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Determine about the Expected inflation
Note that it is changes in prices during 2008 which matter for the high real interest rate (the time period when your deposit is earning interest). This means that you can never know how high the real rate is actually going to be when you start to save on 1st January 2008, even if you know the nominal interest rate exactly. Crucial to the determination of the real rate is the expected inflation- the inflation expected in the year you save.
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Q. Interest rates and inflation? Assume you have 1 million on 1st January 2008. A basket of services and goods similar to the CPI basket costs 100,000. You can then purchase ex
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