CALCULATING SIMPLE INTEREST LESSON PLAN TEACHING
MONEY CONCEPT LEARNING
FINANCE ECONOMIC BUSINESS MATH ACTIVITY SAMPLE EXAMPLE HELP
STUDENTS PRACTICE TEACHER FINANCE SKILLS ONLINE COURSE

Students
learn how to calculate simple interest.

SIMPLE INTEREST

Concept: Understand what simple interest is and how it is calculated.

Objectives:

Know and use simple interest terminology

Understand when interest is paid

Understand when interest is earned

Know and use the formula for calculating simple interest

Know and use the formula for calculating the total amount of a loan or total value of an investment at the end of a specified term

Understand how to algebraically manipulate the interest formulas to solve for different variables

Lesson -
Simple
Interest (see below for
printable lesson)

Overhead

Many pre-calculated interest examples

Lesson Activity

Ask class what interest is

Note how many respond with paid interest versus earned interest

Define it first as the amount charged to borrow money

Discuss specific examples: car loans,
mortgage loans, vacation loans, etc..

Discuss when simple interest might be used (i.e. short term) and explain that it is a very simple way to calculate interest and mention that banks and other lending institutions usually use compound interest which will be discussed later.

Discuss the three elements that are involved (principal, rate, term)

Define each term

Introduce the interest formula: I=Prt

Work through examples

Talk about total amount due: A = P + I

Introduce the total amount formula: A = P * (1+ rt)

Work through examples

Introduce earned investment and define the terms accordingly

Work through examples

Present a problem with a variable other than interest – ask class to think of ways to solve

Discuss the interest table

Present the different algebraic formulas and work through how they are derived

Work through examples

Assessment/Evaluation
Have students complete worksheet. A passing grade is 70% or greater.

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teaching and learning general money skills, personal finance, and money
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