Are the following statements true or false? The difference between savings and investments is that savings is money set aside for short term for purchases that will be made in the near future. Investments is putting money aside into long-term financial instruments/investments that will cause the value to grow.

Question

Jacquelyn

Business

1 May, 14:03

Are the following statements true or false? The difference between savings and investments is that savings is money set aside for short term for purchases that will be made in the near future. Investments is putting money aside into long-term financial instruments/investments that will cause the value to grow.

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Answers (1)

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Lailah Cooley · Answer 1

That statement is true.

Explanation:

Basically, You put your money in saving if you intended to use that money for future consumption. You put your money in investment if you intended to make financial gain out of it.

For example,

Let's say that you want to buy a laptop that cost $700. You only able to spend $350 per month since you have to consider other more important payment such as rent or food. So you set aside $350 for two month and purchase the laptop at the end of the second month. This is an example of saving.

In another case let's say that you put that $350 in Bonds rather than purchasing laptop. You Let that bond mature and take a 3% interest as profit. Two month later, the value of your money is increased. This is an example of an investment.