Question

Reijo has invested €8,000 in an investment fund with an average return of 6% per year. Reijo sells the fund shares after 6 years, and a 30% tax is normally paid on the capital gain. How many percent is the real return on Reijo's investment when the consumer price index has risen from 104.1 to 116.6 at the same time?

174

likes
868 views

Answer to a math question Reijo has invested €8,000 in an investment fund with an average return of 6% per year. Reijo sells the fund shares after 6 years, and a 30% tax is normally paid on the capital gain. How many percent is the real return on Reijo's investment when the consumer price index has risen from 104.1 to 116.6 at the same time?

Expert avatar
Hester
4.8
117 Answers
To calculate the real return on Reijo's investment, we need to adjust the nominal return with inflation using the Consumer Price Index (CPI).

1. Calculate the nominal return after 6 years:
Future value (FV) of investment = €8,000 * (1 + 0.06)^6
FV = €8,000 * (1.06)^6
FV = €8,000 * 1.418519
FV = €11,348.15

2. Calculate the capital gain:
Capital gain = FV - Initial investment
Capital gain = €11,348.15 - €8,000
Capital gain = €3,348.15

3. Calculate the tax on capital gain:
Tax on capital gain = 30% * Capital gain
Tax = 0.30 * €3,348.15
Tax = €1,004.45

4. Calculate the net capital gain:
Net capital gain = Capital gain - Tax
Net capital gain = €3,348.15 - €1,004.45
Net capital gain = €2,343.70

5. Calculate the real return after adjusting for inflation:
Real return = (Net capital gain / Initial investment) * (CPI at end / CPI at start)
Real return = (€2,343.70 / €8,000) * (116.6 / 104.1)
Real return = 0.2929625 * 1.119663
Real return = 0.3279667

Therefore, the real return on Reijo's investment with inflation adjustment is 32.80%.

