CPI and the Inflation Rate

Use the information in the table to calculate a consumer price index (CPI) and the inflation rate. The base year is 1980. Round answers to two decimal places.

Market Basket

Quantity

A dozen eggs

29

$1.10

1981 prices

$1.80

A loaf of bread

19

$15.00

$19.00

Televisions

2

1980 prices

$180.00

$230.00

a. What is the CPI for 1980?_______

b. What is the CPI for 1981?______

C. Given the information above what is the inflation rate for 1981?_____%