Life is a journey. There are many paths we can take. Each of us is capable of drawing from many resources. If we can learn to plan and manage those resources well, we have a much better chance to achieve the things we really want in life.
Three factors determine how much money will be available to meet your specific goals. These three factors are time, money, and rate of interest.
Task 1. Study the two charts, Investor A and Investor B. After reviewing the two charts, answer the questions after the chart for Investor B. These figures are based on a 9% return.
Investor A
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AGE |
YEARS |
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25 |
1 |
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26 |
2 |
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27 |
3 |
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28 |
4 |
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29 |
5 |
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30 |
6 |
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31 |
7 |
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32 |
8 |
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33 |
9 |
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34 |
10 |
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35 |
11 |
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40 |
16 |
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45 |
21 |
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50 |
26 |
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55 |
31 |
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60 |
36 |
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65 |
41 |
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Value at Retirement |
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Less Total Contributions |
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Net Earnings |
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Investor B
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AGE |
YEARS |
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25 |
1 |
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26 |
2 |
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27 |
3 |
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28 |
4 |
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29 |
5 |
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30 |
6 |
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31 |
7 |
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32 |
8 |
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33 |
9 |
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34 |
10 |
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35 |
11 |
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40 |
16 |
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45 |
21 |
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50 |
26 |
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55 |
31 |
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60 |
36 |
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65 |
41 |
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Value at Retirement |
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Less Total Contributions |
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Net Earnings |
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How Time Affects the Value of Money, answer the following questions.
1. At $2,000 a year, how much did Investor A invest in the ten years between 25 and 35?
2. What is the year-end value of InvestorA's investment at the end of ten years?
3. At $2,000 a year, how much did Investor B invest over the 31 years?
4.What is the value at retirement of Investor A's investment?
5. What is the value at retirement of Investor B's investment?
6. What is Investor A's net earnings?
7. What are Investor B's net earnings?
8. Summarize in your own words what is meant by "the time value of money."
Task 2
Go to web site I Gen Zone Under Strain Your Brain, do the following activities: Need Some Wheels, Will that be cash or charge and Does interest interest you. Do the activities and print out your results.
Task 3
Go to Power, read the Power of Interest. When will $100.00 double at specific interest rates: Give your answer in number of years. 3%, 4%, 6%, 8%,12% and 24%.
Task 4
Go to.Investorwords and define these vocabulary words: Asset, Capital Gain, Capital Loss, Diversification, Dividends, Dollar-Cost Averaging, Earned Interest, Financial Planning, Investment, long-term Goals, Mutual Funds, Medium-Goals, Net Asset Value, Risk-To-Reward Relationship, Rule of 72, short-term Goals, Time Value of Money
Task 5
Read more about How to Study Stocks, go to Fool.com, then click on Investing Basics, then Getting Started. Why should one get started in an investment program in the first place? and What is the meant by the power of compounding? Please answer this in a essay form with a minimum of one page.
Task 6
Go back to Investingbasics. and go to Investing Concepts, How does your money grow? What are the different investment strategies? How should one plan and set goals?
Task 7.Fool.com/school
Continuing with Investingbasics, what are the differences between investing in mutual funds and bonds? What are some things that every investor should know about investing in mutual funds and bonds.
Task 8
Go to Investingbasics. How do the greats of the investing world analyze companies? What are the different approaches to picking stocks?
Task 9
Go to.Smartmoney.com. Identify the top ten funds. What are the one and three year returns for each of these funds.
Task 10
Play the stock market challenge for two weeks. Select ten stocks and keep a daily journal on the stock portfolio. Click on Smartstocks.com.
Do tasks 1-9 individually and staple together as one packet. Do task 10 individually but share your stock portfolio with a partner and print out performance graphs for the stock that you and your partner selected.
Task 1. Study the two charts. Before you start to answer the questions, take notice that the earlier one starts saving, the more money they will have through the power of compounding. Once you have completed the questions, summarize in your own words what is meant by "TIME, VALUE, OF MONEY"
Task 2. Once you have gone to www.equifax.com, go to I Gen Zone and do these activities:
· Need Some Cash
· Will that be cash or charge?
· Does interest, interest you?
At the end of each of these activities, there are questions that are related to each topic. Answer them and print out your results.
Task 3. Read about the Rule of 72. Using this simply formula, 72/% rate = years it will take your investment to double. Do the activities and print out your results.
Task 4. Go to www.investorwords.com; define all of the vocabulary words. This should be done in MS Word, typed and all answers in complete sentences.
