Answer:
1.6%
Explanation:
A rate of return is the total gain or loss on investment. It is usually expressed in percentage form
Rate of return on the CD is the total return derived from investing in the Certificate of deposit
Rate of return = (interest earned / total amount invested ) x 100
(8/500) x 100 = 1.6%
If we are asked to calculate the real rate of return, the inflation rate would be subtracted from the interest earned
Real rate of return = [tex]\frac{8-2}{500}[/tex] × 100 = 1.2%
