The value of money received at different points in time, give a certain interest rate; present value vs. future value.
The difference between simple interest and compound interest; why compound interest grows so quickly compared to simple interest.
How to develop the formulas behind simple and compound interest, and an example of the striking difference between the two.
How to decide whether it is better to have a sum of money today or in the future.
How to calculate the present value of different amounts of money received at different points in time.
What happens to the present value of money when you change the discount rate or interest rate?
What compound interest is, how it works, and the math behind it.
How and why the Rule of 72 is an easy way to estimate the impact of compound interest.
How and why interest compounds over various time periods with a more detailed examination of the math behind the process.
An explanation of how income is taxed at various income tax rates and how a marginal tax rate affects a taxpayer.
What a tax deduction is, common misconceptions, and the difference between a deduction and a tax credit.
How the Alternative Minimum Tax works in general and why it’s in the tax code at all.
What an estate tax is and how it is calculated.
How tax brackets work for higher levels of income on an incremental basis.
How the standard deduction and personal exemptions impact a person’s federal taxable income.
How to calculated take-home pay after deducting state income tax.
Stock ownership defined and how the price of a company’s stock is determined.
What a bond is and why an investor might what to buy one.
How bond prices change and interact with interest rate fluctuations. Learn why interest rates go down when bond prices go up.
Why bond prices and interest rates move in opposite directions.
The difference between a stock (ownership of a company) and a bond (lending to a company) with an emphasis on what a bond is and how it works.
What a mutual fund is and how it’s created.
How mutual fund shares are purchased, how they are redeemed, and how their prices (net asset value) is influenced.
What an exchange traded fund is, and how it’s both different and similar to a mutual fund.
Inflation defined and how it’s calculated.
What the consumer price index is and how it’s determined.
Why good economies tend to generate a reasonable amount of inflation.
What a Ponzi Scheme is, how it works, and an example from Bernie Madoff.
How to calculate the effective APR from a stated APR, and the difference between the two.
How to make an informed comparison between the costs of renting a home and buying a home.
Different types of mortgages explained (fixed rate, adjustable rate, etc.) along with the relationship of principal and interest in a standard mortgage payment.
How to use equity in a home to create cash via a home equity loan.
The basics of the Federal Funds rate and the discount rate from the Federal Reserve Bank.
How personal bankruptcy works, the differences between Chapter 7 (straight bankruptcy) and Chapter 13 (reorganization) and their consequences.
How payday loans work and the very high price borrowers pay who use these loans.
The definition of assets, liabilities and net worth (equity) on a personal balance sheet.
What a traditional IRA is, how it works, its features and benefits.
What a Roth IRA is, how it works, its features, its benefits, and how it differs from a Traditional IRA.
What a 401(k) is, how it works, and how it compares to a Traditional IRA.
Term life and whole life insurance defined and the difference between the two.
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