Question

A typical family living on Sandy Island consumes only apple juice, bananas, and material for clothes (cloth). Prices in the base year are R4 per litre of apple juice, R6 a kilo for bananas, and R5 per meter for cloth. In the base year, a typical family spends R80 on apple juice, R90 on bananas, and R50 on cloth. In the current year, apple juice costs R3 per litre, bananas cost R10 per kilo, and cloth costs R7 per meter.

Calculate the Consumer Price Index on Sandy Island in the current year and the inflation rate between the base year and the current year.

Answer 1