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Planning Ahead Saving money is an important part of financial freedom and responsibility.

Planning Ahead Saving money is an important part of financial freedom and responsibility. What are the advantages of having a savings account?. Lesson Objective Complete a savings account deposit slip and compute the total deposit. Content Vocabulary. savings account

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Planning Ahead Saving money is an important part of financial freedom and responsibility.

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  1. Planning Ahead Saving money is an important part of financial freedom and responsibility. What are the advantages of having a savings account?

  2. Lesson Objective Complete a savings account deposit slip and compute the total deposit. Content Vocabulary savings account A specific kind of savings account that earns interest. deposit Checks, currency, or coins put into a banking account, savings and loan, credit union, or brokerage firm. • savings account • deposit

  3. Lesson Objective Fill out a savings account withdrawal slip. Content Vocabulary withdrawal Money taken out of a bank account. • withdrawal

  4. Making a Withdrawal

  5. Lesson Objective Compute the new balance of a savings account statement. Content Vocabulary account statement A bank statement that shows the status of your account, including all deposits to, withdrawals from, and interest earned and credited to your account. • account statement

  6. Lesson Objective Calculate simple interest and the amount. Content Vocabulary • interest interest The amount of money paid for the use of a lender’s money. simple interest Interest paid only on the original principal. principal The amount of money earning interest. annual interest rate The percent of the principal earned as interest in one year. • simple interest • principal • annual interest rate

  7. Lesson Objective Determine the compound interest and the amount. Content Vocabulary • compound interest compound interest Interest earned not only on the original principal but also on the interest earned during previous interest periods, earning interest on interest.

  8. Lesson Objective Find compound interest using a table and the compound interest formula. Content Vocabulary • compound interest table compound interest table A tool to calculate compound interest quickly.

  9. Lesson Objective Calculate the interest for daily compounding. Content Vocabulary • daily compounding daily compounding Interest that is computed each day and added to the account balance.

  10. Lesson Objective Compute the future value of an ordinary annuity and an annuity due. Content Vocabulary • annuity annuity An account into which someone deposits an equal amount of money at equal periods or equal intervals of time. ordinary annuity An account in which equal deposits are made at eh end of each interest period. annuity due An account in which equal deposits are made at the beginning of the interest period and start earning interest immediately. • ordinary annuity • annuity due

  11. Summary Deposits Withdrawals Account Statements Know the status of you account. • Forms of Interest • Simple Interest • Compound Interest Daily Compounding Compound Interest Tables • Annuities • Ordinary Annuity • Annuity Due Banking Tools Savings accounts safely hold money and earn interest.

  12. Tyson Bingell deposits the money he earned in tips into his savings account. He has 2 twenty-dollar bills, 8 ten-dollar bills, 18 five-dollar bills, and 118 one-dollar bills. What is his total deposit? • $128 • $228 • $328 • $428

  13. ALGEBRA Victor Vazquez deposited checks totaling $1,985.40 into his savings account. He withdrew $100 while depositing some coins. If his total deposit was $1,750.40, how much did Victor deposit in coins? • $35.00 • $65.00 • $135.00 • $270.00

  14. 65 100 Twenty-seven and dollars as a numeral is: • $26.56 • $27.65 • $27.85 • $72.65

  15. The previous balance in William Hobb’s savings account is $2,305.60 and $5.40 in interest. He made a deposit of $306.50 and withdrew $521.00. What is his new balance? • $2,096.50 • $2,650.90 • $3,127.70 • $3,138.50

  16. John Arleque deposits $6,300 in an account that pays an annual 3.5% interest rate. Determine the simple interest for 3 years. • $220.50 • $350.80 • $540.75 • $661.50

  17. ALGEBRA Nathan Perez earned $220 in simple interest in 9 months at an annual interest rate of 8%. How much money did he invest? • $3,100.50 • $3,666.67 • $3,750.05 • $3,900.45

  18. Linda Howell’s savings account has a principal of $2,350. It earns 2.1% interest compounded quarterly. What is the amount in the account at the end of the second quarter? • $2,189.45 • $2,362.34 • $2,374.74 • $2,399.35

  19. April Yu has a principal of $900 in her savings account on January 1. The money earns interest at a rate of 5.5% compounded quarterly. What is the amount in the account after 6 months? Use the table on page A11. • $912.38 • $922.64 • $924.91 • $927.11

  20. Terrance LaMay deposits $5,000 in an account that pays 5.5% interest compounded daily. How much interest will he earn in 31 days? Use Amount of $1.00 = 1.00468 to find the answer. • $23.40 • $32.50 • $35.60 • $38.10

  21. Jason Miller deposits $300 in an ordinary annuity at the end of each quarter. The account earns 8% interest compounded quarterly. What is the future value of the account in 2 years? Use the value of 8.58297 to find the answer. • $1,209.45 • $2,574.89 • $2,890.45 • $3,200.50

  22. Building a Budget In this project you will use what you learned to create a personal budget to help you meet your financial goals.

  23. Brainstorm Step 1 • List several careers that interest you. Choose one. • Brainstorm monthly living expenses, monthly fixed expenses, and annual expenses.

  24. Research Step 2 • Use the Internet and/or local newspapers to search for job openings in your chosen career. • Research the cost of monthly living expenses, monthly fixed expenses, and annual expenses in your community.

  25. Explore Your Community Step 3 Interview two adults in your community about the decision-making process they use when developing a personal budget. Ask them to share any tips they might have for sticking to their budgets.

  26. Create Your Budget Step 4 • Calculate your monthly net income. • Use the Monthly Manager spreadsheet application to determine your monthly budget. • Develop a pie chart showing your monthly expenses.

  27. Develop Your Presentation Step 5 Use a word-processing program to write a one-page report and a 3–5 slide presentation to share with your class. Include your pie chart.

  28. Evaluate Your Presentation Step 6 Go to glencoe.com for an evaluation rubric.

  29. End of Chapter 5 Savings Accounts

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