Though the Interest Rates in the following illustration are grossly over stated, because Banks have NOT paid a 4% return in decades, the theory is correct, so please take a look! This also shows the importance of having your interest earned "Deferred instead of being Non-Deferred". If you have your interest "Deferred, then you are NOT taxed until you pull it out and use it, so the $400.00 earned for the year in the following illustration is again NOT taxed and would continue to grow and you would be AHEAD of inflation. Just something to think about.....