1. Introduction to Business Chapter 33
Starting a Savings Program
Essential Question: Why is it important to have a savings plan?

2. Objectives:
1.2 Business Environment (C): Students will understand the development and structure of business environments. They will demonstrate competency by identifying the dynamic components of business structure and its relationship to the global business environment.
1.2.2 Business Law–describe the sources of law, the structure of the court systems and ways in which these laws apply to basic consumer and business transactions.
1.2.4 Competitive Environment–explain the economic effects of competition on a business in an international marketplace.
1.2.8 Interrelationships of Business Operations–discuss the interrelationships between different business lines as they relate to finance, tax, operations, human resources, marketing, production, management, and the legal environment.
1.4 Economics and Financial Concepts (C): Students will understand the impact of global and domestic businesses, financial concepts, and integrated business models. They will demonstrate competency by using appropriate technology and other resources to solve business problems.
1.4.1 Business/Financial Relationships–analyze the financial implications of various functions of a business and describe how they interrelate
1.4.2 Demographics–interpret demographic data and explain its impact on the economy.
1.4.3 Economic Culture–explain how culture affects economic practice and business ethics

3. Chapter Objectives Explain why it is important to have a savings plan.
Compute interest on savings.
Discuss the factors to consider when comparing savings plans.
Describe how savings helps our economy.

4. Why have a savings plan? p.455.
Putting money away in a systematic way to help reach a financial goal is called savings plan.
Savings plans help us buy the goods and services we need and want as well as to prepare fore future expenses and emergencies.
Investing is using your savings to earn more money for you.

5. How do savings grow? p. 456 Earning interest.
Interest earned on savings increases the value of the amount you have available to use in the future.
Simple interest is interest that is computed only the amount saved.
Compound interest is interest computed on the amount saved plus the interest previously earned.

6. Selecting a savings plan
When comparing savings plans, a consumer should consider:
Safety or assurance that when monies are borrowed the principal is returned as well as insurance from the holding institution’s failure.
Yield is the percentage of interest that will be added to your savings over a period of time.
Liquidity is the ease with which an investment can be changed into cash without losing any of its value.

7. What saving does for the economy.
Savings helps the economy by making funds available for borrowing and other needs to:
Individuals
Home
Car
Personal loans and credit cards
Insurance claims
Businesses
Mortgages and loans for capital expenses such as buildings and equipment.
Short-term notes for cash flow.
Governments
Bonds for capital expenses such as buildings and equipment.

8. Types of savings plans General savings/checking accounts
Club accounts (for specific needs. Christmas, Vacation, etc…)
Certificates of deposit (CDs)
College planning accounts (IRS Code 503B)
Retirement accounts (401K, 403B, IRA Keough, etc…)
Bank accounts which earn interest
Savings
Checking
Investment accounts (Brokerage accounts)
Stocks (equities or shares of ownership).
Bonds (debt instruments or loans to companies and governments).
Insurance company accounts
Annuities contract to ensure a stream of income from investments over a period of time.
Life, home, auto, malpractice insurance contracts mitigate economic risk when a covered event occurs and is claimed.

9. Assignments
Do Now
Monday--Calculate Business Data p.464 #24
Tuesday--Calculate Business Data p.464 #25
Wednesday--Calculate Business Data p.464 #26
Read example and calculate answer in an Excel spreadsheet, show your work. Give a short explanation as to your answers.
Workshop Discussion
Communicate Business Concepts questions p
Discuss questions with your group and write a brief answer to both questions

10. Homework Define Key Terms Develop your Business Language 462.
Answer Review your reading questions p.462.
Section Four of The Resume Handbook for High School Students.