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ANNUITY: The receipt of payments at regular intervals from a established fund. Annuities are commonly used for insurance and retirement programs. It works in this way: A fund, which can be established either through a one-time sum of money or a series of payments, is exhausted over time with fixed, periodic payments. The amount of each payment depends on the interest accrued on the outstanding balance in the fund, and the length of time scheduled to exhaust the fund. For example, if your pension plan is based on an annuity that begins payments at the age of 65, then the size of the payments depends on whether you expect to live 5, 10, 15, or more years and set up payments accordingly. It's very similar to amortization, but in the reverse direction.

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Lesson 19: Money Creation | Unit 3: Modern Banking Page: 14 of 23

Topic: Total Creation <=PAGE BACK | PAGE NEXT=>

The amount of checkable deposits created is a multiple of the amount of excess reserves of the banking system.
  • When banks makes loans, they create deposits, and create money.
When does the process stop?
  • Banks will create $900 of deposits, which added to the original $100 deposit, gives $1,000 of deposits that did not previously exist.
Why?
  • The $100 in reserves added to the first bank are used to back, in total, $1,000 of deposits.
  • If banks keep 10% of deposits in reserve, then every $1 of new reserves can be used to back $10 of new deposits.
  • This is the result of banks practicing fractional-reserve banking.

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EXPLOITATION

The notion that capital owners and entrepreneurs of the second estate "take advantage" of workers of the third estate by paying them less than their contributions to production.

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Today, you are likely to spend a great deal of time at a crowded estate auction wanting to buy either a flower arrangement with daisies and carnations for your uncle or a coffee cup commemorating next Thursday. Be on the lookout for high interest rates.
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General Electric is the only stock from the original 1896 Dow Jones Industrial Average remaining in the current index.
"Now is the only time there is. Make your now wow, your minutes miracles, and your days pay. Your life will have been magnificently lived and invested, and when you die you will have made a difference."

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