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

Question

aev [14]

3 years ago

9

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%?

Mathematics

1 answer:

krek1111 [17] · Answer 1 · 2022-06-18T22:27:53+03:00

Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. A rate of return is the annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external effects.
Given:
Rate of return = 3%Rate of inflation =3%
Buying Power = 3% - 3% = 0%
Thus, the buying power will remain same for the year.