CHAPTER 7 – SAVING tsio 1. Copy and fill in the blanks.
a. ____________ is a money reward given by a financial institution for saving money with them.
b. ____________ interest is calculated as a percentage of the original amount put into the savings account.
c. ____________ interest is calculated as a percentage of the total amount in the account at the end of each year.
d. The compound interest rate for savers is called the ____________ ____________ Rate (AER) or the Compound Annual Return (CAR).
e. ____________ interest rates remain the same for a set period of time.
f. ____________ interest rates can fall or rise.
g. The government tax on interest earned from a financial institution is called ____________ ____________ Retention Tax (DIRT).
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2. Give three reasons why a person might save money.
3. Outline three things a person can do to save money.
4. Explain what investing means and how it differs from saving.
5. What is the defining feature of a notice deposit account?
6. Lucy Adams saved €1,500 for three years at 3% AER.
a. How much interest did Lucy earn in the three years?
b. What was the balance in her savings account at the end of the three years?
7. Jake Henry saves €600 for a year at 2.5% interest. DIRT is deducted at 41%. Calculate the balance in his account at the end of the year.
8. Conduct a savings comparison of two financial institutions under the following headings:
• Saving options available • Additional benefits to savers • Access to funds.
9. Fiona Turnbull has €10,000 to invest. She is trying to decide between putting her money into an investment account in a financial institution and buying shares in new Irish pharmaceutical company. What things should Fiona consider when making her choice?
