1. **Select Time Periods**: Choose the beginning and ending time periods for which you want to calculate the inflation rate. For example, you might compare the CPI from January of one year to January of the next year.
2. **Find CPI Values**: Obtain the CPI values for the chosen time periods. You can typically find this data from government sources such as the Bureau of Labor Statistics (BLS) in the United States.
3. **Subtract Beginning CPI from Ending CPI**: Subtract the CPI value for the beginning time period from the CPI value for the ending time period. This gives you the change in the price index over the selected time period.
4. **Calculate Percentage Change**: Divide the change in CPI by the CPI value for the beginning time period. Multiply the result by 100 to convert it to a percentage. This gives you the inflation rate for the selected time period.
\[
\text{Inflation Rate} = \left( \frac{\text{Ending CPI} - \text{Beginning CPI}}{\text{Beginning CPI}} \right) \times 100
\]
5. **Interpretation**: The resulting percentage is the inflation rate for the chosen time period. A positive inflation rate indicates that prices have increased over time, while a negative inflation rate indicates that prices have decreased (deflation).
6. **Repeat for Different Time Periods**: You can repeat this process to calculate the inflation rate for different time periods or compare the inflation rate across multiple years.
For example, if the CPI increased from 200 to 210 over one year, the inflation rate would be:
\[
\text{Inflation Rate} = \left( \frac{210 - 200}{200} \right) \times 100 = \left( \frac{10}{200} \right) \times 100 = 5\%
\]
So, the inflation rate for that year would be 5%.