1. 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?

2. 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

3. 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

4. So, where should you put your money?

5. 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

6. 1.15%
Discover savings

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

8. 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)

9. 1.24% for a 12 month CD
No minimum deposit

10. 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

11. 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?