If you invest $1000 when a child is born, how much will you have?

Question

when the child is 18 years old....just average earnings like in a CD? How about with other investment options?

Answer 1

Um, 5% would be $50 a year the first year, not $5. The next year you'd make $52.50 in interest (since you added $50 the year before), and so on.

Here's a link to a calculator you can use yourself to figure out your values.

Answer 2

This depends on the terms of the investment. Typically a CD of that type has a 5% yield, but I've never bought a CD with a term of 18 years!

Assuming an average annual rate of return of 5% and in 18 years you'll have $2406.62. At an 8% rate of return, you'll have $3996.02.

If you invest $1000 annually at 5%, in 18 years, you'll have $29539 but at 8% the yield is $40446.

Answer 3

Use the "Rule of 72" to determine your answer. The "rule" simply states that if you divide the interest rate that you're getting by 72, you'll know how many years it takes to double your money. Example: If you're earning 3% on your $1000, divide 3 into 72 and you get 24. Thus, your $1000 takes 24 years to become $2000. At 6% your money doubles every 12 years and at 12% your money doubles every 6 years.

Answer 4

Gergi's answer is wrong, it looks like he/she is off a decimal place or something.

You would have $2406 at 5% interest.

Answer 5

depends on how much interest you are accruing for those 18 years.

Answer 6

depends on the rate. at 5% you will get $50 a year. add it up.

Answer 7

$20,000.00 (Asuming you reinvest the money)

If you invest $1000.00 more each year you will have enough to send him/her to Harvard. ($125,000.00)