The average rate of returns plays a critical role in personal finance calculations. For making assumptions, the historical average return is often used as an initial basis. If the assumed average return is over-estimated, it could ruin the whole long-term investment planning.
For instance, if an asset’s average future return is over-estimated at 12% per annum instead of the actual return of 10% per annum, one needs to invest only Rs 10,109 every month to achieve a goal of accumulating R ..