3 ms·
r = F/I = (1+f)/(1+i) according to what I have defined. So inflation of 3% and return of 10% means r = 1.03 / 1.1 = 0.9363, not 0.3.
by nileshtrivedi 14y ago
r = F/I = (1+f)/(1+i) according to what I have defined. So inflation of 3% and return of 10% means r = 1.03 / 1.1 = 0.9363, not 0.3.
- gibybo 14y agoSorry, I missed the F = (1+f)/R = (1+r) line. Pretty sure the rest of my argument holds though. Your formula merely approximates the correct answer for low values of i and f.