///////Twelfth Record//// 

This particular lesson was based on simple and compound interests. 

in·ter·est :noun /ˈint(ə)rist/

money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

T h e  G i s t 

Interest is the money you receive over a period of time for letting others in the same financial institution borrow your money. It is also the money that you pay over time for borrowing money. The rate of return or yield is when the interest is expressed as a percentage of the original investment. It is usually based on a one year time period. The earnings on savings plan depends on how often interest is calculated. Simple interest is calculated only on the principal (the amount you deposited). Compound interest is the calculated amount of saved plus any interest already earned. The interested is added to the pricipal (original amount), and your savings increase. Earn interest on interest. Even depositing small amounts of money each amount grow when interest is compounded. Even if you just deposited $1 each day in a  savings plan, you'd have over $4 700 after 10 years. The rule of 72 is also crucial. The rule of 72 is a way to find out how long a particular amount of money will take to double. The steps? You just divide 72 by the interest rate (percent). ie. 72/3.1% is 23.2  years to double. We also discussed the certain portions of the test  that was untaught, and that was the different types of savings plans there were. RRSP stoof for Registered Retired Savings Plan that is tax-free and is often a savings plan that parents use to save up money. RESP stands for Registered Educational Savings Plan and is often used by parents to save up money for their children's future (ie. post secondary education, car insurance). Savings is another example of a savings plan. Lastly, there are Neutral Funds (Stock) that aren't necessarily for saving money but mainly for buying stock, hoping that the price will go up. There was also a quote at which the test we had ended with: "The lower the risk, the lower the interest rate. The higher the risl, the high the interest rate", which suggests that you have to take risk in order to accumulate the amount of money that you have. 

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