if I invest 250,000 dollars in an account that pays 5.5%, how much is that in interest?

Answer 1

If the interest rate is 5.5%, it depends on the compounding. If the APY is 5.5% and assuming there are no fees, then you will earn 250K x .055 = $13,750 per year or about $1145.83 per month.

Answer 2

You need to know how often they pay interest - the more often, the faster it will compound. For example, if it's annual (they pay once a year) that would be 5.5% times 250k, which is $13,750. But if they paid it monthlty it would be more because they would be adding to the principal earlier and more often, so the interest they paid you would also be drawing interest faster, so it would grow faster. My Excel is on the blink or I'd figure it out for you. The long way to do it would be as follows:

$250,000 times one-twelfth of 5.5%, added in each month, so on day "31" (it's actually 30.5 ) you'd have 250k plus 5.5/12% times 250k, or $13,750 dividded by 12, or $1,145.833333 ... rounded to $1,245.33 added to the 250k, so next time they figure it they'd have to pay you 5.5%/12 on the new total of $251,145.33, so they'd owe you $1,151.09 next month, etc.

Of course, if they compound it daily, it will earn money faster, but each time they compound it they'd be adding just a little. So for a daily compounding they'd have to pay about .055/365.25 times 250k (365 1/4 days in a year) or at the end of day one they'd pay $37.65. You can see that the amount they'd have to pay you as time goes by (if you don't touch the interest) will increase each time. In fact, when they asked Einstein what the greatest invention of man was, he said "compound interest".

By the way (not that you asked) this is why earning interest is best left in IRA's because it is only taxed when you take it out, unlike non-IRA interest which is taxed annually.

Answer 3

If you invest $250,000 and place it in an account that pays 5.5% it is $13,750 dollars.

Answer 4

$13,000 sounds like a pretty good return but be sure to consider the whole financial aspect of the endeavor.

Inflation and taxes-the killers

think this through!!!!

so on the whole:
your gross interest return is $13,750
avg taxes@25% of profit= (-$3437)
gives you net return of $10,313

inflation of 4% per one year on $260,313 is (-$10,412)
you net $10,313 but lose $10,412 in purchase power from inflation.

*****so after one year at 5.5% interest on your money you actually LOSE -$99.00 *****

very important for all of you 'savers' out there to understand what is going on in the real world.

advice: take the $250k and buy gold bullion until rates rise ABOVE inflation. you may not get 'rich' with gold, but you'll stay ahead of inflation

the banks ARE NOT your friend.

later.

Answer 5

$13,750 is the annual amount but if paid quarterly and left to accumulate, it would be higher and even higher if it paid monthly.

Answer 6

math?!
if u invest ur money for 10 years then u will get the same amount..10years!! just get over it!

Answer 7

The interest is US$13,750.00, since the rate is for one year.

Answer 8

you have to know the amount of time it is in there to draw

Answer 9

$ 13,750 per annum.

Answer 10

250,000x.055=
13,750 a year