Business Math: Savings Lesson 5.1-5.3

Business Math: Savings Lesson 5.1-5.3

by Kiersten Rivera

Open Ended

Answer the following questions below:

Have you ever saved money?

How did you feel about saving money?

Do you still have this money saved?

Are you saving this money for something specific or just to meet needs as they arise?

Poll

What is one thing you would want to save for in the near future?

• Car

• College

• Vacation

• House

Open Ended

Name (3) long term financial goals you have for yourself now or in the future.

Open Ended

What does it mean to be financially stable?

Multiple Choice

What is the simple interest equation?

• P=IR

• I=PRT

• T=IRT

• I=TRI

​Simple Interest Example

What interest is paid for three months on $1,000 at 3.5% annual interest paid quarterly??

​

​(I=PRT)

​

​$1,000 x .035 = $35

​$35 / 4

​$8.75 interest

Fill in the Blanks

​What interest is paid for three months on $860 at 2.25% annual interest paid quarterly?

Fill in the Blanks

Find the interest for six months on $350 at 3.1% annual interest paid semiannually.

​Compound Interest Example

​Your bank pays 4% interest compounded quarterly on October 1 and January 1. You had $900 on deposit on July 1 and made no additional deposits or withdrawals. Find the account balance on January 1.

​

​$900 x 0.04 x 1/4 = $9.00 $909 x 0.04 x 1/4 = $9.09

​$900 + $9 = $909 x 9.09 =

​$909 (October 1) $918.09 (January 1)

Fill in the Blanks

Your bank pays 3% interest compounded quarterly on October 1 and January 1. You had $700 on deposit on July 1 and made no additional deposits or withdrawals. Find the account balance on January 1.

Fill in the Blanks

You deposited $400 on July 1 and kept your money on deposit for one year.  You made no deposits or withdrawals.  If your bank pays 2.5% interest compounded semiannually, what compound interest will you earn in one year?

​Compound Interest Table Example

​What compound interest is paid on $2,100 deposit earning 1.5% annual interest for 4 years?

​

​1.061364 x $2,100 = $2,228.86

​$2,228.86 - $2,100 = $128.86

Fill in the Blanks

What compound interest is paid on $1,100 deposit earning 1.25% annual interest for 3 years?

Fill in the Blanks

A deposit of $720 earns 1% annual interest for 7 years.  What compound interest will the deposit earn?

Open Ended

Why is it important to start saving early?