In the last seven years—including the 2015 commodity market crash and the 2020 Coronavirus pandemic—investors have experienced unprecedented volatility in the stock market. This has led to many people asking: what is the future value of $1,000 invested for 15 years at a rate of 5%?
To answer this question, it is important to understand the concept of compound interest and the power of compounding assets over time. Compounding is when interest accrued on an investment is added to the principal, creating a larger base from which further interest accrues. When compounding is combined with the power of time, even small investment can grow significantly over the long-term.
For example, if you invested $1,000 today and earned a 5% rate of return over the next 15 years, the value of your investment will be roughly $2,662. This is assuming you reinvest the dividends and interest earned on your investment each year.