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Economic and management sciences

Grade 8

Business, consumer and financial knowledge and skills

Module 12

Methods of saving and calculating returns

Activity 1: to be able to discuss methods of saving and investing, and to be able to calculate the returns [lo 3.6]


This is keeping of a portion of your income so as not to spend it

Instead of using your total income to pay for goods and services, a portion can be withheld, (saved).

When planning the financial affairs (budget) of a family or business, it is important to plan for saving. This is necessary for planned, as well as unforeseen, expenses that may occur.

There are various ways of saving money so that it can yield a return at the same time. Money can be invested in a savings account at a financial institution, where it will earn interest for the owner. The interest is calculated as a percentage, which may differ from bank to bank. Anyone who is saving money should invest it where the highest interest can be earned.

Savings can also be invested in a fixed deposit. The money is invested at a fixed interest rate for a longer period. As the financial institution can use the money for a longer period of time, they are willing to pay higher interest than for a savings account. The longer the investment term, the higher the interest on a fixed deposit. Interest can be received monthly, quarterly, half-yearly, yearly, or when the investment term expires. In this way a regular income can be ensured. At the end of the predetermined investment term, the investor can decide whether he wants to end his fixed deposit or invest for a further term.

Before one can invest one needs to save.


Money can be invested in an institution to make a profit , for example, buying shares. This is called investment.

Companies raise share capital (money) by selling shares in the company to the public. By purchasing shares in a company, one owns a small piece of that company and shares in its profit. The part of the profit paid to shareholders is called a dividend.

The holders of preference shares receive a fixed dividend percentage and have their dividends paid first. Ordinary shareholders only get dividends once preference shareholders have been paid and they do not receive a fixed dividend percentage.

The value (price) of some shares increases because the company does well. There are also shares which decrease in value because that company is not as profitable.

The art of investing in shares and the buying and selling thereof lie in the ability to buy shares, the prices of which later increase, at a low price and selling shares, the prices of which fall, at the right time.

Investing all ones money in only one investment is very risky. For example, if you invest all your money in gold shares and the price suddenly falls, you might not be able to sell them for what you paid. When money is invested in a fixed deposit, the interest rate is fixed. You will not benefit if interest rates increase during your investment term.

Beacause of such risks, it is advisable to invest in more than one product to spread the risks. This can be very expensive. A possible solution lies in investing in unit trusts. This method of investing enables the ordinary investor to invest his money, along with other investors, in a variety of products, for example, shares. Unit trusts sometimes offer a higher return and a better balance because the return consits of dividends, interest and capital growth.

The calculation of returns on various savings methods

Interest is the price paid for the use of someone else’s money. Don’t confuse this with owners interest.

The percentage at which interest is calculated over a period of time is known as the interest rate.


Gather information on the interest rates of various savings methods at different banks and compare them by answering the following questions in the table.

1. Calculate the interest that a person would earn if he saved R5 000 over a period of one year.

2. Calculate the interest that a person would earn if he saved R5 000 over a period of 18 months.



Learning Outcomes(LOs)
LO 3
Management, Consumer and Financial Knowledge and SkillsThe learner will be able to demonstrate knowledge and the ability to apply responsibly a range of managerial, consumer and financial skills.
Assessment Standards(ASs)
We know this when the learner:
3.1 differentiates between financial concepts used in business (e.g. fixed assets, current assets, liabilities, owner’s equity);
3.2 develops leadership and management strategies that will ensure a return on investments;
3.3 completes source documents (e.g. receipts, deposit slips, cheques) and records elementary cash transactions in a statement of receipts and payments;
3.4 uses keyboard skills and function keys in developing, storing and retrieving basic information;
3.5 explains the concept and analyses a statement of net worth;
3.6 investments the various methods of savings and investments (e.g. savings accounts, fixed deposits, shares, unit trusts), and calculates on a variety of investments.



Questions & Answers

Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
sciencedirect big data base
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
characteristics of micro business
for teaching engĺish at school how nano technology help us
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
what is the actual application of fullerenes nowadays?
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
is Bucky paper clear?
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Do you know which machine is used to that process?
how to fabricate graphene ink ?
for screen printed electrodes ?
What is lattice structure?
s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
On having this app for quite a bit time, Haven't realised there's a chat room in it.
what is biological synthesis of nanoparticles
Sanket Reply
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic and management sciences grade 8. OpenStax CNX. Sep 11, 2009 Download for free at http://cnx.org/content/col11040/1.1
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