HUMS 202 Lecture Notes - Lecture 5: 529 Plan, Money Market Account, Deposit Account
1 Nov 2016
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You should put money in savings account before paying bills. Save money toward goals you have identified. Some major expenses eople save for include: costly unplanned expene, such as a car repair or medical bills, loss or reuction in income, education, retirement, vacation. This is because interest can be compounded daily, monthly, or annually. Daily compounding annualy and compound totl amount 1000. 03 at end of year you have 1010. 05 from compounding each day"s interest rate addd to. Rule of 72: divide 72 by current interest rate to estimate the number of years that it will take to double your initial savings account, 72/4%=18. 2 types of tools to help you save and grow your money: bank deposit accounts, non-deposit investment products. Important difference between the two is that your money in deposit accounts, such as savings account and cds, is federally insured but investments are not. With a deposit account: you can make money by earning interest.