\boxed{32.80\%}

Frequently asked questions (FAQs)
What is the measure of an angle in radians if its degree measure is 90?
+
Find the resultant displacement when a vector of magnitude 5 units is added to a vector of magnitude 3 units at an angle of 45 degrees with regards to the x-axis.
+
What is the value of f(x) when c is equal to 5?
+
New questions in Mathematics
By differentiating the function f(x)=(x³−6x)⁷ we will obtain
The ratio of tomatoes to red apples is 2:5. If there are 20 tomaoes in the garden, how many red apples are there?
In a store there are packets of chocolate, strawberry, tutti-frutti, lemon, grape and banana sweets. If a person needs to choose 4 flavors of candy from those available, how many ways can they make that choice?
5.- From the probabilities: 𝐏(𝐁) = 𝟑𝟎% 𝐏(𝐀 ∩ 𝐁) = 𝟐𝟎% 𝐏(𝐀 ̅) = 𝟕𝟎% You are asked to calculate: 𝐏(𝐀 ∪ 𝐁)
calculate the area in square units of A rectangle with length 6cm and breadth 5cm
During a fishing trip Alex notices that the height h of the tide (in metres) is given by h=1−(1/2)*cos(πt/6) where t is measued in hours from the start of the trip. (a) Enter the exact value of h at the start of the trip in the box below.
The ninth term of a given geometric progression, with reason q , is 1792, and its fourth term is 56. Thus, calculate the fourth term of another geometric progression, whose ratio is q +1 and whose first term is equal to the first term of the first P.G. described.
Solve the following equation for x in exact form and then find the value to the nearest hundredths (make sure to show your work): 5e3x – 3 = 25
A contractor gives a bank note for $10250 at a rate of 1% for one month. How much interest is charged for 4 months?
16.What payment (deposit) made at the end of each month will accumulate to $10473 in 13 years at 7.9% compounded monthly? Enter to the nearest cent (two decimals). Do not use $ signs or commas in the answer.
A company dedicated to the manufacture of shirts sells the units at a price of $40, the cost of each shirt is $24, a commission is paid for the sale of a unit of shirt of $2 and its fixed costs are $3500 Determine the marginal contribution
Oi👋🏻 Toque em "Criar Nova Tarefa" para enviar seu problema de matemática. Um dos nossos especialistas começará a trabalhar nisso imediatamente!
22. Let [AB] be a chord in a circle C, and k a circle which is internally tangent to the circle C at a point P and to the chord [AB] at a point Q. Show that the line P Q passes through the midpoint of the arc AB opposite to the arc APB.
Identify the slope and y intercept y=11+2/3x
Sodium 38.15 38.78 38.5 38.65 38.79 38.89 38.57 38.59 38.59 38.8 38.63 38.43 38.56 38.46 38.79 38.42 38.74 39.12 38.5 38.42 38.57 38.37 38.71 38.71 38.4 38.56 38.39 38.34 39.04 38.8 A supplier of bottled mineral water claims that his supply of water has an average sodium content of 36.6 mg/L. The boxplot below is of the sodium contents levels taken from a random sample of 30 bottles. With this data investigate the claim using SPSS to apply the appropriate test. Download the data and transfer it into SPSS. Check that your data transfer has been successful by obtaining the Std. Error of the mean for your data which should appear in SPSS output as 0.03900.. If you do not have this exact value, then you may have not transferred your data from the Excel file to SPSS correctly. Do not continue with the test until your value agrees as otherwise you may not have correct answers. Unless otherwise directed you should report all numeric values to the accuracy displayed in the SPSS output that is supplied when your data has been transferred correctly. In the following questions, all statistical tests should be carried out at the 0.05 significance level. Sample mean and median Complete the following concerning the mean and median of the data. mean =  mg/L 95% CI:  to  mg/L Based upon the 95% confidence interval, is it plausible that the average sodium content is 36.9 mg/L?      median:  mg/L The median value is      36.9 mg/L. Skewness Complete the following concerning the skewness of the data. Skewness statistic =        Std. Error =  The absolute value of the skewness statistic     less than 2 x Std. Error Therefore the data can be considered to come from a population that is      . Normality test Complete the following summary concerning the formal testing of the normality of the data. H0: The data come from a population that     normal H1: The data come from a population that     normal Application of the Shapiro-Wilk test indicated that the normality assumption     reasonable for sodium content (S-W(  )=  , p=   ). Main test Using the guidelines you have been taught that consider sample size, skewness and normality, choose and report the appropriate main test from the following ( Appropriate ONE ) You have selected that you wish to report the one-sample t-test. H0: The mean sodium content     equal to 36.9 mg/L H1: The mean sodium content     equal to 36.9 mg/L Application of the one-sample t-test indicated that the mean is      36.9 mg/L (t(  ) =  , p =   ). You have selected that you wish to report the Wilcoxon signed rank test. H0: The median sodium content     equal to 36.9 mg/L H1: The median sodium content     equal to 36.9 mg/L Application of the Wilcoxon signed rank test indicated that the median is      36.9 mg/L (z =  , N =  , p =   ).
Find the symmetric point to a point P = (2,-7,10) with respect to a plane containing a point Po = (3, 2, 2) and perpendicular to a vector u = [1, -3, 2].
Beren spent 60% of the money in her piggy bank, and Ceren spent 7% of the money in her piggy bank to buy a joint gift for Deren, totaling 90 TL. In the end, it was observed that the remaining amounts in Ceren and Beren's piggy banks were equal. Therefore, what was the total amount of money that Beren and Ceren had initially? A) 120 B) 130 C) 150 D) 160 E) 180
Hola👋🏻 Toca en "Crear Nueva Tarea" para enviar tu problema de matemáticas. ¡Uno de nuestros expertos comenzará a trabajar en ello de inmediato!
Sarah is lining a square tray with 1 inch square tiles. the side length of the tray is 9 inches. How many tiles does Sarah need?
Find the number of liters of water needed to reduce 9 liters of lotion. shave containing 50% alcohol to a lotion containing 30% alcohol.