Answer
$ r\approx 2.532\%$
Work Step by Step
Inflation: The amount A that ${{\$}} P$ can purchase after n years,
with annual inflation rate r (decimal) is $A=P\cdot(1-r)^{n}$
---
Given $A=950, n=2,P=1000$ find $r$
$A=P\cdot(1-r)^{n} \qquad.../\div P$
$\displaystyle \frac{A}{P}=(1-r)^{n}\qquad.../(...)^{1/n}$
$(\displaystyle \frac{A}{P})^{1/n}=1-r$
$r=1-(\displaystyle \frac{A}{P})^{1/n}=1-(\frac{950}{1000})^{1/2}\approx 0.02532$
$ r\approx 2.532\%$