boonedocks All American 5550 Posts user info edit post |
I'm working on a lesson for my economics classes
What's a typical interest rate on a monthly compounded long term savings account? 11/20/2005 10:19:20 PM |
tl All American 8430 Posts user info edit post |
Bank of America Wachovia
[Edited on November 20, 2005 at 10:25 PM. Reason : ] 11/20/2005 10:24:13 PM |
HaLo All American 14249 Posts user info edit post |
with a brick and mortar bank, around 1%
online around 3.5% 11/20/2005 10:25:53 PM |
boonedocks All American 5550 Posts user info edit post |
Sorry, I wasn't clear enough.
What I meant to say was total average interest rate you can expect to get on your savings, including stock market stuff.
The point of the lesson is to wow kids into saving.
I asked my friend who has a job and is saving, and he says 8% monthly, which sounds ridiculous
[Edited on November 20, 2005 at 10:30 PM. Reason : .] 11/20/2005 10:30:06 PM |
HaLo All American 14249 Posts user info edit post |
you really need to redefine your question then 11/20/2005 10:30:31 PM |
HaLo All American 14249 Posts user info edit post |
annual yield is generally around 1-1.5% for a savings account in a bank. obviously other investments offer more return with more risk 11/20/2005 10:33:20 PM |
boonedocks All American 5550 Posts user info edit post |
Redefined:
I save $5000 a year and invest it wisely into a diversified portfolio.
What interest rate (monthly or annual) should I expect on the whole portfolio?
[Edited on November 20, 2005 at 10:34 PM. Reason : .] 11/20/2005 10:34:32 PM |
skokiaan All American 26447 Posts user info edit post |
you mean rate of return, faggot 11/20/2005 10:46:34 PM |
boonedocks All American 5550 Posts user info edit post |
sure 11/20/2005 10:48:47 PM |
BSTE02 All American 1493 Posts user info edit post |
The S&P has appreciated 12% over the last 70 years. 11/20/2005 10:56:13 PM |
Grapehead All American 19676 Posts user info edit post |
right now you should be able to get at least 3% with no min balance 11/20/2005 10:56:37 PM |
renegadegirl All American 2061 Posts user info edit post |
I don't know how much you'll wow kids into saving with 3% interest right now that's below the inflation rate.
You would be better off suggesting getting some I-bonds from the United States Treasury
http://www.treasurydirect.gov/
Right now their interest rates are ~6%... They guaruntee to stay at least 1% above the inflation rate at all times. 11/20/2005 10:57:02 PM |
skokiaan All American 26447 Posts user info edit post |
doesnt matter what the s&p does over 70 years -- only about 40 years because thats how long you will have until retirement 11/20/2005 11:01:32 PM |
Clear5 All American 4136 Posts user info edit post |
Quote : | "The S&P has appreciated 12% per year over the last 70 years.
" |
11/20/2005 11:12:02 PM |
HaLo All American 14249 Posts user info edit post |
^ i sure would hope so 11/20/2005 11:13:11 PM |
Patman All American 5873 Posts user info edit post |
Quote : | "You would be better off suggesting getting some I-bonds from the United States Treasury" |
Probably not most of the folks on here. You have to hold them at least 12 months and you lose the last 3 months interest if you renew them before 5 years.11/20/2005 11:31:21 PM |
boonedocks All American 5550 Posts user info edit post |
Meh, I'll set it at 6% yearly.
this is what happens when a history major is made to teach economics. 11/20/2005 11:34:29 PM |
Clear5 All American 4136 Posts user info edit post |
you should set it at 10% because its close enough and really easy to calculate 11/20/2005 11:37:43 PM |
HaLo All American 14249 Posts user info edit post |
you could get CDs with around a 5% interest rate from banks, little risk and decent return (though its not liquid). 6% is probably a pretty good number. 11/20/2005 11:39:00 PM |
BobbyDigital Thots and Prayers 41777 Posts user info edit post |
why the hell is this guy teaching something he clearly does not understand? 11/20/2005 11:56:16 PM |
HaLo All American 14249 Posts user info edit post |
its the NC way 11/21/2005 12:04:15 AM |
boonedocks All American 5550 Posts user info edit post |
It's not like I'm teaching investment classes.
It's a very basic 10th grade civics class-- I just want to give them an example of interest, and wanted to be somewhat accurate.
