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    Johnny Son
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    Certificates of deposit allow you to earn interest by keeping money in the bank for a set period of time, while the bank can loan out your deposited funds. The Rule of 72 estimates how long it takes savings to double at a given interest rate by dividing 72 by the annual rate. The 50/30/20 rule recommends spending 50% of income on needs, 30% on wants, and saving 20%, while 529 accounts enable tax-free growth of funds saved for education expenses. Wealth is calculated by subtracting total debts from total assets.

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    Certificates of deposit allow you to earn interest by keeping money in the bank for a set period of time, while the bank can loan out your deposited funds. The Rule of 72 estimates how long it takes savings to double at a given interest rate by dividing 72 by the annual rate. The 50/30/20 rule recommends spending 50% of income on needs, 30% on wants, and saving 20%, while 529 accounts enable tax-free growth of funds saved for education expenses. Wealth is calculated by subtracting total debts from total assets.

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    3 views1 page

    Savings Terms

    Uploaded by

    Johnny Son
    Certificates of deposit allow you to earn interest by keeping money in the bank for a set period of time, while the bank can loan out your deposited funds. The Rule of 72 estimates how long it takes savings to double at a given interest rate by dividing 72 by the annual rate. The 50/30/20 rule recommends spending 50% of income on needs, 30% on wants, and saving 20%, while 529 accounts enable tax-free growth of funds saved for education expenses. Wealth is calculated by subtracting total debts from total assets.

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    Personal Finance Savings Terms

    Certificates of Deposit (CDs)


    - You agree to keep money in a CD for a set period of time
    - The bank pays you interest in return
    - The bank can loan out the money in you CD

    The Rule of 72 is a calculation that estimates the number of years it takes to double
    your money at a specified rate of return. If, for example, your account earns 4 percent,
    divide 72 by 4 to get the number of years it will take for your money to double. In this
    case, 18 years.

    50/30/20 Rule for Savings:


    50% expenses (Needs), 30% flexible spending(wants), 20% saving,

    529 Account
    A tax exempt fund that lets your savings grow for school
    A 529 college savings plan is a state-sponsored investment plan that enables you to
    save money for a beneficiary and pay for education expenses. You can withdraw funds
    tax-free to cover nearly any type of college expense

    Your wealth is defined by:


    Assets (what you own of Value) minus Liabilities (Debts) equals Wealth
    A-L=W

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