Question

"Based on historical figures, how much would you LOSE by putting your money in a savings account compared to investing in the stock market? "

Answer 1

Answer:

4.5% annual interest.

Explanation:

Assuming that we are talking about a specific Savings Account then we can say that the average APY on a savings account such as HSBC savings is 2.5% per year. On the other hand, the stock market has an average APY of 7% annually. Therefore, in order to find how much you would lose by putting your money in a savings account, we would need to subtract the savings account APY from the stock market APY.

7% - 2.5% = 4.5%

We can see that what you would lose in opportunity cost is 4.5% annual interest.