1. SAVING AND INVESTMENT CHOICES  Savings plans  Savings account  Certificate of deposit  Money market account  Securities  Stock investments  Bond investments  Mutual funds  Alternative investments  Real estate  Commodities  Collectibles SLID E 1

2. EVALUATING SAVINGS AND INVESTMENTS  Safety and risk  Potential return  Liquidity  Taxes SLID E 2

3. INVESTMENT PYRAMID SLID E 3

4. What is Interest?  There are two main types of interest that can be applied to loans simple and compound. Simple interest is a set rate on the principle originally lent to the borrower that the borrower has to pay for the ability to use the money. Compound interest is interest on both the principle and the compounding interest paid on that loan. The latter of the two types of interest is the most common.

5. SLIDE 5 QUARTERLY COMPOUND INTEREST

6. SLIDE 6 EXAMPLES OF DIFFERENT YIELDS $100 Invested for 20 Years at Different Yields with Annual Compounding

7. What is Savings? Savings - the amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time.

8. Checkpoint  How does saving influence economic activity?  Saving benefits the economy by making more money available for borrowing by individuals, businesses, and governments.  When this money is spent, demand for goods and services increases, resulting in more jobs and more spending by workers. SLID E 8

9. What are Investments?  An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.  In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price.

10. What is the difference between “Saving” And “Investing”