Got a tricky question? Receive an answer from students like you! Try us!

Finance: Savings, Borrowing and Investment - Essay Example

Only on StudentShare
Author : soberbrunner


Savings, Borrowing and Investment Table of Contents Table of Contents 2 Introduction 4 Savings 4 Definition 4 Explanation 4 Principles of savings 4 Example 5 Evaluation 6 Borrowing 6 Definition 6 Explanation 6 Principles of Borrowing 7 Example 7 Evaluation 8 Investment 8 Definition 8 Explanation 8 Principles of Investment 8 Example 9 Evaluation 10 References 11 Introduction The project deals with outlining the principles related to savings, borrowing and investment which should be considered and followed by “True Love Endures” to continue its operations and achieve success in the industry…

Extract of sample
Finance: Savings, Borrowing and Investment

Explanation It is the amount which is left after meeting up all the personal expenses. In case of those individuals who are financially stable, they have an amount of money left after spending for personal expenses. Thus their savings is positive. For those individuals who generally depend on taking credits and loans to meet up all the needs and requirements, their savings figure is negative. Savings can be turned into increased income for an individual by the investment of the saved amount of money. Principles of savings Every individual should save a certain amount of their money for the uncertain tough times in future. There are various ways of utilizing the savings to have an increased income. Compounding is the most attractive among them. The method of investing the savings and getting the interest, calculated on the basis of compounding technique, is highly profitable. However the savings should be utilized in such a manner that it gives high return but involves minimum amount of risk. ...
Download paper

Related Essays

The Market for Borrowing Corporate Bonds
An efficient corporate bond market will lead to the efficient allocation of investment funds. An efficient market will also lead to investments in riskier assets. The types of securities which can be issued in the corporate bond market are debentures, unsecured notes and subordinated debt. One of the major reasons for developing a corporate bond markets is that the bond market provide an alternative solution or source for operational funds for the private sector other than borrowing from the equity markets and banks. This helps in improving the financial stability and allocation of credit. …
8 pages (2008 words)
Investment in single company shares and gilts
From the point of view of economics, the act of investment is related to saving or deferring consumption today for the purpose of a better or higher return tomorrow. Interest is the price paid to the investor for waiting or deferring consumption. As consumers, we may invest for a number of reasons. We may invest in a house because we want the comfort of a shelter and a place to hold our belongings, a car to drive us to work, or a beach house to spend the holidays. Investments are also made in financial instruments that have value such as shares, bonds and pension plans. The idea is that the…
12 pages (3012 words)
Enterprise Finance Coursework
The disadvantages are: …
8 pages (2008 words)
Personal finance: Life cycle aproach
However, understanding customers’ habit may be challenging since auxiliary issues adjusts such patterns. Therefore, this script examines the life cycle approach and its usefulness when understanding consumer patterns. Furthermore, it deduces the lessons arising from such patterns. Life cycle approach centers on personal spending and savings in an individual’s livelihood. Customers present dynamic habits influenced by the preferences at each level of life. Normally, personal finances are low at young age; however, they increase with career’s achievement and drop with retirement. Although…
3 pages (753 words)
corporate finance and related ethical issues
This means developing a capital structure which would assist in deriving maximum value. When a project is financed, the debt of the firm results in a liability, which can be also termed as an obligation. However, equity financing is considered to be less risky because the commitments related to cash flow is respected, but this results in the dilution of the earning, control and share ownership. Moreover, as it is already known the cost of equity is higher than the cost of debt. This implies that equity financing can double the hurdle rate. This study is also based on such concepts of funding…
6 pages (1506 words)
investment project- Finance
Making a portfolio always give something extra ordinary to the investor and investors always like to have making a portfolio, as it not only increase its return but it also decrease the risk association from the same. Passive Investment strategy would be taken into account for the same. Passive investment can also be stated as passive management. It is a financial approach which refers to get hold on active selling and purchase dealings in short term profitability scenarios while having an intension to make investment in secure long term profitability with a minimum usage of resources (John L.…
5 pages (1255 words)
Finance and Investment assignemnt 1
FV W/ Cont. Compounding =PV*e^rt Where: PV= Present Value R= Rate T= Time (i) Annually FV= $ 1,000*e^(.45)(1) $ 1,046.00 (ii) 6 monthly FV= $ 1,000*e^(.45/2)(1*2) $1,046.00 (iii) Quarterly FV= $ 1,000*e^(.45/4)(1*4) $1,046.00 (iv) Monthly FV= $ 1,000*e^(.45/12)(1*12) $1,046.00 (v) Daily FV= $ 1,000*e^(.45/365)(1*365) $1,046.00 (vi) Hourly FV= $ 1,000*e^(.45/8760)(1*8760) $1,046 (c) Effective interest rate tries to determine the entire cost of borrowing. It accounts for the effect compounding interest which is excluded from the stated or nominal interest rate.
4 pages (1004 words)