Business Fundamentals | Functions of a Business | Entrepreneurship | Finance | Summative Project

Overview | Currency & Income | Saving | Investing | Credit



Finance Outline


  • What are the different ways of getting paid? (salary, wage, commission, etc…)
  • What are the basic pay deductions? (E.I., C.P.P., etc...)
  • What jobs lead to higher income?
  • What do you get from employment other than a paycheque?


  • What expenditures does an average household have?
  • What factors do people consider when spending money? (Price vs. Quality, features, etc…)
  • What are the different types of stores people shop in?


  • What are the reasons and benefits of saving money?
  • How do you calculate interest earned?
  • Describe some of the various bank accounts available to teenagers from some of the major Canadian banks


  • Explain various types of risky and safe investments
  • Acronyms…what do they mean? (GICs, RRSP, RESP, …)
  • How does the stock market work?
  • What are mutual funds?
  • Where should I invest?


  • What are the different ways of borrowing money?
  • How do credit cards work?
  • What are the good and bad things about having credit?
  • Learn how to calculate the cost of credit (interest)

Currency & Income

What is money?
Benefits & Deductions
Benefits & Deductions (blank)


  • Once barter ruled, but it has limitations. Money is a legal tender – that is accepted as payment for goods or services. There are two types of legal tender – coin and bank notes
    • Coins are used because they’re more durable than notes (notes tend to exist for 2-3 years in circulation, coins can be indefinite).
    • Notes have the additional problem of counterfeiting. To remedy that there are security measures.
  • In the end, notes are a more effective way of paying for goods/services with, say, beaver hides.


  • People typically have revenues from up to three sources:
    • Allowance
    • Investment
    • Salary/Wage
  • Allowance is a stipend - usually associated with minors.
  • Investment income (capital gains, interest, dividends) is affected by the amount invested.
  • Factors that influence the level of wage or salaries you can expect to receive
    • Level of education and training
    • Level of supply and demand for the job (Doctor, “Garbage Man”)
    • Quality of your personal performance (work habits, results, etc..)
    • Success of the business
    • Years of experience
    • The state of the economy (out of your control)
    • Success of labour negotiations (if in a union)
  • When you work as an employee you may receive a number of other benefits from your employer. A “Benefit Package” can include some of the following:
    • Paid vacation days AND holidays
    • Paid sick days
    • Extended health care (dental, medical, eye care, etc…)
    • Life – disability insurance
    • Pension plans (company, CPP)
    • Parental leave
    • Stock options / bonuses
    • Employee discounts
    • Employers health tax (OHIP)
  • Common Payroll Deductions
    • INCOME TAX -
      • The more you make the higher the percentage you pay
      • Goes to gov’t expenditures (education, health care, welfare, transportation, etc…)
      • Fixed amount off cheque used to cover those currently on EI
      • And…in the event you need EI
      • An amount the gov’t takes and puts towards your retirement
      • Receive at age 65
      • Only if you are IN a union
      • $$$ goes towards union costs (salaries, meetings, etc…)


3. Spending Worksheet.doc
4. Saving Worksheet.doc

Assignment #15

5. Comparing Bank Accounts.doc


Where Should I Invest?
How the Stock Market Works

6. Investing Worksheet.doc
7. Investment Exercise.doc

Assignment # 16 - Investopedia Stock Market Mogul

8. Investopedia activity - I need an email address to invite you to a private investment game hosted by Investopedia. You have 2 weeks and 2 days to make as much money as you can. You will be marked as follows:

Weight (%)
Account activity
Final worth

Savings and Investing

Consumers can use any money left over from purchasing goods and services toward savings or investing. Saving means putting money aside for future use. Investing is using savings to earn extra income. For most consumers, it is a good idea to combine both savings and investing in their financial plan.

The Need for a Savings Plan

A savings plan ensures that a certain amount of money is put aside on a regular basis to reach a financial goal.

Why People Save

People save for many reasons including emergency needs, short- and long-term goals, and security and future needs. Benefits of Savings Plans - Plans offered by financial institutions can offer
  • interest,
  • safety,
  • and insure against loss.

Earnings and Yield

When money is deposited into an account at a financial institution, it is being lent to the institution so that it can also be lent to other borrowers.
Interest is paid to the account holder for the use of the money. Interest is also paid by the person borrowing the money. Rate of return is interest expressed as a percent of the original investment. It is also called yield. ($1000 x .05 = $50)


Established in 1967, the Canadian Deposit Insurance Corporation (CDIC), an agency of the federal government, protects depositor’s funds to a maximum of $100 000.


Liquidity is the ability to convert an asset or investment into cash quickly and easily. There is a wide range of savings plans available to individuals from different institutions.

Savings Accounts

Savings accounts are the safest way to save and earn some interest or return on your money. Interest rates and calculation methods vary from one institution to the next, and fluctuate with economic conditions.

Term Deposits and Guaranteed Investment Certificates

Term deposits and guaranteed investment certificates

(GICs) are savings plans in which a fixed sum of money is deposited over a specific length to time.

Registered Retirement Savings Plans

In 1957, the federal government introduced registered retirement savings plans (RRSPs) to encourage people to save for retirement.

Registered Education Savings Plans

Registered education savings plan (RESP) is a long term savings plan to help finance a child’s education. Income earned is tax-free until the child attends an approved post- secondary school full time. The amount is limited to $42 000 (new legislation $50 000). The Canadian Education Savings Grant (CESG) is up to $400 per child per year.


Such as government or corporate bonds, stocks or mutual funds, real estate, and collectibles, have different levels of risk. Lower yields are associated with “safer” investments. Higher yields are associated with riskier investments. When someone diversifies their investment, they spread their investments across several types.

  1. Canada Savings Bond - A Canada Savings Bond (CSB) is a loan made by an individual to the government of Canada. On the maturity date, the government will repay the principal plus interest.
  2. Corporate Bonds - Businesses sometimes need money to increase production, expand operations, or introduce new products. Businesses sell securities— corporate bonds and shares of stock—to raise the necessary funds.A bond is a promise to repay borrowed money on a certain future date along with interest.
  3. Stocks - When an individual buys stocks, they become part owner or a shareholder in the company. Shareholders share the risks and rewards of the company. A bull market occurs when the demand and price for most stocks is high. When demand and price for most stocks is low, it is a bear market. Common Stock - Common stock represents general ownership in a corporation, carries voting privileges, and includes a right to share in its profits. However, there are no fixed dividend rates. Common stock is always liquid—it can be bought or sold at any time on the open market. Preferred Stock -preferred stock has advantages over common stock due to the payment of fixed rate dividends. Shareholders have no voting privileges, and stock prices tend to be more stable. This type of stock is also liquid. Blue chip companies such as Weston and Imperial Oil are characterized by a long record of regular dividend payments, stable growth, and active trading.
  4. Mutual Funds - Mutual funds are pools of money from many investors that are set up and managed by an investment company to buy and sell securities from other corporations.
  5. Real Estate - Real estate is land and anything attached to it. Besides buying a home as a form of investment in real estate, some people buy income property.
  6. Collectibles Collectibles are items of personal interest to a collector. A collectible may increase in value over time due to the scarcity of the item or the demand in the market.


10. Credit Worksheet.doc

Assignment #17 - Cost of Credit

12. Cost of Credit assignment

*special thanks to R. Edmondson for use of various course materials from the YRDSB