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Why is knowledge of changing interest rates a significant aspect of personal financial planning?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter1: Understanding The Financial Planning Process

Section: Chapter Questions

Problem 4LO: Examine the economic environments influence on personal financial planning.

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.Why is knowledge of changing interest rates a significant aspect of personal financial planning?

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Personal financial planning is very important for the purpose of increasing the rate of return. If you are taking loan also, the knowledge of interest rates is important so that you be able to reduce the overall cost of finance. Interest rates are the basis of financial market as it regulates through the change in interest over the period of time. With this, the advantage of arbitrage profit can be taken and we can have higher rate of return with the better application.

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