7/31/2019 Lesson7 Understanding Interest

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Understanding Interest

ObjectiveStudents will be able to identify what interest is.

Students will be able to explain how banks can give people

interest on their money.

Students will be able to identify approximately how long

compound interest takes to double a sum.

Jump$tart Knowledge Statements(4th & 8th Grade Levels)

Peoplecanearnincomefromrentandinterest.

Banks,savingsandloanassociations,andcreditunionsareplacespeople

can invest money and earn interest.

Compoundinterestismoneyearnedonbothprincipalandpreviously

earned interest.

TheRuleof72isatoolforestimatingthetimeorrateofreturnrequiredto

doubleasumofmoney.

Materials & Set-Up Writing utensil Warm-up sheet

Chart Paper/Marker

Storyboard Template

Markers

Group 1 and Group 2 Directions for Storyboard Activity

Directions: The following lesson plan may be used by parents, volunteers,

or professional educators to supplement or substitute the skills introduced,

assessed, and applied in the fourth segmented portion of MoneyIsland.

Jump$tart Standards(4th & 8th Grade Levels)

Financial Responsibility & Decision Making

Standard 1: Take responsibility for nancial decisions

Identifywaystobeananciallyresponsibleyoung

adult

Standard 4: Make nancial decisions by systematically

considering alternatives and consequences

Evaluatetheresultsofanancialdecision

Income and Careers

Standard 2: Identify sources of personal income

Denegift,rent,interest,dividend,capitalgain,tip,

commission,andbusinessprotincome

Saving and Investing

Standard 1: Discuss how saving contributes to nancial

well-being

Giveexamplesofhowsavingmoneycanimprove

nancialwell-being

Standard 2: Explain how investing builds wealth andhelps meet nancial goals

Denethetimevalueofmoneyandexplainhow

smallamountsofmoneyinvestedregularlyover

time grow exponentially

UsetheRuleof72toestimatethetimeorinterest

rateneededtodoubleanamountofmoney

Game Screenshot: Sherman explains how money earns interest

in a savings account.

Procedure

Warm-UpOff-Line:Givestudentsawarm-upsheetwiththefollowing

T-chartanddirectionsonit.HavestudentsllouttheT-chart.

Benets ofMattress Saving

Disadvantages ofMattress Saving

Teacher Lesson Plan

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Directions -Manyyearsago,somepeoplewereafraidofwhatmighthappentotheirsavingsanddidnottrusttheirmoneywithanyone.Ifthesepeoplesavedmoney,theyworriedthatsomethingwouldhappentoit,sotheykepttheir

moneyinthemattresswheretheyslept.IntheT-chartabove,writesomeideasaboutwhatwasgoodaboutmattress

saving and what was not so good about it.

Guiding Questions

Was the money that the people kept in the mattress safe?

Did the people saving the money feel that their money was safe in the mattress?

Did the people who stored their money in their mattress earn any interest?

Did the people who put their money in their mattress have anyone else to help them with their fnances?

Discusswhatstudentswroteasbenetsanddisadvantagesofmattresssavingandrecordtheirideasasaclassona

classT-chart.Havestudentskeeptheirwarm-upsheetsforthewrap-up.

PresentationMoneyIsland.com: Ifavailabletothem,yourstudentsshouldnextplayMoneyIslandandcompletethequesttoBig

BenwherethecharacterShermanHolmeswillteachthemaboutearninginterestinabankorcreditunionaccount,

compoundinterest,andhowlongittakestodoubleasumwithcompoundinterestthroughapresentationofcluesat

BigBen.

Off-Line:YoumayvieworpresentthevideoonCompoundInterestthatappearsinMoneyIslandwithyourstudents

bygoingtoVideosintheMoreFun&GamessectionofyourMoneyIslandsite,thenclickingonAnInteresting

Adventure.

AssessmentOff-Line:Dividestudentsintotwogroups.LabelonegroupWhereInterestComesFrom.LabeltheothergroupHowInterestGrows.Giveeachstudentinbothgroupsastoryboardliketheonebelow.

Giveeachgrouptheirassessmentdirectionssheet/guidingpoints,writingutensils,andmarkers.Thedirectionsfor

eachgrouparebelow.Readthedirectionswitheachgroupandhavethembegin.

