Forecast how a CD ladder balance may change when interest is taxed and some or all of the net interest is reinvested. The projection works one year at a time, so reinvested earnings contribute to later interest. It also separates growth left in the ladder from cash paid out, making it easier to compare accumulation and income strategies without assuming that quoted CD rates will remain available.
Annual net interest = balance × APY × (1 − tax rate)
Next balance = balance + net interest × reinvestment share
Use the main result as a scenario estimate and compare it with alternative assumptions. Small changes in tax, return, inflation, or payment terms can compound into meaningful differences.
This is an educational estimate, not tax, investment, insurance, or legal advice. Actual taxes and contract benefits depend on jurisdiction and plan terms.
Starting with $100,000 at 4.5% APY for five years, reinvesting all interest and applying a 24% tax rate, the projected balance is about $118,310.
Yes. The entered APY is held constant for the full projection.
Only the entered share of after-tax interest is added to next year’s balance; the rest is shown as paid out.
No. It models the ladder as one blended balance for annual forecasting.
Not with a nonnegative APY because principal withdrawals are not modeled.
No. The calculation assumes CDs remain invested according to the ladder plan.
| Assumption | Effect |
|---|---|
| Constant APY | Same rate each forecast year |
| Annual tax | Reduces interest before reinvestment |
| No principal withdrawals | Starting principal remains invested |