If I invest 25k in the bank each year, how much will it be worth in 15 years?

Question

If I invest 25k in the bank EVERY YEAR,

how much will there be in the bank after 15 years?

(so 15 times of investment + how much does the bank add?)

will inflation make this all pointless?

Answer 1

i r bored so i'll email ya i guess l8r

n e ways, diversify, diversify, ect.

u can put some in the bank and that's great, but yeah inflation will eat it (go with like ing direct savings cause thats almost 4-5% which iz bttr than ur local bank)

then use a ira, n' roth ira, insurance, and mutal funds, ect.

Answer 2

depends on interest rate,

Answer 3

Obviously you'll have the principal of 15 X $25,000 = $375,000.

Plus, you'll have the accumulated interest.

How much will that be? Nobody can tell you, because interest rates will go up and down over the next 15 years.

Plus, you will owe annual taxes on the interest income. The exact amount will depend on what your tax rate is. This will fluctuate with your income. It will also fluctuate as Congress changes income taxes rates. Right now, it appears likely that Congress will raise taxes. But maybe in 15 years they'll eventually lower tax rates.

If you put this money into an ordinary savings account, inflation will indeed reduce your principal's spending power.

How much? That depends on the rate of inflation, which nobody can predict.

My own advice is to save money even during inflationary times, because it's better to have reduced spending power in the future than to have NO spending power in the future, because you wasted your money. It's always better to save and invest money than to blow it.

Also, you can keep up with inflation by putting the money into Treasury Inflation Protection Securities, or TIPS -- though this has tax consequences.

So, you see, there's no way to really answer your question without a crystal ball.

If you are trying to save for a specific target goal, and you want to make sure you reach it, you can try taking out a deferred fixed annuity. You and the annuity company will have to reach an agreement as to how much you put in -- and how much they will make sure you have at the end of the 15 years.

They don't have a crystal ball either, but they can invest efficiently because of their size. Plus, they won't committ themselves to a final target they don't think they can achieve.

Make no mistake, however -- you'll pay for that certainty. They will also factor in a profit margin for themselves.

best, Rick Stooker

Answer 4

Inflation can make such an exercise pointless, if you do not put your money into investments that historically have performed at least as well as inflation itself. The best investment for that is the stock market.

Let's say you get a 5% annual after-tax return from your bank and let's say inflation is 3% every year. In that case, your savings will be worth almost $540,000. (The investment returns would be about $165,000 in 15 years.) Inflation itself would increase the same annual payments to almost $465,000, which means that you would still come out ahead by about $75,000 after taxes and inflation are taken into account. Of course, this is just an example and things could turn out quite differently. But such is life, isn't it? It is full of uncertainties. In that respect money matters are no different than a career and love.

Answer 5

Inflation average is more then that.  It's about 4-7%.  By the time you pay taxes, you’ll lose money.  Get away from your broker if they are giving you information like this.  Invest in good growth stock mutual funds that average about 12 percent.  Put it in growth, growth and income, balanced and international.

Long Term investing is over 5 years.  Look at funds with a good track record of 10 years or more.

Answer 6

To keep the value of it being 25k equivilant each year then you would need to increase the 25k by the rate of inflation each year. If you did not then the purchasing power of 25k in say 15 years will be much smaller than it is for this year if you do not adjust for inflation.

Inflation is around normally 2.5 - 3% per annum.

So next year you would invest 25,750

year after 26,522 and so on......

Answer 7

current int rates are less than the rate of inflation - for long term investment (10-15 yrs) stocks/mutual funds are your best bet - 10% annual historical return