$5,000 Compound Interest Over 40 Years

Questions about this calculator

Is a lump sum of $5,000 better than depositing it monthly over 40 years?

For growth, yes. $5,000 invested at the start reaches $54,787. The same money split into 480 equal monthly deposits reaches only $20,745 at 6 percent because most of it spends less time growing. Monthly deposits suit a budget while a lump sum suits cash you already have.

Is 40 years long enough for $5,000 to double at 6 percent?

$5,000 reaches $10,000 after about 11.6 years. So 40 years is more than enough. A quick check is to divide 72 by the rate, which gives 12 years.

What if the return on $5,000 over 40 years were one point lower than 6 percent?

At 5 percent the balance after 40 years is $36,792 instead of $54,787. One point higher gives $81,557.

What is $54,787 worth after prices rise 2.5 percent a year?

If prices rise at 2.5 percent a year for 40 years the final balance has the buying power of about $20,404 in starting-year money. Enter your own inflation rate in the calculator to test other cases.