1. Packet:
Read page 9, 10, 11 and complete questions on pages 12 and 13 for Homework.

2. Banking

3. Money

4. What Gives Something Value?

5. Definition 3 Characteristics

6. Medium of Exchange- Stuff used to exchange for other goods and services.

7. Standard of Value- agreed upon by all.

8. Store of Wealth- a way to keep wealth and store your work.

9. Gold
Worldwide value
Durable
Divisible

10. Origin of Currency & Banks
Gold Storage (Goldsmiths)
Paper Money= Receipts for Gold
Inflation= more receipts than gold

11. How do Banks Make a Profit?
Interest
Investments
Fees- Service Charges

12. Where does the bank get the money it lends and invests?

13. Interest Positive Interest Interest on Loans
Interest gained on deposits
a “reward” paid to the depositor
Interest on Loans

14. Simple Interest
Interest on the principle

15. $1,400 Principle= $1,000 10% interest Calculated Quarterly 1,000 x .10
100
1,100
1,200
1,300
1,400
Principle= $1,000
10% interest
Calculated Quarterly
$1,400

16. Interest on Interest (Balance)
Compound Interest
Interest on Interest (Balance)

17. $1464.10 Principle= $1,000 10% interest Compounded Quarterly
1, ( 1,331)
x x .10
(1,100) ( )
x .10
110
(1,210)
x .10
121 $