Compound Interest and the rule of 72

Well today in class we learned about compound interest. Although it is some what confusing to me,basically it is the amount of money you make over the years depending on the amount of interest a company makes. Over the years your deposit increases with the interest itself. Like for example, if you initially deposit $100 and the interest rate of the company is 10%, in a year then your money will increase to $100(1+ .02) (1+ .02) (1+ .02) (1+ .02) (1+ .02)= $108.24 in the next year. So each year your money will increase with the annual percentage rate.

Insider Trading Scandal - What Happened?

Well,there was a large Insider Trading network that broken up on Wall Street on March 1st.The 13 people who was charged with the trading schemes included employees at major Wall Street banks,a UBS Securities executive,Bank of America Securities representative, and a former Morgan Stanley attorney.The prosecutors said that the people are accused of security fraud, wire fraud, bribery, selling information about upcoming analyst upgrades and downgrades, giving out information about mergers and acquisitions.allocated shares of initial public offerings and secondary offerings to a hedge fund, Q Capital, for cash kickbacks.So far the prosecutors said that all 13 people had been arrested, and four had pleaded guilty.

Dow down 416 points-Why?

The Dow Jones went down because of a computer glitch which triggered the sudden plunge in the industrial average at mid-afternoon Tuesday, turning an already bad day in stocks into a head-turning spectacle. Dow Jones & Co., the media company that manages the well-known index of 30 blue chip stocks, said it discovered shortly before 2 p.m. that its computers weren't properly handling the day's huge volume in trades at the New York Stock Exchange.It switched to a backup computer, and the result was a massive swoon in the index as the secondary system took over processing shortly before 3 p.m.The Dow plunged about 200 points almost instantly, and was down as much as 546 points _ its worst single-session decline in more than five years, and one that sent the blue chips into negative territory for the year.It didn't really compare to the other declines such as the Great Depression and 9/11 because it wasn't that serious. I don't know if or how it really affected my stocks but since the prices went down I might go buy some more stocks!.

Opportunity Costs

Well,I think what economists mean when they talk about opportunity costs is that they or anyone will have to make a decision and will have an effect from that decision either a good one or a bad one. For example,earlier this week I had went to sleep at about one o'clock doing probably nothing because I couldn't go to sleep. Instead of me going to sleep at my regular time,I had an opportunity cost which was being very tired the next day in school. So believe me,I will never do that again for no reason,unless I have homework of course.

Types of Economics Systems

A traditional economy is an economic system in which resources are allocated by inheritance, and which has a strong social network and is based on primitive methods and tools. It is strongly connected to subsistence farming. In the majority of countries traditional economy has been replaced by command economy, market economy or mixed economy. However, it is found today mainly in underdeveloped, agricultural parts of South America, Asia, and Africa.

A centrally planned economy is an economic system in which the state or government controls the factors of production and makes all decisions about their use and about the distribution of income. In such an economy, the planners decide what should be produced and direct enterprises to produce those goods. Planned economies are in contrast to unplanned economies, i.e. a market economy, where production, distribution, and pricing decisions are made by the private owners of the factors of production based upon their own interests rather than upon furthering some overarching macroeconomic plan.

A market economy is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system rather than by the state in a planned economy. In a market economy businesses and consumers decide what they will produce and purchase, as opposed to a planned economy where the government decides what is to be produced and in what quantities.

A mixed economy is an economy that has a mix of economic systems. It is usually defined as an economy that contains both private-owned and state-owned enterprises or that combines elements of capitalism and socialism, or a mix of market economy and command economy.There is not one single definition for a mixed economy, but relevant aspects include; a degree of private economic freedom, including privately owned industry, intermingled with centralized economic planning, which includes intervention for environmentalism and social welfare, or state ownership of some of means of production.

The difference between communism and socialism is that communism is a political, social, and economic system in which the state, governed by an elite party, controls production, labor, and distribution, and, largely, the social and cultural life and thought of the people, and socialism is a political movement advocating or associated with a theory or system of social organization by which the major means of production and distribution are owned, managed, or controlled by the government (state socialism), by associations of workers (guild socialism), or by the community as a whole.

Stock Market Game-1-Initial Investment Strategy

The stocks that I am considering is the really big companies like apple or mcdonald's or nike. I guess I will by a lot like 15 or something. I don't really know because I haven't ever bought a stock or had anything to do with stocks so it's just all new to me and I don't even know really where to start. I think I'm going to be risky and conservative because like I said I'm new to this . But other than that, I'm just going to try to get as much money as possible so I could beat Mr.Moloney and get a 100 for my grade!.