Question

Can someone please help me by telling the formula to calculate inflation via CPI

Answer 1

CPI at time t = 100
CPI at time t+1 = x
inflation = (CPI at time t+1-CPI at t)/CPI at time t. * 100 = x-100
If x is say 106.
inflation in time period t to t+1 has been 6%.

Simple enough. Harder when you add multiple years, and then you can only take out the average inflation.

Using the formula for compound interest:

A = P(1+r/100)^t
r/100 = (A/P)^1/t - 1

Substitute A = CPI at time y; P is base CPI and t is time period. R is thus average inflation over the time period.