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Chapter 6: Saving
Question | Answer |
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saving | setting aside part of your income instead of spending it. |
Deposit account | You use this account to save money. You earn interest on the money you save. |
Interest | money that you earn because you saved money. It is like a thank you from the financial institution for saving money with them. The interest you earn is a percentage of the amount you have saved. |
Simple interest | original amount saved x interest rate / 100 |
Compound interest | balance at start of year x interest rate / 100 |
DIRT | Deposit Interest Retention Tax. This is the tax you pay on interest you earn. |