainers
The Consumer Price Index (CPI) is a measure of inflation obtained by comparing current prices with base prices in 1982–84. We can find the inflation rate for a given time period by calculating the percent of change in the CPI over that time period. For example, the CPI in 2005 was 195.3 and in 2009 it was 214.5, so the inflation rate was
Effect of inflation on the cost of textbooks.
a. Calculate the inflation rate from 2000 to 2015.
b. If a textbook cost $147 in 2000, use the inflation rate from part (a) to estimate the cost of the book in 2015.
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