3. Compound Interest
Compound on the amount saved plus the interest
previously earned
It is important to invest regularly to keep your savings
growth rate high
4. Certificate of Deposit
Allows you to earn a higher interest rate than a regular
savings account
It requires a minimum deposit of $100 to 1,000 or more
5. Money Market Account
Pays a variable interest rate based on various government
and corporate securities
A typical interest rate on a Money Market Account is 4-
5%
6. Mutual Funds vs Stock
Mutual Funds—Allow investors to spread out their risk
among many investments
Stock—Ownership in a corporation
8. What would the difference between a $100
Investment for 20 yrs at 5%, 8% and 10% Interest?
41,928.43
9. Liquidity
Ease with which an investment can be changed into cash
without losing its value
It is important because it is investments that can be
quickly turned into money
10. Common and Preferred Stock
Common Stock represents general ownership in a
corporation and a right to share in its profits
Preferred Stock has priority over common stock in the
payment of dividends
11. NYSE
NYSE is the New York Stock Exchange is the best known
stock exchange
The traders own or stock and trade among them
12. NASDAQ
National Association of Securities Dealers Automated
Quotations: a computerized data system to provide
brokers with price quotations
They exchange traded funds and stock