0
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?
JenniferPrescott29
A real "growth" of -0.0019%, approx.
Wiki User
∙ 8y ago
Add your answer:
Earn +20 pts
How do you calculate nominal interest rate?
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.
When invested at an annual interest rate of 8 percent an account earned 336 of simple interest in one year How much money was originally invested in the account?
Let P be the amount of invested money. Then, .08P = 336 P = 336/.08 = 4,200
What do savings account usually offer a high or low interest rate?
As low an interest as the borrower can get away with and still attract investment.
What amount will an account have after 9 years if 125 DOLLARS is invested at 8 percent interest compunded continuously?
249.88 dollars
What is the monthly return of 1000 invested in saving account with 5.8 monthly interest?
If you mean 5.8% annual interest rate compounded monthly, then (1000*.058)/12 = 4.83
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%?
How do you calculate nominal interest rate?
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.
Why does interest on checking accounts increase with increasing inflation?
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.
Is the interest earn t in a bank account classed as an investment?
Interest earned in a bank account is not an investment. It is considered an income. The money that you have in the bank account that earned the interest for you is considered the investment
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?
20, assuming annual compound interest, 24 if simple interest.
When invested at an annual interest rate of 8 percent an account earned 336 of simple interest in one year How much money was originally invested in the account?
Let P be the amount of invested money. Then, .08P = 336 P = 336/.08 = 4,200
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?
A savings account earns interest.
What makes a savings than a checking account account a better investment?
A savings account earns interest.
Why should the interest rate on your savings account be greater than the rate of inflation?
We cannot say that the interest rate on our savings account should be greater than the rate of inflation, but we can say that the interest earned on our overall savings or investments should be greater than the inflation rate. That is because: Let's say you invested Rs. 100 in a bank that gives you 3% interest every year, which means your 100 would have grown to be 103 by the end of the year, but if the country's inflation rate if say 8%, something that was 100 rupees last year would be costing 108 rupees now which means your money has effectively lost its value. That is why we must invest in instruments that give us returns that are alteast greater than the inflation rate.
Does inflation rob you of your savings?
Yes and no. If your "savings" are not in a savings account, then technically yes. This is because your savings will slowly lose its purchasing power as inflation happens (emphasis on slowly, you will only "lose" 1-5% annually unless inflation spikes in a bad way). If your savings is in a savings account and is accruing interest, then no. This is because the interest will make up for the inflation.
What are the advantages of saving money in a bank?
Money saved in a bank is generally insured up to $100,000. Money saved under a mattress is not.AnswerSimply put, the person will have money earning a specified amount of interest, that can be used when needed. Whereas funds invested in CD's Money Market accounts and so on are generally subject to penalties if an early withdrawal is neccessary. Answer:Although the interest that you earn will be lost due to the inflation rate, your loss will not be as great as keeping it under your mattress. Here's what I have:There is the advantage of security. The money is safe from theft and in certain circumstances the money will be insured by the federal government if any problems befall the bank.Due to inflation, if your money is not invested or placed in an account that is earning more than the current rate of inflation, you are actually losing money. Therefore it is essential that you save your money in an account that offers an interest rate that is above the current rate of inflation.
