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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
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Page: 13 of 23
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Topic:
Yet Another Bank
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- A purchase is made with a check written on Bob's State Bank, which is deposited in Charley's Credit Union.
- Charley's Credit Union adds $81 worth of liabilities to the store's account.
- This liability is balanced with reserves transferred from Bob's Bank.
- Bob's Bank losses $81 and Charley's Credit Union gains $81 of reserves.
- Bob's Bank ends up with $9 of reserves and an $81 loan.
- Charley's Credit Union has $81 in reserves. It keeps 10% ($8.10), giving it $71.90 of excess reserves.
- Charley's Credit Union makes a $71.90 loan to a customer.
- This creates $71.90 of money. The three banks have created $242.90 worth of money.
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SAVINGS AND LOAN ASSOCIATIONS Depository financial institutions that were originally established to assist home owners with low-cost mortgage loans using savings deposits. Savings and loan associations (S&Ls) offer checkable deposits that are part of the M1 monetary aggregate. While S&Ls are not "officially" chartered as banks, similar to other thrift institutions (credit unions and mutual savings banks) they do function comparable to any traditional bank, offering a wide range of deposits, loans, and other financial services.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store trying to buy either an AC adapter that works with your MPG player or rechargeable batteries. Be on the lookout for letters from the Internal Revenue Service.
Your Complete Scope
This isn't me! What am I?
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Natural gas has no odor. The smell is added artificially so that leaks can be detected.
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"Be kind and merciful. Let no one ever come to you without coming away better and happier." -- Mother Teresa of Calcutta, humanitarian
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AFEA
American Farm Economic Association
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