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Unformatted text preview: FCE 239 Savings/Safety Savings Outline Why savings? Terms Time Value of Money Features Checking Money Market Accounts Certificates of Deposit Laddering of CDs Savings Bonds Savings A. Paying o ! debt is a form of savings! B. Pay yourself FIRST! $ Bills Bills $ ! This Not This " Concepts for Discussion LIQUIDITY SAFETY/RISK FDIC, NCUA, FSLIC APR vs APY Return Risk FDIC Protection/Insurance Individual Joint Retirement $250,000* $250,000* $250,000* * until January 1, 2013 Annual Percentage Rate APR ANNUAL rate $$ will grow if your $$ is compounded once a year. Annual Percentage Yield APY APR plus the compounding of interest. Example: Year one $1,000 @ 5% $50.00 $1050 at end of yr Year two $1050 @ 5% $52.50 $1,102.50 9 More frequent compounding results in a greater or higher yield. 9 Daily, Monthly, Quarterly, Annual More interest earned Less interest earned Compound Interest The greatest mathematical discovery...
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This note was uploaded on 10/17/2011 for the course ECON 101 taught by Professor Thompson during the Spring '11 term at Michigan State University.
- Spring '11