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

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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

• 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