Bell Ringer – 4/30/08

1. In regard to banking, what is “earned interest”?

2. Explain the “Rule of 72”

3. Using the Rule of 72, calculate how long it would take to double a $300 deposit to a savings account with 4% interest.

2 Types of Investments• Income Investment – the investor is paid in

cash for owning the account or investment (ex: Savings Account)

• Growth Investment – person buys and holds an investment with the hope that it will increase in price, over time (ex: stocks, real estate)

AssignmentDescribe the following Income Investments

(info on pgs 35-26)Type of Income

InvestmentDescription Risks

Savings Account

U.S. Savings Bond

Certificate of Deposit

Money Market Deposit Account

Money Market Mutual Funds

Corporate & Government Bonds