More Consumer Price Index help?

Question

" In Brazil, the reference base period for the CPI is December 1993. In September 2000, prices had risen by 1,565.93 percent since the base period. The inflation rate in Brazil during the year ending September 2001 was 6.46 percent, and during the year ending September 2002, the inflation rate was 7.93 percent.
a.What is the CPI in Brazil for December 1993?
b.Calculate Brazil's CPI in September 2000.
c.Calculate Brazil's CPI in September 2001.
d.Calculate Brazil's CPI in September 2002.
e.Is the price level in Brazil rising or falling? Why
f.Did Brazil's inflation rate increase or decrease in 2001 and in 2002?
g.Was the inflation rate in Brazil between 2000 and 2002 greater or less than the inflation rate in the United States?
"

How am I supposed to find anything out without having anything more than the percentages for the given years?

Answer 1

No problem. it's the same as the previous problem. an index number is nothing more than the percentage increase from the base year plus 100.
(a) if the base year is 1993, then CPI for 1993 is 100. Base year is ALWAYS 100.
(b)This is the same formulas I showed you in the previous problem, but backwards.
1565.93=(X-100)/100*100
1,565.93=X-100
X=1,665.93

(c)Your CPI for 2000 is 1,665.93, and there was a 6.46% increase in inflation for 2001, so:
1,665.93*(1+0.0646)=1,773.55

(d) same thing again. 2001 CPI is 1,773.55 and inflation for 2002 was 7.93%, so

1,773.55*(1+.0793)=1,914.19

Price level is rising. If it was falling, the CPI would be lower each year.

(g) Don't have the actual inflation for the US, but 90% sure it was less than 6.46% and 7.93%

Answer 2

This isn't as hard as it initially sounds.
a. 100. The base year is always 100.
b. Take 1,565.93% and multiply it by the 100. Thus, the CPI is 156,593.
c. It increased by 6.46% from the previous year, so multiply the 2000 CPI by 1.0646 to get the new CPI. This is 166,708.9
d. It increased by 7.93% over the previous year, so multiply the 166,708.9 by 1.0793 to get the new CPI. This is 179,928.9.
e. The price level is obviously rising. Inflation is by definition rising prices.
f. It increased. It is moving up faster than in 2001 according to the CPI.
g. Greater than the inflation rate in the United States. Go to http://www.freelunch.com for statistics on the US inflation rate. It is usually between 2-3% annually.

Hope this helps.