1
Define a commercial bank
A financial institution that offers a range of financial services to its customers.
Give an example of a future need
Collage
Wedding
etc...
Define Savings
A part of your income that you do not spend.
What does DIRT stand for
Deposit Interest Retention Tax
Name 3 commercial banks in Ireland
PTSB
BOI
AIB
What does AER stand for
Annual Equivalent Rate
What is the name given to the original sum saved when saving
Principal
Define Interest
When you save money with a financial institution, they give you a financial reward (a thank you) for saving your money with them.
This is calculated from the amount that you have saved and is added onto your savings at the end of the year.
When a group of people have access to a financial institution (credit union) according to a number of factors such as living in the same area.
A common bond
Compound interest is...
A type of interest that takes into account any interest that has been added on in the previous year.
Explain three advantages of saving money with a financial institution.
1. Safety - No risk of theft, you will not lose your money.
2. Interest - You can earn interest on your savings (a thank you for saving money).
3. Convenience - Shopping online, some shops don't accept cash.
4. Loans - Chances of getting a loan are increased (creditworthiness improves).
Where can you save money - List 3 financial institutions
1. Credit Union
2. An Post
3. Commercial Bank
Outline 3 reasons why people save
1. Future Wants - To afford something in the future, small or big.
2. Unforeseen Events - To have money for "rainy days".
3. Retirement - To have extra money when you stop working.
4. Receive Interest - Interest is added onto savings when kept in financial institutions.
What is the formula for simple interest
Price x Rate x Time
(P x R x T)
The type of interest where the interest is calculated as a percentage of the amount of money you have originally put into your account. It DOES NOT take into account any interest that has been added into your account by the financial institution.
Simple Interest
Explain the difference between simple interest and compound interest
Simple interest is calculated only on the original amount saved, while compound interest is calculated on both the original amount and any earned interest, leading to faster growth over time.