CA Foundation · Quantitative Aptitude · Index Numbers
An economist comparing inflation across three years observed that the Consumer Price Index (base year 2018 = 100) was 108 in 2021, 115 in 2022, and 127 in 2023. What is the inflation rate for 2023 using the index (the year-on-year price increase)?
Year-on-year inflation for 2023 is [(127 - 115) / 115] × 100 = 10.43%. This represents the price increase in 2023 compared to 2022, distinct from the cumulative index value of 127.
- A27%
- B10.43%Correct
- C19%
- D6.45%
Explanation
Year-on-year inflation for 2023 is calculated as [(CPI 2023 - CPI 2022) / CPI 2022] × 100 = [(127 - 115) / 115] × 100 = (12/115) × 100 = 10.43%. Option 0 (27%) is cumulative inflation from base year 2018. Option 2 (19%) is incorrect division. Option 3 uses wrong base.
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