Jazyk:

FINANCIAL MATHEMATICS

Term deposit

When you know you will not need money for a long time, you can deposit it once on a term deposit.

You leave the agreed amount in the bank for the agreed period.

Interest is only around 1%.

The calculation of interest can be using simple interest – annually bears interest only on the amount deposited,

or using the more frequently used compound interest – annually bears interest from the situation from the previous year.

Simple interest

Kn = K0*( 1+i*n)

Compound interest

Kn = K0*( 1+i)n

K0 = deposit,

Kn = account balance after n years

n = year

i = interest rate pa

 

Saving

If you have some extra money a month, you can save it for savings.

This means that you deposit, for example, CZK 600 into your account every month.

Classic savings – the most frequently used, the least risky, you can withdraw money from it at any time.

Interest only around 0.01%.

Saving in funds – it is riskier (so you can lose some percentage).

Interest even 10-20 % per annum – if you’re lucky.

However, you cannot withdraw money from them free of charge. Your money is worth your interest every month.

 

Credit

A credit is a loan from a bank.

Consumer credit – most often it is for a smaller amount that you can use for anything, but you pay much higher interest.

Mortgage, resp. a home loan – is also a loan, but for a larger amount that you have to use to buy an apartment, house or its construction.

The interest rates are significantly lower than with a consumer loan and you usually repay it for more than 20 years.

Interest rate

The amount saved after … years