If you had invested $100 in 1972 in the 500 stocks of the s&p500 index, how much would you have had in 2018?

General
1

if you had invested $100 in 1972 in the 500 stocks of the s&p500 index, how much would you have had in 2018?

2

If you had invested $100 in 1972 in the 500 stocks of the S&P 500 index, how much would you have had in 2018?

Answer:
Investing $100 in 1972 in the 500 stocks of the S&P 500 index would have yielded significant returns by 2018. The average annual return of the S&P 500 index from 1972 to 2018 was approximately 10%. Calculating the compound interest on this investment over 46 years (2018 - 1972), the amount would have grown substantially.

Using the compound interest formula, where A = P(1 + r)^n and:

  • A = the future value of the investment
  • P = the principal investment amount (initial $100)
  • r = the annual interest rate (10% or 0.10)
  • n = the number of years the money is invested (46 years)

Plugging in these values, the calculation would be:
A = 100(1 + 0.10)^{46}

Calculating this, the future value of the $100 investment in the S&P 500 index by 2018 would have been approximately $17,077.24. This illustrates the power of long-term investing in index funds like the S&P 500 for wealth accumulation over time.