Your End Result Depends On The Rate Of Return – (We Explain)

The rate of return has a significant impact on your final return. It is because the final amount is highly sensitive to changes in the interest rate. While there wouldn’t be much difference in a 10% or an 8% return in a year, the final amounts in both cases could be hugely different after a significant period.

For instance, the following figure shows that the difference in final return on an amount of $100 invested at 10% and 8% over 30 years is huge.

This difference would be even higher on a bigger amount and longer period of investment.

Hence higher the rate of return, the higher would be the final amount.