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Social StudiesThe use of metal formoney can be tracedback over 4,000 years.The first coins were madeof electrum—a naturalmixture of gold and silver.They were crude lumps ofmetal bearing a primitivemark that certified itsweight or fineness. Beads,shells, and even leatherwere also used to createmoney.Research ActivityFind out what mostUnited States coinsare made of today.per year, to the dealer in monthly installments over a two-yearperiod. To get the money immediately, Laura’s Used-CarExchange negotiated the note to the Ace Finance Company,which accepted it for a small service charge. Now Keith will haveto make monthly payments to the holder of the note—the AceFinance Company.Certificates of DepositA certificate of deposit (CD) is a note provided by a bank. A CDis a bank’s written receipt of money and its promise to pay the moneyback, usually with interest, on the due date (see Figure 23.2). CDs arewritten for a specific time period, such as six months, one year, twoyears, or five years. Banks pay higher interest for longer-term CDs. Theinterest paid on a CD is higher than the amount paid on a regular savingsor checking account because the depositor cannot withdraw the moneybefore the due date without penalty. In certain circumstances, peoplewho have certificates of deposit can obtain money by negotiating the certificatesto other people or by pledging them as security for a loan.DraftsIn contrast to a note, which is a promise to pay money, a draft isan order to pay money. Drafts are more complicated than notes becausethey involve three parties instead of two. Also called a bill of exchange,CERTIFICATE OFDEPOSITA certificate of deposit isbasically a promissorynote issued by a bank.Why do people buy CDs?Figure 23.2CSB Columbia Savings BankCERTIFICATE OF DEPOSIT1200 North StreetColumbia, South Carolina Date: July 1, 20 --This acknowledges that there has been deposited with the1,000.00one thousand and 00/100------------------------------------------------Alana Donley1st Julyundersigned, the sum of $which is payable to the order ofDollarson theday of , 20 , upon presentation andsurrender of this certificate, and bears interest at the rate of4%per annum calculated and credited at maturity. No payment may bemade prior to, and no interest runs after, that date.COLUMBIA SAVINGS BANKByVice President508 Unit 5: Using Your Purchasing Power