Thiago W.

asked • 07/20/21

Monthly inflation rate (basic percentage)

The Central Bank's Bulletin, on 07/12/2021, projected inflation for 2021 at 6.11%. If inflation in the months of January to June 2021 were:


January: 0.25%

February: 0.86%

March: 0.93%

April: 0.31%

May: 0.83%

June: 0.53%


What should be the average monthly inflation for the next 6 months, for the Bulletin projection to be correct?

A) 0,367% per month

B) 0,373% per month

C) 0,405% per month

D) 0,421% per month


I did solve this question, but couldn't figure it out as my answer is not exact. I would really really appreciate if you could explain to me how to solve the question, and include the answer

1 Expert Answer

By:

William W. answered • 07/20/21

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Thiago W.

Thank you! What I did was sum 3.71 + all the alternatives times 6. C was the closest (6.14), and D was the second closest (6.236). But the problem is that when I look up a country's yearly inflation rate and sum each month, the number is different. Take Brazil's 2018 inflation rate for example, when I sum everything up, it totals 3.69%, but it says the yearly inflation rate for that year was 3.66% https://www.inflation.eu/en/inflation-rates/brazil/historic-inflation/cpi-inflation-brazil-2018.aspx By logic, the right answer is C (6.14), as it's the closest, but at the same time, I'm not sure, because they don't mention the word "approximately" in the prompt. What do you think, Mr. William W?
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07/20/21

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