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20 August, 04:33

If a person has money invested at 9 percent and the rate of inflation is 5 percent, how much return are they actually making on their investment?

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Answers (2)
  1. 20 August, 05:10
    0
    1. An index determined by measuring the price of standard goods brought by urban consumers.

    2. Producers raise prices to meet increased cost.

    3. Demand-pull theory.

    4. It rises

    5. 4 percent.
  2. 20 August, 06:32
    0
    4%

    Explanation:

    It is given that a person has money invested at 9 percent and the rate of inflation is 5 percent.

    We need to find the actual interest rate.

    Real interest rate = Rate of interest - Rate of inflation

    Substitute the given values in the above formula to find the actual interest rate.

    Real interest rate = 9% - 5%

    Real interest rate = 4%

    Therefore, the real interest rate on their investment is 4%.
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