Interest Rates Teacher Resources
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Follow the Federal Open Market Committee announcements and newspapers to look for stories about the Federal Reserve actions that target interest rates and boost spending and employment in the United States. This lesson incorporates math, economics, and current events in a real world context.
Students explore the Federal Reserve System. In this Economics instructional activity, students investigate the Fed’s role in formulating money policy through a simulation in which students become members of the board of directors of a Reserve Bank. Students explore how the directors of Reserve Banks contribute to interest rate setting decisions.
Learners analyze the advantages of regular saving and how savings grow with compounding. After reading the story "The Hundred Penny Box", students define the terms "interest," "interest rate," and "compounding." Through several activities, the learners learn how money is compounded through investment.
Learners explore the concept of interest. In this interest lesson plan, students shop for cars and determine the payments and interest rates for various cars. Learners use various websites to research cars and interest rates for car loans. Students use auto loan calculators to determine payments for the cars they chose.
Students examine the Federal Open Market Committee's actions to ensure stable prices by adjusting the discount rate, reserve requirements and interest rates.
Young economists explore and then apply their understanding of the economics of interest rates and the relationship between saving and spending. They investigate several consumer products and compare each one. Then they complete two additional activities using the information they've found. Several good discussion questions are included to help you wrap up the lesson.
For this personal finance worksheet, learners use their problem solving skills to calculate interest rates for loans of different lengths of time.
Learners examine the role interest plays in daily spending and saving decisions. They identify interest rates for various savings plans and loans. They visit a bank Website to survey banking terms and products. Students calculate how long it would take to pay off a $2,000 loan on a credit card charging 18.5% APR and role-play as newspape columnists answering consumer questions.
Young scholars read excerpts from a Washington Post article about a reduction in short term interest rates in 1998. They identify sections in it dealing with monetary policy. In another article, they compare the federal funds rate with other interest rates and create a graph illustrating what would happen to aggregate output if aggregate demand is restrained.
New Review The Fed’s Toolbox
This instructional activity is packed with instructional material and activities on the Federal Reserve System, monetary policy, and the relationship between bank reserves, interest rates, employment, and price stability.
New Review What Do Financial Market Indicators Tell Us?
Explain the four categories of financial indicators (commodity prices, stock indexes, interest rates, and yield spreads), and help your class members understand how changes in this data can affect decisions regarding consumer spending, loans, and retirement plans.
Finally arriving at the general formula for continuously compounded interest as A = Pert, Sal shows a few examples. In the first example, the interest rate, rate of compounding, term of the loan, and principal are all given, and one needs to find the amount owned at the end of the period. In the second example, we need to find the interest rate by taking the natural log of each side of the equation.
Here is a simple tutorial on the difference between simple and compound interest. In it, Sal describes what interest is, defines the vocabulary of principle and interest rate. He also models year-by-year the amount of money owed under the different compounding scenarios.
Sal explains the relationship of FIBOR to interest rates and to other interbank borrowing rates, such as the Federal Funds Rate in the U.S. Viewers will appreciate the simple way he defines and contextualizes these concepts in this short video.
New Review Compounding with 100% Interest Rates
Your young economists will be amazed at the effect of compounding interest more frequently in this collaborative task about making sound financial choices. Learners are walked through the calculations of a couple of examples and then expected to continue the calculations in a table of values.
New Review Compounding with a 5% Interest Rate
The balance in an account continuously compounding interest is the context of this engaging task. Your young accountants will investigate the ending balance in an account as they compound the interest more and more. Learners write the general algebraic form of the model and then use it to find how the number e is involved in continually compounding interest.
Upper graders explore the connection between interest and principal. They use an amortization schedule to determine the amount of principal paid vs interest on a $100,000 home loan. Fourteen discussion questions and a research-based extension activity make this a good real-world activity.
In this finance worksheet, students solve and complete 10 different types of problems. First, they use the information known about decimals, fractions, and percents to solve a number of personal and business finance questions.
A good accompaniment to an economics lesson, this presentation explores the aggregate expenditures model, detailing the relationship between consumption and saving using graphs and charts. Additional information includes investments and interest rates, as well as the global perspective on consumption. Viewers will appreciate the easy-to-understand bullet points, and lecturers will appreciate the handy navigational tool and list of relevant terminology.
Students analyze the stock market from Post WWII through today. Through an interactive simulation, students are given an opportunity to earn "millions". They will analyze the stock market from a historical perspective and explain the reason why long-term investments are important for investors.