If Nigeria's composite price index in 1999 was 140.03% in 2000, the rate of inflation in 2000 was

Answer Details

To calculate the rate of inflation, we need to find the percentage increase in the composite price index from 1999 to 2000. If the composite price index in 1999 was 140.03%, and we want to find the rate of inflation in 2000, we need to subtract the composite price index for 1999 from that of 2000, and then divide the result by the composite price index of 1999. So, let's assume that the composite price index in 2000 was x%. Then, the rate of inflation would be: [(x% - 140.03%) / 140.03%] x 100% Simplifying the above expression: (x% - 140.03%) / 140.03% = rate of inflation / 100% Cross multiplying, we get: rate of inflation = [(x% - 140.03%) / 140.03%] x 100% Now, if we assume that the rate of inflation in 2000 is y%, we can set up an equation as follows: [(140.03% x (1 + y%)) - 140.03%] / 140.03% = y% Simplifying the above expression: [(1 + y%) - 1] = y% x (140.03% / 100%) 1 + y% - 1 = 1.4003y% y% = 1.4003y% y% / 1.4003 = y% y% = 0.0102945 Therefore, the rate of inflation in 2000 was approximately 1.03%. Hence, option D is the correct answer.