If I left 400.00 in a savings account at 4.0% for 34 years, how much money would I have?

Answer 1

gls merch gave you the correct theoretical answer, ie 1517.73 .

But unfortunately, in real life you will have to pay tax at around 20%pa leaving you 3.2% .
And you will also suffer inflation at about 2.5%, reducing it to 0.7%.
So in the end its purchasing power will be equal to 507.

As you see only fools leave their money in bank deposits for long periods. Money has to be invested to make money.

Answer 2

I need to assume to answer this question that the 4% is credited on a monthly basis, which is the way most savings accounts work. Therefore, you would actually make 4%/12 or .25% a month. You can solve this using an interest equation:

34 years is 408 months
$400*(1.0033)^408=$1,534.02

or excel. I like using excel, it is clearer to me. You have 4 columns:
1: Month
2: Beginning balance
3: Interest
4: Ending balance

Instead of giving you the entire table, I'll show you what the first two rows would look like:

1_____$400_____(400*.0033)=$1.32______ $401.32
2_____$401.32___(401.32*.0033)=$1.324____$402.644

34 years is 408 months. If you drag down this excel table to 408, you get $1,534.02.

Hope this helps.

Answer 3

These other guys are rounding the monthly interest to 0.33%. If you don't round, and calculate the actual return using a financial calculator (like an HP-12C, which I've used for over 20 years), you'll get the real answer, which is $1,554.96:

PV = 400
n = 408 (12 x 34)
i = .3333 (.04/12)
FV = $1,554.96

Answer 4

In 34 years, you would have $1,578.44, but this would only have the purchasing power of about $560.36 if inflation stays at about 3%.

Use the MS Excel investment calculator at the URL below. You can enter in any investment amount and it shows you what that investment will look like over time with inflation.

Good luck!

Answer 5

I think somewhere around $1517.73. That is if there are no fees on the money and that there are no taxes taken out of the earnings and all of the interest is left in place.

Answer 6

why not take that money invest it in your personal financial education and see how much money you can actually get out of your investment

Answer 7

$400 * (1.04)^34 = $1517.73