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Saving and Investing
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Saving and Investing
Saving
•Savings are that part of our income that we do not spend.
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Saving and Investing
Saving (continued)
•People save for many reasons:
to have money available to buy something in the future
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Saving and Investing
Saving (continued)
•People save for many reasons:
to have money available for unexpected bills
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Saving and Investing
Saving (continued)
•People save for many reasons:
to have an income when they retire
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Saving and Investing
Saving (continued)
•People save in many places:
banks
building societies
credit unions
An Post
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Saving and Investing
Investing
•Investing means using our money to earn a greater return than is possible from normal savings.
•People invest their money in different ways:
buying property, e.g. a house to rent out
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Saving and Investing
Investing (continued)
•People invest their money in different ways: (continued)
buying stocks and shares
setting up a new business
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Saving and Investing
Investing (continued)
•Before we invest our money we should ask the following questions:
How much money do we need for the investment?
Is there a risk, i.e. could we lose our money?
How easy is it to turn our investment back into cash?
How much can we earn from our investment and is it worth the risk?
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Saving and Investing
Interest
•Interest is money added to our savings each year
•Calculating Simple Interest
Simple interest is calculated as a percentage of the original sum saved
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Saving and Investing
Example (Simple Interest)
Delia Ward has €1,000 saved with Countybank. Simple interest is calculated at 10% each year. How much will she have in her account after 3 years?
Solution
10
Saving and Investing
Example (Simple Interest)
Delia Ward has €1,000 saved with Countybank. Simple interest is calculated at 10% each year. How much will she have in her account after 3 years?
Solution
10
Saving and Investing
Example (Simple Interest)
Delia Ward has €1,000 saved with Countybank. Simple interest is calculated at 10% each year. How much will she have in her account after 3 years?
Solution
10
Saving and Investing
Example (Simple Interest)
Delia Ward has €1,000 saved with Countybank. Simple interest is calculated at 10% each year. How much will she have in her account after 3 years?
Solution
10
Saving and Investing
• Calculating Compound Interest
Compound interest is calculated as a percentage of the total amount in our account at the end of each year.
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Saving and Investing
Example (Compound Interest)
Delia Ward has €1,000 saved with Countybank. Compound interest is calculated at 10% each year. How much will she have in her account after 3 years?
Solution
10
Saving and Investing
Example (Compound Interest)
Delia Ward has €1,000 saved with Countybank. Compound interest is calculated at 10% each year. How much will she have in her account after 3 years?
Solution
10
Saving and Investing
Example (Compound Interest)
Delia Ward has €1,000 saved with Countybank. Compound interest is calculated at 10% each year. How much will she have in her account after 3 years?
Solution
10
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