LWEO

chapter 3

chapter 3

Saving and borrowing

Saving and borrowing are examples of an exchange over time. Exchange over time means that you shift the moment in time when you spend your money. When you save, you shift the moment of spending your money to the future, and when you borrow, you shift the moment of spending your (future) money to the present. Both saving and borrowing usually involve the payment of a certain interest rate, interest which savers receive and which borrowers must pay.
In the subject of economics, you regularly come across calculations that are made with percentages. In this chapter a number of the most frequently used percentage calculations are described.
When you borrow money, this must be paid back in the future in the form of repayments. In addition, you must pay interest on the part of the loan that you have not repaid yet. As a result, you have less money available for other expenses in the future. When it receives an application for a loan, the bank or another credit provider will always inspect your financial situation carefully, in order to make the risk of the lender not being able to make repayments or interest payments in the future as small as possible. There are different kinds of loans which all come with different characteristics and conditions.

links
Loans in all kinds of forms (www.nibud.nl)
Borrowing money (www.watislenen.nl)
Calculating the effective mortgage loan interest from the nominal mortgage loan interest
(www.hypotheek-abc.nl)
Calculate with percentages (www.beterrekenen.nl)

glossary

Glossary chapter 3


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extra exercises

Extra exercises (Word)