4/29/2008 Saving versus Investing. Saving Money stored away for a short term goal; usually in a savings account at a bank. This account has SMALL interest.

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Presentation transcript:

4/29/2008 Saving versus Investing

Saving Money stored away for a short term goal; usually in a savings account at a bank. This account has SMALL interest earning power, and can be accessed if needed.

Investing Money stored away for long term goals, in financial products such as stocks and bonds. This money has a higher change of earning power, and is not usually accessible without penalty.

What Do You Think? Page 28 Adam started saving per month when he turned 18, Beth started saving when she turned 24, both earn the SAME interest on their money. Beth will have more money than Adam by the age of 30? TRUE or FALSE

What Do You Think A Dollar today is worth less than a dollar in the future? TRUE or FALSE?

What Do You Think? The smaller the down payment someone makes on a car, the less interest the owner pays on the car loan? TRUE or FALSE?

What Do You Think? The higher the interest rate, the less time it takes to reach a savings goal? TRUE or FALSE

Class Work Exercise 3A Complete in workbook.

Time Value of Money… This describes the relationship between time, value and rate of interest.

Inflation… A dollar will buy LESS today than it did five years ago, due to the INCREASE in cost of goods and services. … inflation is when prices get higher or it takes more money to buy the same item.

Tomorrow… We will discuss interest…it will be very interesting!!