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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]


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.


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.


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.



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.



Questions & Answers

Do somebody tell me a best nano engineering book for beginners?
s. Reply
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
how to fabricate graphene ink ?
for screen printed electrodes ?
What is lattice structure?
s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
On having this app for quite a bit time, Haven't realised there's a chat room in it.
what is biological synthesis of nanoparticles
Sanket Reply
what's the easiest and fastest way to the synthesize AgNP?
Damian Reply
types of nano material
abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
many many of nanotubes
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what is the function of carbon nanotubes?
I'm interested in nanotube
what is nanomaterials​ and their applications of sensors.
Ramkumar Reply
what is nano technology
Sravani Reply
what is system testing?
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
what is system testing
what is the application of nanotechnology?
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
anybody can imagine what will be happen after 100 years from now in nano tech world
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
name doesn't matter , whatever it will be change... I'm taking about effect on circumstances of the microscopic world
how hard could it be to apply nanotechnology against viral infections such HIV or Ebola?
silver nanoparticles could handle the job?
not now but maybe in future only AgNP maybe any other nanomaterials
I'm interested in Nanotube
this technology will not going on for the long time , so I'm thinking about femtotechnology 10^-15
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
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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