How would you compute the annual rate of inflation if the CPI was 200 in January of one year and 210 exactly 12 months later?
A. Divide the annual increase in the CPI, 10, by the beginning value of the CPI, 200, to get .05 or 5%.
B. Multiply the annual change in the CPI, 10, by the initial CPI, 200, and then divide by the new CPI, 210, to get 9.5%.
C. Subtract the smaller CPI from the larger and then divide by two to get 5%.
D. Both A and C computations are correct.