1. Unit 4 - Investing:
Making Money Work for You

2. Savings and Investments
Unique
Savings
Features
Unique
Investment
Features
Common
Features
What are some features common to both investments and savings?
3-A

3. Investing Weekly at 5% Interest
Amount Saved
Per Week
Value After
10 Years
$ 7.00
$ 4,720
$ 14.00
$ 9,440
$ 21.00
$ 14,160
$ 28.00
$ 18,880
$ 35.00
$ 23,600
3-B 1

4. Investing Annually to Achieve a Goal
Value of $20
1 Year
2 Years
4 Years
6 Years 4%
$20.80
$21.63
$23.40
$25.31 5%
$21.00
$22.05
$24.31
$26.80 6%
$21.20
$22.47
$25.25
$28.37 8%
$21.60
$23.33
$27.21
$31.74
10%
$22.00
$24.20
$29.28
$35.43
3-C 1 2 3 4 5

5. * Assumes a 365-day year for daily amounts
To Have $50,000 at 8% Interest
Number of
Years Saving
Monthly
Amount
Daily
Amount* 6
$543.33
$17.79 4
$887.31
$29.06
Assumes a 365 day year for the daily amounts. 2
$1,928.03
$63.17
* Assumes a 365-day year for daily amounts
3-D 1 2 3

6. Investing a $10,000 Lump Sum 5% $12,763 $16,289 $20,789 $26,533 6%
Interest
Rate 5
Years 10
Years 15
Years 20
Years 5%
$12,763
$16,289
$20,789
$26,533 6%
$13,382
$17,908
$23,966
$32.071 7%
$14,026
$19,672
$27,590
$38,697 8%
$14,693
$21,589
$31,722
$46,610 9%
$15,386
$23,674
$36,425
$56,044
10%
$16,105
$25,937
$41,772
$67,275
5 years at 5% 12,763
11%
$16,851
$28,394
$47,846
$80,623
12%
$17,623
$31,058
$54,736
$96,463
3-E 1

7. Investing $1,000 Annually 5% $5,526 $12,578 $21,579 $33,066 6% $5,637
Interest
Rate 5
Years 10
Years 15
Years 20
Years 5%
$5,526
$12,578
$21,579
$33,066 6%
$5,637
$13,181
$23,276
$36,786 7%
$5,751
$13,816
$25,129
$40,995 8%
$5,867
$14,487
$27,152
$45,762 9%
$5,985
$15,193
$29,361
$51,160
10%
$6,105
$15,937
$31,772
$57,275
11%
$6,228
$16,722
$34,405
$64,203
12%
$6,353
$17,549
$37,280
$72,052
3-F 1 1

8. Answers to Exercise 3B ? ? ? ? ? ? 4% $10.40 $10.82 $11.70 $12.65 8%
Interest Rate
1 Year
2 Years
4 Years
6 Years 4%
$10.40
$10.82
$11.70
$12.65 ? ? 8%
$10.80
$11.66
$13.60
$15.87 ? ? ? ?
3-G 1 2 3 4 5 6

9. Rule of 72 72 = 72 = Years Needed to Double Investment Interest Rate
Required =
Years Needed to
Double Investment
3-H

10. Rule of 72: $10,000 Invested INTEREST RATE Year 3% 6% 12% 6 $20,000 12
$40,000 18
$80,000 24
$20,000
$40,000
$160,000
3-I

11. Financial Planning Pyramid
Penny
Stock
Commo- dities
Collectibles
Speculative
Stock / Bonds /
Mutual Funds
Real
Estate
Blue-Chip
Common
Growth
Mutual
Funds
High-Grade
Convertible
Bonds
Preferred
Balanced
Corporate Bonds
or Mutual Funds
Municipal Bonds
Money Market
Accounts
Certificates
of Deposit
U.S. Savings
Insured Savings /
Checking Accounts
Treasury
Issues
Financial Planning Pyramid
Highest Risk
Highest Earnings
Lower Risk
Lower Earnings
3-J

12. The Impact of Higher Returns on Savings and Investments
Rule of 72: The approximate frequency with which $100 doubles at specific interest rates
Interest Rate
6 Yrs.
9 Yrs.
12 Yrs.
18 Yrs.
24 Yrs. 3%
$200 4%
$200 6%
$200
$400 8%
$200
$400
12%
$200
$400
$800
3-K 1 2

13. Dollar-Cost Averaging
One-Time Investment
Dollar-Cost Averaging
Amount
Invested
Share
Price ($)
Shares
Purchased
Amount
Invested
Share
Price ($)
Shares
Purchased
$1,000.00
$20.00
50.00
$100.00
$20.00
5.00
$100.00
$19.50
5.13
$100.00
$19.25
5.19
$100.00
$19.75
5.06
$100.00
$19.20
5.21
$100.00
$18.90
5.29
100/19.78 = 5.06 shares, not 5.08 (second to last row on the right)
Total shares purchased then becomes 51.66, not 51.68
$100.00
$18.00
5.56
$100.00
$18.60
5.38
$100.00
$19.78
5.06
$100.00
$20.90
4.78
$1,000.00
$20.00
50.00
$1,000.00
$19.39*
51.66
3-L
* Average Share Price 1 2 3 4