Question

What would happen to the buying power of your investment after one year if your rate of return was 3% and the rate of inflation was 3%?

Answer 1

Hello,

If the rate of return on an investment was 3% and the inflation rate was also 3%, then your buying power would remain the same. The two equal values would cancel each other out.

Imagine being given $300 and than having to pay $300, you are back where you started.

Good luck,
MrEQ