ACCOUNTING 20 – PRACTICAL FINANCIAL KNOWLEDGE



ACCOUNTING 20 – Name:

PRACTICAL FINANCIAL KNOWLEDGE

1. What is an investment?

2. Why do people invest?

3. Define/look at financial institution websites for the information on the following investment topics in the charts provided :

-what are they? Terms?? Percentages? Two Advantages and tow disadvantages??

• GIC (guaranteed investment certificate)

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• Term deposit

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• TFSA’s

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• RRSP

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• RRIF

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• RESPs

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• Bonds

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• Stocks

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• Money market funds

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

• Savings accounts

|Definition | |

|terms | |

|percentages | |

|advantages | |

|disadvantages | |

Other questions you might have about investments:

4. Go to this website:



and calculate the following:

1. You put in $ 100 dollars per month for 5 years in a variable GIC with a rate of 2.5%. After this time, calculate the amount of money that you will make.

Months:

Principal:

%age of interest:

Interest Earned:

Total new amount:

2. Now take this money (from question # 1) and lock it in for 5 more years in a fixed GIC. Look for a competitive rate and quote the bank that you received this from. How much will you have earned?

Principal:

Time (in months):

%age of interest:

Interest:

Total new amount:

3. Invest 1000 dollars into a fixed RRSP today. At an average of 3.5 % return on interest. How much will this RRSP be worth in 40 years?

Principal:

Time (mths):

%age of interest:

Interest earned:

New amount after 40 years:

4. WHO WANTS TO BE A MILLIONAIRE??



This is an investment goal calculator. How much money do I want in the future!!!???

How much do you need to invest, per month, starting now, for the next 50 years…how long will it take to get to 1 million dollars? Start now!!!

_______ per month for ____________ years at 3 % interest.

Original investment ___________________

Interest earned ______________________

New amount = $1,000,000

Using this calculator….set your own financial goals for the next time frame:

Starting September 2017….ending June 2020…..

How much I would like? _________________

What I need to invest per month? _____________

Interest rate __________________

How much I actually invested ________________

The total amount after _________ months. __________________

TRY IT OUT!!!!! DREAM….

Using this calculator….set your own financial goals for the next time frame:

Starting _____________________….ending _________________…..

How much I would like? _________________

What I need to invest per month? _____________

Interest rate __________________

How much I actually invested ________________

The total amount after _________ months. __________________

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