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If the inflation rate is 5% and the current price of a commodity is ₹200, what w

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Question: If the inflation rate is 5% and the current price of a commodity is ₹200, what will be its price after one year?

Options:

  1. ₹210
  2. ₹205
  3. ₹220
  4. ₹215

Correct Answer: ₹210

Solution: 

Price after one year = 200 + (5/100 * 200) = ₹210.

If the inflation rate is 5% and the current price of a commodity is ₹200, what w

Practice Questions

Q1
If the inflation rate is 5% and the current price of a commodity is ₹200, what will be its price after one year?
  1. ₹210
  2. ₹205
  3. ₹220
  4. ₹215

Questions & Step-by-Step Solutions

If the inflation rate is 5% and the current price of a commodity is ₹200, what will be its price after one year?
  • Step 1: Identify the current price of the commodity, which is ₹200.
  • Step 2: Identify the inflation rate, which is 5%.
  • Step 3: Calculate the amount of increase in price due to inflation by multiplying the current price by the inflation rate: (5/100) * 200.
  • Step 4: Calculate the increase: (5/100) * 200 = 10.
  • Step 5: Add the increase to the current price to find the new price: 200 + 10.
  • Step 6: The new price after one year is ₹210.
  • Inflation Calculation – Understanding how to calculate the future price of a commodity based on a given inflation rate.
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