Im thinking about getting a CD Certif. of Deposit and putting up $5,000 for five years?

Question

the interest will be 3.94 and APY 4.01 can anyone give me a guess of how much the 5,000 will grow in 5 years? (Im 20 and need to save money) if there are other options please let me know thanks!

Answer 1

If you make roughly 4 percent per year, then after the first year you'll have $5200, after the second year you'll have $5408, etc. (You just take 4 percent of the total you have each year. It's not that complicated.)

Answer 2

You will have $6,110. I think you would be better off investing in a broad, market tracking stock fund. They tend to grow at about 8% per year over the long term. With how much the market has dropped lately, now is a great time to buy.

I hope this helps... good luck!

Answer 3

Try a CD for 1 year, and if situation is good then another 1 yr CD.  The economy may change and you dont want to tie up $$ that long.

Answer 4

Make sure that you really can tie up the money for 5 years before you do so.  If there is any doubt, go for a shorter term CD - you can always roll it over into a new CD and interest rates may be higher by then anyway.