1. Let your money, make you money!! If it was guaranteed that if you invested $100 every month for 40 years (for a total investment of $48,000) that the money would increase to $200,000 would you start investing today?

2. You deposit money into banks, who then loan out your money to others Interest Rate: annual amount (%) either saved or paid out Banks charge you interest rates on loans –Cars: 8% / Houses 5-6% –Credit cards: 15-20% or more Banks pay you interest rates on savings accounts

3. Compound Interest: $100 each month for…. Inter est Rate 5 Yrs $6000 101520253035 40 48,000 2.0%$6,31513,294 21,00 6 29,52 9 38,94 7 49,35 5 60,85673,566 4.0%$6,65214,774 24,69 1 36,80 0 51,58 4 69,63 6 91,678 118,59 0 6.0%$7,01216,470 29,22 7 49,43 5 69,64 6 100,9 54 143,18 3 200,14 5 Interest paid on original deposit + any interest earned in earlier years

4. So, where should you put your money?

5. Savings Accounts Deposit money into banks –FDIC insured Deposits up to $250,000 are backed (insured) by the federal gov Can’t lose $ You can withdraw / deposit at any time –May have a minimum deposit of $25 –May charge a monthly fee! Low interest rates –0.05% per year

6. .8% Discover savings

7. Money Market FDIC insured Higher minimum balance usually May limit # of withdrawals per year Slightly higher interest rate –0.25 – 0.55%

8. CDs: Certificates of Deposit FDIC insured Minimum deposits Must keep in CD for a set amount of time (cannot withdraw!) Slightly higher interest rates –9 month CD: 0.35% –12 month CD: 0.60% (Wells Fargo)

9. 1.24% for a 12 month CD No minimum deposit

10. Rule of 72 To estimate how long it takes to double your money, take 72 and divide by your interest If your interest rate is 8% 72 / 8 = 9 years to double your original investment http://www.primerica.com/public/rule-of- 72.html

11. Fun w/Math! A is the amount accumulated P is principal (original investment) r is the annual interest rate n is the number of years A =P(1+ rn) If you invested $5,000 for 5 years w/interest of 3% what is the amount you will have at the end of 5 years?