Any banker types out there?

[Floogeldy]

If someone had purchased $55,000 worth of certifactes of deposit 10 years ago, and the interest was put in a separate account, how much money would be in the account today? I realize there are variables. Even a ball park figure would be nice.

Thanks,

Floog

[Squatch]

1. Was the interest in the separate account earning interest?

[Squatch]

2. Also, what's the rate on the CD?

[mdhunter]

3. Here's an estimate

$25,000

A 4% CD, which I think was in the ball park of 5 year contracts 10 years ago, would return $2,200 a year. If that were kept in with the CD principle, naturally, each subsequent year the return would be incrementally higher. If it's pulled out then your CD will return at the same rate for the term. So, you figure $22,000 total over the 10 years. Assuming it's been placed in an interest bearing account, say a cheap money market checking resource account - this is a common arrangement - which will return a roughly 2%, that'll put the total in the neighborhood of $25,000 when all is said and done.

Though, the real value is significantly less than this due to inflation. And, of course, if the rate on the CD was appreciably different than 4%, this post is practically meaningless.

[Floogeldy]

4. Muchas Gracias!

That's exactly what I needed. :)