1. **Stating the problem:** We are given Consumer Price Index (CPI) data from 2017 to 2022 and need to compute the Inflation Rate and Purchasing Power Parity (PPP) for each year. 2. **Formulas and rules:** - Inflation Rate for year $t$ is calculated as: $$\text{Inflation Rate}_t = \frac{\text{CPI}_t - \text{CPI}_{t-1}}{\text{CPI}_{t-1}} \times 100\%$$ - PPP is inversely related to CPI, assuming a base year (2017) with PPP = 1. We calculate PPP for year $t$ as: $$\text{PPP}_t = \frac{\text{CPI}_{2017}}{\text{CPI}_t}$$ 3. **Calculations:** - For 2017, Inflation Rate and PPP are not applicable or set as base (Inflation Rate = 0%, PPP = 1). - Calculate Inflation Rate and PPP for each subsequent year: **2018:** $$\text{Inflation Rate}_{2018} = \frac{117.95 - 115.20}{115.20} \times 100 = \frac{2.75}{115.20} \times 100 \approx 2.39\%$$ $$\text{PPP}_{2018} = \frac{115.20}{117.95} \approx 0.977$$ **2019:** $$\text{Inflation Rate}_{2019} = \frac{123.30 - 117.95}{117.95} \times 100 = \frac{5.35}{117.95} \times 100 \approx 4.54\%$$ $$\text{PPP}_{2019} = \frac{115.20}{123.30} \approx 0.934$$ **2020:** $$\text{Inflation Rate}_{2020} = \frac{126.07 - 123.30}{123.30} \times 100 = \frac{2.77}{123.30} \times 100 \approx 2.25\%$$ $$\text{PPP}_{2020} = \frac{115.20}{126.07} \approx 0.914$$ **2021:** $$\text{Inflation Rate}_{2021} = \frac{130.01 - 126.07}{126.07} \times 100 = \frac{3.94}{126.07} \times 100 \approx 3.13\%$$ $$\text{PPP}_{2021} = \frac{115.20}{130.01} \approx 0.886$$ **2022:** $$\text{Inflation Rate}_{2022} = \frac{131.60 - 130.01}{130.01} \times 100 = \frac{1.59}{130.01} \times 100 \approx 1.22\%$$ $$\text{PPP}_{2022} = \frac{115.20}{131.60} \approx 0.875$$ 4. **Summary table:** | Year | CPI | Inflation Rate (%) | PPP | |------|-------|--------------------|-------| | 2017 | 115.20| 0 | 1 | | 2018 | 117.95| 2.39 | 0.977 | | 2019 | 123.30| 4.54 | 0.934 | | 2020 | 126.07| 2.25 | 0.914 | | 2021 | 130.01| 3.13 | 0.886 | | 2022 | 131.60| 1.22 | 0.875 | This completes the computation of Inflation Rate and PPP from the given CPI data.