1. Unit: Savings and Investing Review: Write this down or make a note

2. Key Concepts • Interest = Principal x rate x time • Fixed versus variable rates • Liquidity – how accessible your money is to you • Savings: passbook, share account, CD, money market account, Holiday clubs, etc • Can you earn interest on checking accounts? • APR- interest rate stated as a yearly rate of return

3. Continued • Which account is best for you: • Constant access- use a passbook or share account • Limited access- holiday or money market account • Future access- possibly a CD, watch the market conditions and interest rates • Savings amount 10% • Emergency fund 4- 6 months of living expenses (savings, share, money market account) needs to be liquid

4. Vocabulary • Simple Interest- based on one year calculations: I = P x R x T • Compound Interest- principal plus interest reoccurring calculations (more than once a year) • Daily, monthly, quarterly, semi-annually, • Rule of 72- What does it say • Rule of 115 – what does it say • Peaco’s Rule- ???

5. Investing review • Stocks and mutual funds difference • Which one is more risky? • Calculations of gain or loss • Stock price x number of shares • Selling price x number of shares • Calculate difference • Percentage increase or decrease • N- 0 / O

6. Example • 100 shares of IBM stock purchased for $10 per share, sold all 100 shares a year later for $12 per share (assume no broker’s fees) • 100 x 10 = 1000 • 100 x 12 = 1200 • 200 profit • N- O / O • 1200 – 1000 / 1000 = • 200/1000 = .20 x 100 = 20% increase (gain)