Realistic Projections

Over the past 40 years, Canada's average annual inflation rate has varied from a high of 12.4 per cent in 1981. The annual inflation rate was 2.7 per cent in 2000. Monetary policy in Canada is guided by an inflation-control target and the current target range is 1 to 3 per cent. So the 3% used on this calculator would take the Bank of Canada's high end, which is good. As for the interest rate, according to Cannex.com the most you can get on a savings account (w/o Jan 5, 2008) is about 4.1% while the interest paid on one-five year GICs wasn't much better, topping out at about 5.25%, well below the 8% on the calculator. That being said, if you have an investment that averages 8%, by all means use this figure. Otherwise, change the return the calculator uses to something that reflects the return you'll actually earn so the projection is realistic.