what would happen to the buying power of your investment after one year if your rate of return was 8% and the rate of inflation was 3%?
Business · High School · Sun Jan 24 2021
Answered on
If the rate of return is 8% and the inflation rate is 3%, then it means that the value of your money from the investment is 6% more than the inflation rate. This concept of investing in higher interest rates is practiced by many investors in order to beat inflation and retain or even increase the value of their wealth. Thus, this concept must also be applied to aspiring investors who want to grow their wealth. One must always take note to invest in their money on an investment that gives a higher rate of return than the inflation rate.