Let your money, make you money!! BLU # Let your money, make you money!! If it was guaranteed that if you invested $100 every month for 40 years (for a total investment of $48,000) that the money would increase to $200,000 would you start investing today?

You deposit money into banks, who then loan out your money to others Interest Rate: annual amount (%) either saved or paid out Banks charge you interest rates on loans Cars: 8% / Houses 5-6% Credit cards: 15-20% or more Banks pay you interest rates on savings accounts

Compound Interest: $100 each month for…. Interest Rate 5 Yrs $6000 10 15 20 25 30 35 40 48,000 2.0% $6,315 13,294 21,006 29,529 38,947 49,355 60,856 73,566 4.0% $6,652 14,774 24,691 36,800 51,584 69,636 91,678 118,590 6.0% $7,012 16,470 29,227 49,435 69,646 100,954 143,183 200,145 Interest paid on original deposit + any interest earned in earlier years

So, where should you put your money?

Savings Accounts Deposit money into banks FDIC insured Deposits up to $250,000 are backed (insured) by the federal gov Can’t lose $ You can withdraw / deposit at any time May have a minimum deposit of $25 May charge a monthly fee! Low interest rates 0.05% per year

1.15% Discover savings

Money Market FDIC insured Higher minimum balance usually May limit # of withdrawals per year Slightly higher interest rate 0.25 – 0.55%

CDs: Certificates of Deposit FDIC insured Minimum deposits Must keep in CD for a set amount of time (cannot withdraw!) Slightly higher interest rates 9 month CD: 0.35% 12 month CD: 0.60% (Wells Fargo)

1.24% for a 12 month CD No minimum deposit

Rule of 72 72 / 8 = 9 years to double your original investment To estimate how long it takes to double your money, take 72 and divide by your interest If your interest rate is 8% 72 / 8 = 9 years to double your original investment

Fun w/Math! A =P(1+ r) n A is the amount accumulated P is principal (original investment) r is the annual interest rate n is the number of years A =P(1+ r) n If you invested $5,000 for 5 years w/interest of 3% what is the amount you will have at the end of 5 years?