Gas was sold at $2.45 per gallon. The price rose to $2.85 per gallon. What is the inflation rate for the gas?
Inflation Rate = $\square$\%
Round to the nearest tenth.
Answer (2)
Define initial price as P 1 = 2.45 and final price as P 2 = 2.85 .
Calculate the inflation rate using the formula: Inflation Rate = P 1 P 2 − P 1 × 100 .
Substitute the given values into the formula: Inflation Rate = 2.45 2.85 − 2.45 × 100 = 2.45 0.40 × 100 = 16.32653... .
Round the result to the nearest tenth: 16.32653... ≈ 16.3 , so the inflation rate is 16.3% .
Explanation
Understanding the Problem We are given the initial price of gas as $2.45 per gallon and the final price as $2.85 per gallon. We need to find the inflation rate for the gas, expressed as a percentage and rounded to the nearest tenth.
Inflation Rate Formula The formula for calculating the inflation rate is:
Inflation Rate = P 1 P 2 − P 1 × 100
where P 1 is the initial price and P 2 is the final price.
Substituting the Values Substitute the given values into the formula:
Inflation Rate = 2.45 2.85 − 2.45 × 100
Calculating the Difference Calculate the difference in prices:
2.85 − 2.45 = 0.40
Dividing by Initial Price Divide the difference by the initial price:
2.45 0.40 = 0.1632653...
Converting to Percentage Multiply by 100 to express as a percentage:
0.1632653... × 100 = 16.32653...
Rounding to Nearest Tenth Round the result to the nearest tenth:
16.32653... ≈ 16.3
Final Answer Therefore, the inflation rate for the gas is 16.3% .
Examples
Understanding inflation rates is crucial in personal finance. For instance, if you're budgeting for monthly expenses like gas, knowing the inflation rate helps you anticipate price increases and adjust your budget accordingly. If the price of gas increases, it directly impacts transportation costs, affecting everything from commuting to work to planning road trips. By tracking and understanding inflation, you can make informed decisions about your spending and saving habits.
The inflation rate for gas, calculated from an initial price of $2.45 to a final price of $2.85 per gallon, is approximately 16.3% . This is found using the formula for the inflation rate, then rounding the final percentage to the nearest tenth. Thus, the inflation rate is 16.3% .
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