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Economic and management sciences

Grade 8

Business, consumer and financial knowledge and skills

Module 12

Methods of saving and calculating returns

Activity 1: to be able to discuss methods of saving and investing, and to be able to calculate the returns [lo 3.6]

Saving

This is keeping of a portion of your income so as not to spend it

Instead of using your total income to pay for goods and services, a portion can be withheld, (saved).

When planning the financial affairs (budget) of a family or business, it is important to plan for saving. This is necessary for planned, as well as unforeseen, expenses that may occur.

There are various ways of saving money so that it can yield a return at the same time. Money can be invested in a savings account at a financial institution, where it will earn interest for the owner. The interest is calculated as a percentage, which may differ from bank to bank. Anyone who is saving money should invest it where the highest interest can be earned.

Savings can also be invested in a fixed deposit. The money is invested at a fixed interest rate for a longer period. As the financial institution can use the money for a longer period of time, they are willing to pay higher interest than for a savings account. The longer the investment term, the higher the interest on a fixed deposit. Interest can be received monthly, quarterly, half-yearly, yearly, or when the investment term expires. In this way a regular income can be ensured. At the end of the predetermined investment term, the investor can decide whether he wants to end his fixed deposit or invest for a further term.

Before one can invest one needs to save.

Investment:

Money can be invested in an institution to make a profit , for example, buying shares. This is called investment.

Companies raise share capital (money) by selling shares in the company to the public. By purchasing shares in a company, one owns a small piece of that company and shares in its profit. The part of the profit paid to shareholders is called a dividend.

The holders of preference shares receive a fixed dividend percentage and have their dividends paid first. Ordinary shareholders only get dividends once preference shareholders have been paid and they do not receive a fixed dividend percentage.

The value (price) of some shares increases because the company does well. There are also shares which decrease in value because that company is not as profitable.

The art of investing in shares and the buying and selling thereof lie in the ability to buy shares, the prices of which later increase, at a low price and selling shares, the prices of which fall, at the right time.

Investing all ones money in only one investment is very risky. For example, if you invest all your money in gold shares and the price suddenly falls, you might not be able to sell them for what you paid. When money is invested in a fixed deposit, the interest rate is fixed. You will not benefit if interest rates increase during your investment term.

Beacause of such risks, it is advisable to invest in more than one product to spread the risks. This can be very expensive. A possible solution lies in investing in unit trusts. This method of investing enables the ordinary investor to invest his money, along with other investors, in a variety of products, for example, shares. Unit trusts sometimes offer a higher return and a better balance because the return consits of dividends, interest and capital growth.

The calculation of returns on various savings methods

Interest is the price paid for the use of someone else’s money. Don’t confuse this with owners interest.

The percentage at which interest is calculated over a period of time is known as the interest rate.

ASSIGNMENT:

Gather information on the interest rates of various savings methods at different banks and compare them by answering the following questions in the table.

1. Calculate the interest that a person would earn if he saved R5 000 over a period of one year.

2. Calculate the interest that a person would earn if he saved R5 000 over a period of 18 months.

FINANCIAL INSTITUTION SAVINGS METHOD
INTEREST YIELD
1 YEAR 18 MONTHS

Assessment

Learning Outcomes(LOs)
LO 3
Management, Consumer and Financial Knowledge and SkillsThe learner will be able to demonstrate knowledge and the ability to apply responsibly a range of managerial, consumer and financial skills.
Assessment Standards(ASs)
We know this when the learner:
3.1 differentiates between financial concepts used in business (e.g. fixed assets, current assets, liabilities, owner’s equity);
3.2 develops leadership and management strategies that will ensure a return on investments;
3.3 completes source documents (e.g. receipts, deposit slips, cheques) and records elementary cash transactions in a statement of receipts and payments;
3.4 uses keyboard skills and function keys in developing, storing and retrieving basic information;
3.5 explains the concept and analyses a statement of net worth;
3.6 investments the various methods of savings and investments (e.g. savings accounts, fixed deposits, shares, unit trusts), and calculates on a variety of investments.

