If the Price Index Is P1 in Year 1 and P2

Multiple Choice

If the price index is P1 in year 1 and P2 in year 3,the average inflation rate per year over this period is calculated as

A) (P2 - P1) × (100/2) .
B) [(P2 - P1) /P1] × 100.
C) [(P2 - P1) /P1] × [100/2].
D) [(P1 - P2) /P2] × 100.
E) [(P1 - P2) /P2] × [100/2].