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Commit ca78b55

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author
Mallikarjun
committed
Added a new Investment Rules snippet to calculate Real Inflation adjested return
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‎INVESTMENT_RULES/README.md

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### How the Rule of 72 Works
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For example, the Rule of 72 states that 1ドル invested at an annual fixed interest rate of 10% would take 7.2 years ((72 ÷ 10) = 7.2) to grow to 2ドル.
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For more details refer https://www.investopedia.com/ask/answers/what-is-the-rule-72/
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For more details refer https://www.investopedia.com/ask/answers/what-is-the-rule-72/
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## 2. Real Rate of Return adjusted to Inflation
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You know that investments have to do more than keep pace with inflation for you to build wealth. As Golden says,
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"A dollar today is not worth a dollar in the future." But how do you determine what your investment return is after inflation?
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This equation helps you compute your real return, or your return adjusted for inflation.
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For example, if an investment returns 8 percent, and inflation is 3 percent, this is how you’d set up the problem:
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[ ( 1.08 ÷ 1.03 ) - 1 ] x 100 = 4.85 percent real return
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"You’re losing to inflation every year," says Charles Sachs, a wealth manager at Kaufman Rossin Wealth in Miami.
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"Long term, inflation runs about 3 percent. So your money buys half as much in 20 years."
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Learn more here--> https://finance.yahoo.com/news/6-investment-formulas-financial-success-172744221.html
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Inflation_Adjsted_Return_Summary = """
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Learn More about this investment rule in README.md located in INVESTMENT_RULES folder**
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"""
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print(Inflation_Adjsted_Return_Summary)
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# Get the Avg Investment Rate of Return and Avg Inflation Rate
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invest_rate_return = float(input("What is expected average Rate of Return (don't use % sign): "))/100
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avg_inflration_rate = float(input("What is your avg inflation rate?: "))/100
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def inflation_adjusted_return(invest_rate_return, avg_inflration_rate):
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# Simple formula is : ((1 + Investment return percentage) / (1 + Inflation rate percentage) - 1) x 100
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inflration_adjusted_return_val = (((1 +invest_rate_return )/(1 +avg_inflration_rate)) - 1) * 100
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return inflration_adjusted_return_val
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real_return = round(inflation_adjusted_return(invest_rate_return, avg_inflration_rate),2)
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print(f"Your Actual Rate of Return adjusted to the inflation is {real_return}%. Not {invest_rate_return*100}% ")

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