SAVINGS

SAVING THE KEY TO WEALTH Grab a computer, log onto Wells Fargo -click on banking -click on savings accounts/CDs -Enter zip code (07006) if required Compare the 3 savings options Scroll to the bottom and click on view all rates How do interest rates compare in the different savings accounts? How the interest rates of CDs different from traditional savings accounts?

INTEREST Interest is the price paid for using someone else’s money. When you deposit money in a bank, you are lending the bank money. They will pay you interest Interest rate – amount paid in terms of a percentage

SIMPLE INTEREST Interest earned and paid to depositor. SO…. If you had $100 in a savings account that paid 6% simple interest, how much would you earn in year one? What about year two?

COMPOUND INTEREST Interest is left in account to earn additional interest. This process is called compounding. If you had $100 in a savings account that paid 6% compound interest, how much would you earn in year one? What about year two? Questions to ask: How often is it compounded? Daily? Monthly? Quarterly? Yearly? Which would be the best?

THE RULE OF 72 To determine how long it will take to double your money: 72 divided by Interest Rate To determine the interest rate that will double your money in a set number of years: 72 divided by Years to double investment