How can we calculate the inflation rate?

The level of Inflation persisting in the economy is determined by the Wholesale Price Index (WPI). WPI in an Index which measures the overall changes in the price levels in the economy. The formula for finding inflation is as follows.

For instance, suppose WPI in the year 1993-94 is given as 123.9 and in the year 2001-02 is given as 130.4. Thus, Rate of Inflation can be calculated as,