Sunday, August 07, 2011

Interest Rates and Maturity Yields

An interesting discussion with my brother yesterday led me to writing this post. And since I had a gag order at home for not discussing this anymore in the open, I had no other option! Anyway, the topic of discussion was about an investment scheme that offered to double the amount invested in 5.5 years. With interest rates being high, not bad I thought. But, the confusion (and the subsequent  argument) arose because the scheme was offering returns of 18%+!!