Memorandum

ACTIVITY 1:

Questions & Answers

find the 15th term of the geometric sequince whose first is 18 and last term of 387
Jerwin Reply
I know this work
salma
The given of f(x=x-2. then what is the value of this f(3) 5f(x+1)
virgelyn Reply
hmm well what is the answer
Abhi
how do they get the third part x = (32)5/4
kinnecy Reply
can someone help me with some logarithmic and exponential equations.
Jeffrey Reply
sure. what is your question?
ninjadapaul
20/(×-6^2)
Salomon
okay, so you have 6 raised to the power of 2. what is that part of your answer
ninjadapaul
I don't understand what the A with approx sign and the boxed x mean
ninjadapaul
it think it's written 20/(X-6)^2 so it's 20 divided by X-6 squared
Salomon
I'm not sure why it wrote it the other way
Salomon
I got X =-6
Salomon
ok. so take the square root of both sides, now you have plus or minus the square root of 20= x-6
ninjadapaul
oops. ignore that.
ninjadapaul
so you not have an equal sign anywhere in the original equation?
ninjadapaul
hmm
Abhi
is it a question of log
Abhi
🤔.
Abhi
I rally confuse this number And equations too I need exactly help
salma
But this is not salma it's Faiza live in lousvile Ky I garbage this so I am going collage with JCTC that the of the collage thank you my friends
salma
Commplementary angles
Idrissa Reply
hello
Sherica
im all ears I need to learn
Sherica
right! what he said ⤴⤴⤴
Tamia
hii
Uday
hi
salma
what is a good calculator for all algebra; would a Casio fx 260 work with all algebra equations? please name the cheapest, thanks.
Kevin Reply
a perfect square v²+2v+_
Dearan Reply
kkk nice
Abdirahman Reply
algebra 2 Inequalities:If equation 2 = 0 it is an open set?
Kim Reply
or infinite solutions?
Kim
The answer is neither. The function, 2 = 0 cannot exist. Hence, the function is undefined.
Al
y=10×
Embra Reply
if |A| not equal to 0 and order of A is n prove that adj (adj A = |A|
Nancy Reply
rolling four fair dice and getting an even number an all four dice
ramon Reply
Kristine 2*2*2=8
Bridget Reply
Differences Between Laspeyres and Paasche Indices
Emedobi Reply
No. 7x -4y is simplified from 4x + (3y + 3x) -7y
Mary Reply
how do you translate this in Algebraic Expressions
linda Reply
Need to simplify the expresin. 3/7 (x+y)-1/7 (x-1)=
Crystal Reply
. After 3 months on a diet, Lisa had lost 12% of her original weight. She lost 21 pounds. What was Lisa's original weight?
Chris Reply
what's the easiest and fastest way to the synthesize AgNP?
Damian Reply
China
Cied
types of nano material
abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
Porter
many many of nanotubes
Porter
what is the k.e before it land
Yasmin
what is the function of carbon nanotubes?
Cesar
I'm interested in nanotube
Uday
what is nanomaterials​ and their applications of sensors.
Ramkumar Reply
what is nano technology
Sravani Reply
what is system testing?
AMJAD
preparation of nanomaterial
Victor Reply
Yes, Nanotechnology has a very fast field of applications and their is always something new to do with it...
Himanshu Reply
good afternoon madam
AMJAD
what is system testing
AMJAD
what is the application of nanotechnology?
Stotaw
In this morden time nanotechnology used in many field . 1-Electronics-manufacturad IC ,RAM,MRAM,solar panel etc 2-Helth and Medical-Nanomedicine,Drug Dilivery for cancer treatment etc 3- Atomobile -MEMS, Coating on car etc. and may other field for details you can check at Google
Azam
anybody can imagine what will be happen after 100 years from now in nano tech world
Prasenjit
after 100 year this will be not nanotechnology maybe this technology name will be change . maybe aftet 100 year . we work on electron lable practically about its properties and behaviour by the different instruments
Azam
name doesn't matter , whatever it will be change... I'm taking about effect on circumstances of the microscopic world
Prasenjit
how hard could it be to apply nanotechnology against viral infections such HIV or Ebola?
Damian
silver nanoparticles could handle the job?
Damian
not now but maybe in future only AgNP maybe any other nanomaterials
Azam
Hello
Uday
I'm interested in Nanotube
Uday
this technology will not going on for the long time , so I'm thinking about femtotechnology 10^-15
Prasenjit
can nanotechnology change the direction of the face of the world
Prasenjit Reply
At high concentrations (>0.01 M), the relation between absorptivity coefficient and absorbance is no longer linear. This is due to the electrostatic interactions between the quantum dots in close proximity. If the concentration of the solution is high, another effect that is seen is the scattering of light from the large number of quantum dots. This assumption only works at low concentrations of the analyte. Presence of stray light.
Ali Reply
the Beer law works very well for dilute solutions but fails for very high concentrations. why?
bamidele Reply
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic and management sciences grade 8. OpenStax CNX. Sep 11, 2009 Download for free at http://cnx.org/content/col11040/1.1
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