Interest rates were at historical highs in the early 1980s. In August of 1981, you could earn 17.5% compounded annually on a five-year term deposit with a Canadian bank. Since then, the interest rate offered on five-year term deposits dropped to a low of 1.1% compounded annually in June of 2013. On a $10,000 deposit for a term of five years, how much more would you have earned at the historical high interest rate than at the more recent low rate?

Question

Quizplus · Accepted Answer

The Answer of Interest rates were at historical highs in the early 1980s. In August of 1981, you could earn 17.5% compounded annually on a five-year term deposit with a Canadian bank. Since then, the interest rate offered on five-year term deposits dropped to a low of 1.1% compounded annually in June of 2013. On a $10,000 deposit for a term of five years, how much more would you have earned at the historical high interest rate than at the more recent low rate?

Interest Rates Were at Historical Highs in the Early 1980s