Publication
All About Interest
Objective
Students will be able to:
- Describe the factors that determine the cost of credit.
- Calculate finance charges, using different interest rates.
- Calculate APRs, given different finance charges and loan repayment periods.
- Analyze relationships among the finance charge, principal of the loan, APR, and loan repayment period.
Standard
Standard: 4
- Students will understand that: People can choose to invest some of their money in financial assets to achieve long-term financial goals, such as buying a house, funding future education, or securing retirement income. Investors receive a return on their investment in the form of income and/or growth in value of their investment over time. People can more easily achieve their financial goals by investing steadily over many years, reinvesting dividends, and capital gains to compound their returns. Investors have many choices of investments that differ in expected rates of return and risk. Riskier investments tend to earn higher long-run rates of return than lower-risk investments. Investors select investments that are consistent with their risk tolerance, and they diversify across a number of different investment choices to reduce investment risk.
Concepts
In this personal finance lesson, students will compare the costs of loans and credit options to learn about loan repayment.
Book Info
This lesson is part of Financial Fitness for Life 9-12, 3rd Edition and provides the slides and activities with educational technology tools. For full access to the book, shop the teacher guide and student workbook below.
Teacher Guide |
Student Workbook |
Available in eBook and hard copy |
Available in eBook and hard copy |
Description
Understanding finance charges and interest rates provides a foundation for students to compare the cost of different loans and credit options. In this lesson, the students learn how to compute finance charges, how to differentiate between add-on and annual percentage rates, and how the annual percentage rate and loan repayment period affect the cost of a loan.