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• 2 Dealing with money

• 2.1 Saving and investing

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• Which 3 saving motives do we know?

  1. Goal motive
  2. Precautionary motive
  3. Capital motive

• Why is the interest that people or companies  have to pay higher?

  This is how banks earn money. Banks mediate between demand for and supply money.

• What is the calculation for single interest?

  Iev = p * K * n
  
  Iev = single interest
  p = interest percentage : 100
  K = capital sum
  n = number of periods

• What is compound interest?

  That is if interest is added to your savings account, next year you will be paid interest on the total savings and interest of the previous years. You will receive interest on interest.

• What is the calculation of compound interest?

  EWn = (1 +p)n *K
  
  EW = total value after n years (savings balance)
  n = number of periods
  p = interest rate : 100
  k = start capital

• What are the different types of savings accounts?

  Every type has its own conditions and interest rates
  
  

  • Easy acces savings account
    
  • Fixed rate bounds

• What are the characteristics for easy acces savings account?

  • Your savings are freely withdrawable
    
  • Interest rate is variable.

• What is investing in shares?

  • You become the co-owner of a company
    
  • you will get a part of the profit --> dividend

  
  Besides revenue from interest and dividend, an asset holder can profit or loose from a change in the value of an asset.

• How do we call when you profit or loose some capital?

  This is called capital gain or loss

• What is return on investment?

  This is called the total revenue.