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A real "growth" of -0.0019%, approx.

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โˆ™ 2015-12-21 21:23:16
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Q: In 1960 the inflation rate was about 5.1. If you invested in a savings account with an annual interest rate of 4.9 what was the real growth rate of this investment?
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How much interest is earned on the account?

A $5000 investment at an annual simple interest rate of 4.4% earned as much interest after one year as another investment in an account that earned 5.5% annual simple interest. How much was invested at 5.5%?


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Nominal interest, is the amount of interest on a loan or investment that does not take into account inflation; it's the amount of interest listed on the loan or bond.


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Example : you have Rs. 100 to spend you have invested in bank . the bank give you 5% interest so that now you will earn 105 Rs. on your investment. current inflation is 2% that means you are paying 2% and your bank gives you 5% so (5-2) 3% is your profit you are generating extra Rs. 3 on your investment in bank Now the inflation rate increases to 6 % and your bank still gives you 5% on the checking account while investment made in mutual fund gives you return of 8% than Bank (5%-6%)= Loss of 1% Mutual Funds (8%-6%)= Profit of 2% So to overcome effect of inflation and to stay in the competition with other investment and to regulate banking operation the bank will increase interest on checking account to keep investors investing in bank.


How does a money market account work?

A money market account works by having money invested like a savings account but getting the interest rates that are in the current money market. It usually requires a higher investment than a regular savings account.


Ryan was 8 when his parents invested 4000 in a certificate of deposit that pays 6 percent If Ryan leaves the account alone until the investment doubles how old will he be Assume that the interest?

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How is ROI or return on investment calculated?

Return on investment is calculated by subtracting investment capital from the return, taking into account inflation, taxation and the time frame involved.


What makes a saving account a better investment than checking account?

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