Group 1: Where Interest Comes From

Directions -Youaregoingtocreateastoryboardthatdescribeswhereinterestcomesfrom.Astoryboardislikea

comicbook.Ittellsastoryusingpicturesandtext.Ineachbox,youwilldrawapictureofsomethingfromyourtopic.

Beloweachbox,youwilldescribewhatishappeninginyourtopic.

Inyourstoryboard,makesuretoincludethefollowingtopics:

Showpeoplegivingmoneytoabank.

Showhowbanksusepeoplesmoneytomakemoney.

Showhowbankssharethemoneythebankhasearnedwithpeopleintheformofinterest.

Dontworryifyourpicturesarenotperfect.StickguresareOK.Dontworryifyoudontuseeveryboxonyour

storyboard.ItsOKifyouneedanextrasheetforyourstoryboard.Ifyouhavetimeaftercreatingstoryboard,color

your storyboard until time is up.

Group 2: How Interest Grows

Directions - Youaregoingtocreateastoryboardthatdescribeshowinterestgrows.Astoryboardislikeacomic

book.Ittellsastoryusingpicturesandtext.Ineachbox,youwilldrawapictureofsomethingfromyourtopic.Below

eachbox,youwilldescribewhatishappeninginyourtopic.

Teacher Lesson Plan

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Inyourstoryboard,makesuretoincludethefollowingtopics:Showpeoplegivingmoneytoabank.

Showhow$100atthebeginningoftheyearbecomes$110frominterest.

Showhow$110attheendoftherstyearbecomes$121attheendofthesecondyear.

Showhowattheendofthe7thyear,therewillbe$200,doubleofwhatyoustartedwith.

Dontworryifyourpicturesarenotperfect.StickguresareOK.Dont

worryifyoudontuseeveryboxonyourstoryboard.ItsOKifyou

needanextrasheetforyourstoryboard.Ifyouhavetimeaftercreating

storyboard,coloryourstoryboarduntiltimeisup.

Whenthestoryboardsarecomplete,chooseoneortwostudentswhodid

wellwiththeactivityfromeachgrouptopresenttheirstoryboards.Attheendofeachpresentation,summarizehoweachstudentusedtheguiding

topics included in the directions.

MoneyIsland.com: IntheMoneyIslandonlineworld,yourstudent(s)will

answer8-12interactivequestionstestinghisorherunderstandingofthe

nancialcontent.Theirscoresareavailabletoyouthroughyourparent/

teacher login.

ApplicationOff-Line: Splitstudentsintogroupssothattherearethreestudentspergroup.Tellthestudentsthattheywillbe

creatingaskitabouttodayslesson.AnnouncethatineachgrouptherewillbeastudentwhoistheDollar,astudent

whoistheBanker,andastudentwhoistheInterestMagician.Ifoneofthegroupsdoesnothaveexactlythreepeople,morethanonestudentcanbeaDollar.

Askstudentstocreateashortskit(aroundaminute)thatinvolvesthefollowing.

Adollarisearnedthroughearnedorpassiveincome.

Thatdollarisgiventothebanker.

Thebankergivesthedollartobusinessesinloans.Thebusinessesgivethedollarbacktothebank,plussomeextramoney.

Thebankgivesthedollartothepersonsaccount,plussomeoftheextramoneyasinterest.

Theinterestmagicianmakestheamountofinterestgroweachyearuntilafter7yearsthedollaristwiceasmuchaswhathe/shestartedwith.

Encouragethestudentstobecreative.Invitethemtocomeupwithaninterestingwaythatthedollarwasearned.

Encouragethemtouseanimatedgestureslikeonacartoontogettheirmessageacrossintheirskit.Invitethemto

havethebankergivethemoneytoaninterestingbusinessfortheloan.HavetheinterestmagicianactlikeamagicianHavethegroupspresenttheirskitsaftersometimetocreatetheskits.

MoneyIsland.com: IntheMoneyIslandonlineworld,yourstudent(s)willberequiredtotohavetheirpassports

stampedandcompletethequest.

Wrap-UpOff-Line:HandouttheWarm-UpActivitySheetagain.Havestudentschangeoraddtotheirwarmupsheets.Havea

discussionwiththegrouponwhatchangesthestudentsmadeandwhythestudentsmadethosechanges.Guidethe

discussiontotheideathatmattresssavingmighthaveseemedsafer,butnointerestwasbeingmadeonthemattress

money,soitwasnotasmartchoice.

Story Board

Teacher Lesson Plan