The problem asks for the inflation rate during the period 2009–2010, given the Consumer Price Index (CPI) for 2010 is 105, and expenditures in 2009 and 2010 are provided.

Step-by-step solution:

1. Formula for Inflation Rate: $\text{Inflation Rate} (\%) = \frac{\text{CPI in 2010} - \text{CPI in 2009}}{\text{CPI in 2009}} \times 100$

2. Calculate the CPI for 2009:

   • CPI is calculated as: $\text{CPI} = \frac{\text{Expenditure for a year}}{\text{Expenditure in the base year}} \times 100$
   • For 2009 (base year): $\text{CPI in 2009} = 100$ (The CPI of the base year is always 100).

3. Calculate the Inflation Rate: Substitute into the formula: $\text{Inflation Rate} (\%) = \frac{105 - 100}{100} \times 100 = 5.00\%$

Final Answer:

The inflation rate during 2009–2010 is 5.00%.

Do you want additional explanations or clarifications?

Questions for Further Learning:

1. What does CPI represent, and why is it essential for measuring inflation?
2. How would the calculation change if the base year CPI were not 100?
3. What are some limitations of using CPI as a measure of inflation?
4. How can inflation impact purchasing power over time?
5. What are other indices used to measure inflation, and how do they differ from CPI?

Tip:

When calculating inflation rates, always ensure the base year's CPI is correctly understood—it's typically normalized to 100.