1. Unit: Savings and Investing Review: Write this down or make a note

2. Key Concepts Interest = Principal x rate x time Fixed versus variable rates Liquidity – how accessible your money is to you Savings: passbook, share account, CD, money market account, Holiday clubs, etc Can you earn interest on checking accounts? APR- interest rate stated as a yearly rate of return

3. Continued Which account is best for you: – Constant access- use a passbook or share account – Limited access- holiday or money market account – Future access- possibly a CD, watch the market conditions and interest rates Savings amount 10% Emergency fund 4- 6 months of living expenses (savings, share, money market account) needs to be liquid

4. Vocabulary Simple Interest- based on one year calculations: I = P x R x T Compound Interest- principal plus interest reoccurring calculations (more than once a year) – Daily, monthly, quarterly, semi-annually, Rule of 72- What does it say Rule of 115 – what does it say Peaco’s Rule- ???

5. Investing review Stocks and mutual funds difference Which one is more risky? Calculations of gain or loss Stock price x number of shares Selling price x number of shares Calculate difference Percentage increase or decrease N- 0 / O

6. Example 100 shares of IBM stock purchased for $10 per share, sold all 100 shares a year later for $12 per share (assume no broker’s fees) 100 x 10 = 1000 100 x 12 = 1200 200 profit N- O / O 1200 – 1000 / 1000 = 200/1000 =.20 x 100 = 20% increase (gain)