Selected topics in finite mathematics/Managing your money

Objectives
Understanding the basics of finance and interest and applying them to real life situations.

Details

 * A checking account is a bank account in which the owner can deposit or withdraw money at any time. Writing checks or using a debit card are also ways to access funds.


 * A savings account is a bank account that enables the owner to deposit or withdraw money at any time.


 * A CD is a bank account that prevents the owner from depositing or withdrawing money until a certain maturity date. Interest for these accounts is typically higher.


 * Interest is a compensation paid by the bank for the use of your money. These can be reported in two different ways. A Nominal Rate, also called APR, is the sum of 12 monthly interest payments (if compounded monthly). Or as a Yield Rate, also called APY, which is the rate of change over the course of a year.


 * If i is an APR, then FV=PV(1+i/m)^(nm).
 * If i is an APY, then FV=PV(1+i)^n.

Examples
[There is 1% compounded interest every year on an account with a $100 initial deposit, so after a year, the account will hold $101 if no additional deposits or withdrawals are made.]

[Give an example of benefits associated with a checking account?]

[Give an example of fees associated with a savings account?]

[2% apy for two years after a $10000 deposit= $1404]