And it's because NCSU done screwed up when they placed me.
[Edited on November 21, 2005 at 12:10 AM. Reason : .] 11/21/2005 12:09:39 AM |
Excoriator Suspended 10214 Posts user info edit post |
http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&product=33&sort=2
Highest savings account rate is with Emigrant Direct @ 4.00% APY and minimum deposit of $1.00
/thread
[Edited on November 21, 2005 at 12:22 AM. Reason : s] 11/21/2005 12:20:20 AM |
J_Gatsby All American 1336 Posts user info edit post |
motherfucker
they're letting you teach children?
the nation really is fucked
good job, dumbass
i'm glad as an educator you turn to the shitpile that is this website for guidance in shaping the minds of americas youth 11/21/2005 1:30:20 AM |
drhavoc All American 3759 Posts user info edit post |
Quote : | "Meh, I'll set it at 6% yearly.
this is what happens when a history major is made to teach economics." |
At this time, this is probably very close to accurate. While the stock market has averaged ~11% per year, the vast majority of money managers and top notch investors (including Warren Buffett) have come out and said that over the next decade, returns of 6-7% would be more in line.11/21/2005 5:58:13 AM |
Maverick All American 11175 Posts user info edit post |
If you're trying to give them an example of how they will accumulate wealth, let them know this:
You can become a millionaire by the time you retire if you start saving early. For example, if you were to max out your IRA every month and put that money into a mutual fund that gets 12% annual interest, you could easily become a millionaire by retirement if you started saving at age 22 when you get out of college. 11/21/2005 6:37:47 AM |
synapse play so hard 60935 Posts user info edit post |
Quote : | "put that money into a mutual fund that gets 12% annual interest" |
thats a pretty nice mutual fund no?11/21/2005 6:46:24 AM |
tl All American 8430 Posts user info edit post |
I believe they say that for every 5 years earlier you start your investments, you'll double your final wealth at retirement.
eg:
invest $1000 per year into an account getting 10% apy if you start at age 15, by age 60 you'll have about $800,000 if you start at age 20, by age 60 you'll have about $490,000 if you start at age 25, by age 60 you'll have about $300,000
(okay, so it's not exactly double, but it is a lot)
if you start at age 25 and invest 3 times as much per year ($3000 in this case), you'll just barely make more in the end than the first case (age 15) at $840,000
I believe it was Albert Einstein who said, "compounding interest is the 8th wonder of the world" or something. 11/21/2005 9:59:50 AM |
Josh8315 Suspended 26780 Posts user info edit post |
so... to hit the exponential part of the curve where you are getting 10% per year, you need at least 40 years in the bank it seems 11/21/2005 10:18:31 AM |
ncsutiger All American 3443 Posts user info edit post |
Man if only I had $1000 per year when I was 15-20... 11/21/2005 10:19:31 AM |
Josh8315 Suspended 26780 Posts user info edit post |
^thats investing 1k per year he said
if you invest 1k when you are 21, it will only be 66k when you are 65
[Edited on November 21, 2005 at 10:22 AM. Reason : -] 11/21/2005 10:20:06 AM |
ncsutiger All American 3443 Posts user info edit post |
I understood that. Just saying I didn't have that kind of money at that age to even think about investing. 11/21/2005 10:24:31 AM |
Josh8315 Suspended 26780 Posts user info edit post |
the idea is that a parent sets that up 11/21/2005 10:25:26 AM |
ssjamind All American 30098 Posts user info edit post |
dem boys in the hood sell anything for profit 11/21/2005 11:07:14 AM |
ncstateccc All American 2856 Posts user info edit post |
Just teach them the rule of 72......If you want to know how long it will take to double your investment then divide 72 by the interest rate, that will give you how many years it will take. If you put $1,000 in something that has an interest rate of 10% it will take 7.2 years for it to be worth $2000. 72/10= 7.2 11/21/2005 11:16:06 AM |
HUR All American 17732 Posts user info edit post |
i get 3.25% on my MM NC Secu account 11/21/2005 11:31:06 AM |
Patman All American 5873 Posts user info edit post |
For a deposit account, you generally find .3-1%. Money market accounts pay higher, but usually have higher minimum balances. The exceptions are credit unions and online banks.
For long term retirement investments, you generally shoot for 8% in a diverse, fairly low-risk portfolio. 11/21/2005 11:37:29 AM |