Task 5. Read about investing basics from www.fool.com. Summarize why should one get started in an investment program and the power of compounding. This should be done in MS Word typed and all answers in complete sentences.
Task 6, 7, 8 are activities using www.fool.com/school/basics. Read the tasks and answer all questions in paragraph form.
Task 9. When investing in Mutual Funds, investors should take a long-term approach to investing. Go the www.smartmoney.com and study the top ten mutual funds. Find out the return for these funds for 1 yr., 3 yrs. and 5 years.
Task 10. Before you begin this activity set up an account with www.yahoo.com. After this is done go to games and click down to the stock market challenge. Select 10 stocks and establish a stock portfolio. With this game, one can buy and sell stocks while the market is in session. You are given $100,000 to invest with. Every Friday, I would like a summarization on how your investment portfolio has been performing during the week. Along with this, print out any business news that might have influence the price of the stocks that you selected.
Along with this I would like you to share your information with a partner and discuss each other's portfolio and give reasons why each of you choose the stocks that you did.
Task 5, 6, 7, 8, Standard 1.8 Reports-In written reports, students organize and convey information and ideas accurately and effectively.
Task 3, 4, 5, 6, 7, 8, 9, 10, Standard 1.18 Information Technology-Students use computers, telecommunications, and other tools of technology to research, to gather information and ideas, and to represent information and ideas accurately and appropriately.
Task 4, 5, 6, 7, 8, Standard 1.19 Research-Students use organizational systems to obtain information from various sources (including libraries and the Internet).
Task 9&10, Standard 3.7 Informed Decisions -Students make informed decisions.
Task 1&2, Standard 3.8 Personal Economics -- Students demonstrate an understanding of personal economic decisions, and account for their decisions.
Task 10, Standard 3.11 Interactions-Students interact respectfully with others, including those with whom they have differences.
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Standard 1.8, Reports |
Task 5, 6, 7, and 8 are completed. Student work is well organized, conveys information and ideas accurately and effectively. Excellent grammar, spelling and word usage. |
Information is not well organized. Mistakes in spelling, grammar and word usage. Some supporting information is missing. |
Less than half of the assignments are missing. The ideas and purpose are not presented in a logical manner.
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Standard 1.18, Information Technology |
All of the assignments are completed and saved on the "H" drive. All the information and ideas are accurate and appropriate. Is comfortable using the web and MS Word. |
Information is not well organized. Mistakes in spelling, grammar and word usage. Couldn't find appropriate information from web sites. |
Less than half of the assignments are missing. Little effort was made to do assignments. Does not know how to open a document and do basic editing. |
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Standard 1.19, Research |
Task 4,5,6,7,8 must be completed. Student work must be well organized and conveys information accurately and effectively. Excellent grammar, spelling and word usage. |
Information is not well organized. Mistakes in grammar, spelling and word usage. Some supporting information is missing. |
Less than half of the assignments are missing. The ideas and purpose are not presented in a logical manner.
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Standard 3.7, Informed Decisions
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Task 9&10 must be completed. For Task 9, students must gathered 1,3, and 5-year return on investments. For task 10, students must establish a portfolio and keeps track of a minimum of 10 stocks for two weeks and summarizes the results.
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Task 9&10 must be completed. For Task 9, student couldn't find the five-year rate of return. For Task 10 Student made an attempt to buy some stocks but didn't purchase $100,000 worth of stock and didn't summarize at the end
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Little effort was made to do assignments. Did not play the stock market game for the required two-week minimum
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Standard 3.8, Personal Economics |
Task 1,2 and 3 must be completed. Students demonstrate an understanding of the two graphs in Task 1 and understands how to use the rule of 72. |
Task 1 and 2 completed.
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Little attempt was made to do Task 1,2 and 3. |
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Standard 3.11, Interactions |
Student was available to help other students with their stock portfolios. Student worked with other students doing research on the web and assist them in setting up their yahoo account to play the stock market challenge game |
Needs teacher guidance. Will not stay engaged listens to what needs to be done but has difficulty with the task.
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Disrupts others in-group activity. Disregards the rights of others in-group activity and not interested in improving.
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The main concepts that were covered in this mini-unit were:
Þ You have time on your side because of the tremendous power of time value of money and the power of compounding.
Þ The amount of time, money, and the rate of interest you have will determine how fast your investment will grow.
Þ The Rule of 72 is a quick tool to help you find how long it will take your money to double.
Þ There are many different investment alternatives available to help you meet your investment goals.
Þ Education is the best form of investment.
