MBF3C FOUNDATIONS FOR COLLEGE MATHEMATICS

Profile Section 3: Choosing Financial Services

In this section, you will be deciding which financial institution you would like to go with once
you are starting your career. Throughout your time as a student, you have had no fees when it
comes to your banking but now you are going to decide what bank, accounts, cards, and/or
investments you are going to have in your profile. You will only be required to research one
bank, but in reality you would probably do a comparison amongst many banks to make your
decision.
Part 1: Selecting a Financial Institution
Select a financial institution that is established in Canada to analyze. The following are a few
popular financial institutions in Ontario:
CIBC
TD Bank
BMO
Scotiabank
RBC
HSBC
National Bank
Desjardins
Once you have decided on a bank to analyze, answer the following questions in order to learn
more about that bank.
1. What are the differences between their chequing and savings accounts:
Chequing
Savings

2. Which account charges the most for additional transactions?

3. Name some additional fees that occur on some of the accounts.

4. What are the interest rates for the various savings accounts?

5. After comparing the different accounts, which one do you think would be best for you
and why?

MBF3C FOUNDATIONS FOR COLLEGE MATHEMATICS

Part 2: Investments
1. Determine how interest is accumulated by that specific bank.
n
n
a) Write the formula for their interest in the form: A=P ( 1+i ) FV =PV (1+i )

2. What various types of investment opportunities are there and what are their interest rates?

3. What does GIC stand for?

4. What risk factors are indicated by the name of this investment?

5. What can you purchase a GIC?

6. Look at all the different types of GICs. Research and decide on which GIC is the best
option for you. Make sure you are taking into account your potential income, savings,
interest rates, expenses, taxes, etc.

MBF3C FOUNDATIONS FOR COLLEGE MATHEMATICS

7. In general, what is the advantage of having an investment locked in for a longer term?

8. What is the difference between stocks and bonds?

9. Use the internet to look up current prices for any three stocks. For example you could use
Air Canada, The Hudonss Bay, and Apple.
a)
b)
c)

10. If you had 500 shares in each of the previous companies, how much would your
investments be worth?
a)

b)

c)
11. a) Choose one of your stocks. If that stock depreciated by 22%, how much would it be
worth?

b) How much money would you have lost?

MBF3C FOUNDATIONS FOR COLLEGE MATHEMATICS

c) Would you want to sell them now? What factors would you consider?

MBF3C FOUNDATIONS FOR COLLEGE MATHEMATICS

Part 3: Graph Analysis

You have just won a grade prize of $5000! After careful consideration, you have decided to
invest the full amount into one of the investment choices you explored in the part 2. Using the
interest rates for each of your investments, you will explore which of the investment type will
leave you with the greatest investment of your $5000.
Use excel and its graphing software to display both investment graphs onto one single graph.
Compare the interests and decide which investment type will leave you with the greatest amount
of money in 5 years. What type of growth is displayed for each investment type?
Simple Example:
https://www.cibc.com/ca/rates/tfsa-rates.html
5 years = 60 months
CIBC Long Term GIC (Exponential Growth
but appears Linear due to small increases)
Year 1 5 1.5% interest

CIBC Escalating Rate GIC (5 Year)

(Exponential Growth)
Year 1 0.750%
Year 2 1.000%
Year 3 1.200%
Year 4 1.700%
Year 5 3.000 %

MBF3C FOUNDATIONS FOR COLLEGE MATHEMATICS

Part 4: Credit Cards

Now you will decide upon a credit card depending on what you want to get out of your credit
card. Credit Cards are associated with financial institutions like the one youve chose. Popular
ones are Visa and Mastercard and they vary depending on which financial institution youve
chosen. Credit cards also are sometimes affiliated with different organizations that allow you to
accumulate points or cash back for example. Consider the following questions in order to make
your decision.
Card Types:
1. What are the various types of credit cards and their interest rates?

2. Which cards have annual fees?

Billing:
1. Research the type of interest charged in the following scenarios:
a) If a payment is made in full by the billing date

b) If the entire payment is not paid off my the due date

2. Would you find having a card with no annual fees but a high interest rate beneficial and
why? If no, what type of person would find this beneficial and why?

3. Would you find a low interest credit card beneficial even if it had other fees? Why or why
not?