Friday, 6 February

Reminder that the first part of My Future (Financial) History is due next week.

Class continued looking at "typical" person's timeline.

We then studied the effect of compounding interest on investments and debts using the following chart. This chart is due next class.

Principle    Interest    Credit    Debt

Name _________________________________________ Date __________________ Period _______

Principle; Interest; Credit; and Debt are related words. In order to study these words you should recognize and understand some conventions used by many people when dealing with finances. Negative numbers, we’ll refer to these as “debt” (unless you are an accounting person) are often written like this: ($1,000); you are most likely used to thinking of this as -10,000. (Also, negative numbers are often displayed in the color red. Positive numbers in these cases are usually black.)

Principle is an amount of money that one starts with. Sometimes it is a debt as when it is an amount borrowed.

Three common reasons to borrow money:

Sometimes it is a positive number as when it is invested.

Three  common ways people invest money:

Interest is a percent increase in an investment or (debt). Interest usually “compounds” which means that it increase and also increases based on it’s previous increase. (Interest that only increases on the original principle is called “simple interest”).

The power of “compounding interest” is significant. Complete the tables below in order to understand the power of compounding.

		Interest	Interest	Investment	Debt / Loan	Investment	Debt / Loan
	Reason	Savings (compounding)	Saving (simple)
Principle: beginning amount		$100.00	$100.00
Interest rate (paid) or earned		2%
	1	$102.00
	2	$104.04
	3	$106.12
	4	$108.24
	5	$110.41
	6	$112.61
	7	$114.87
	8	$117.16
	9	$119.51
	10	$121.90
Principle		$100.00
Line 10- Principle = Total earned or total cost		$21.90

Mr. Zartler introduced the area of Economics called "Game Theory" by having students study and discuss an article on the Super bowl.

The class began studying the vocabulary words from last class' handout. The words: wants; income; investment; credit; debt; and income were highlighted; these words should be included in "The Story of My Finanicial Life" the draft of which (the first ten years is due Tuesday / Wednesday) of next week.

The class began constructing a timeline for a "typical" life that includes major milestones such as graduation, getting married, retiring, buying a home, etc.

Monday / Tuesday 2 /3 February

Welcome to Economics Class.

Our first class covered a lot of material including what Economics is and isn't; establishing attitudes we have towards money, and beginning a excercise in envisioning our future. The hand outs for these assignments are below.

Students should return their government books ASAP.

The first two columns of the "Writing About Your (Financial) Future" graphic organizer are due next class; the first part of the written work is due next Tuesday and Wednesday.

Introduction to Economics 2015

Name ______________________________________ Date ____________________ Period _______

ECONOMICS: the social science that studies economic activity to gain an understanding of the processes that govern the production, distribution and consumption of goods and services in an economy.

In terms of Economics I …

KNOW	THINK I KNOW	WANT TO LEARN

INTRODUCTORY UNIT VOCABULARY INCLUDES:

Value

Wants

Needs

Supply

Demand

Scarcity

Cost

Economy

Opportunity Cost

Return on Investment (ROI)

Risk

Budget

Income

Capital

Investment

Credit

Principal

Interest

Debt

Deficit

Consumer

Producer

Market

Value: the worth of something as measured in goods, services, or a medium of exchange

Wants: something that you would like to have but don't necessarily need

needs something that you must have to survive

supply: 1) the total amount of a goods or services available at any given time; 2) A schedule of how much producers are willing and able to sell at all possible prices during some time period. 

Demand: how much consumers are willing and able to buy at all possible prices during some time period

Scarcity: not enough of a certain resource to satisfy people's needs and wants

Goods: real items or things, such as cars, watches, and clothing

Services:  work that is done for other people, such as by waiters, lawyers, nurses, bank tellers, baby sitters, and plumbers

Cost: what is given up in order to obtain something else

Economy: the way in which human resources and natural resources are used to produce goods and services

Opportunity: cost What is given up in order to obtain something else.

Risk: exposure of something to danger

Return on Investment (ROI): the increase in value of something over time minus the opportunity cost of something over the same time

Budget: a plan of how much money a person, business, government, or organization is able to spend and how it will be spent

Income: the money a person gets from salary or wages, profits, interest, investments, and other sources

Capital: 1) money used to generated additional wealth; 2)human-made items, such as machines and tools, that are used to produce goods and services

Investment: the risking of money and time to get something in return (usually interest or other income)

Credit: money loaned, usually for a fee, that must be paid back

Principal: a sum of money in an account, not including interest earned; in a loan, the original amount of money borrowed

Interest: the money a person pays to borrow money, or the money a bank pays depositors for using their money; often expressed as an annual percentage of interest (increase)

Debt :1) money owed when someone or a government buys something or credit or borrow money

Consumer: someone who buys and uses goods and services

Producer: the people or businesses that provide goods and services

market

Market: A setting where buyers and sellers establish prices for identical or very similar products, and exchange goods and/or services. 

Name ______________________________________________________ Date _______________________ Period _______

Writing About Your (Financial) Future (Fantasy & Reality)

You are to write a future history of yourself; this should be fiction (not fantasy). Your story should include specific details addressing each of the points below. You (hopefully) have a long future, so working on this paper should take some serious envisioning. The final draft will include visions for five periods in your life. Your first rough draft will include the first three periods: 2 years; 5 years; and 10 years from

today. The first draft is due: __________________________; the second rough draft is due: The final story is due: __________________

	2 Years:	5 Years:	10 Years:	30 Years:	50 Years:
Where do you imagine living? Be specific about your living situation. Create  a list of what you need as well as what you may want.
What do you imagine will do to pay for your lifestyle? Is this something you really enjoy or is it something that “pays the bills”?
Will you need to do or not do something in order to achieve a goal (live the vision you have later in life)?
What do you want to spend free time doing? What do you know about these activities, do they require any special tools, equipment, monthly payments?
Who will be part of your life?
Other parts of your vision and dreams:

ECONOMICS!