Football Lesson

Post date: Sep 18, 2011 2:14:43 AM

MODULE 1 // SAVE MONEY. START NOW.

Overview: In this lesson students will discover how to save and why it is such a valuable life skill.

Age Level: 14-18 years old

Time Allotment: 45 minutes

Subject: Economics, Math, Finance, Consumer Sciences, Life Skills

Learning Objectives:

• Master the basics of interest and how saving money makes money

• Become familiar with the different types of savings accounts and options

• Discover financial tools designed to make saving easy

MODULE 1 // QUIZ

Answer the following questions:

1. What is principal?

2. Describe the difference between a fixed and variable interest rate.

3. True or false: Liquidity refers to how accessible your money is to you.

4. Which typically earns more interest, a savings account or a CD?

5. True or false: Interest rates of checking accounts are often higher than those for savings accounts.

6. What is APR?

7. What is the rule called that helps you determine how long your money takes to double in savings?

8. List three common reasons people save money.

9. True or false: If you need constant access to your funds, a traditional savings account is a good

savings option.

10. Experts suggest you should try to save what percentage of your income?

MODULE 1 // WRITTEN EXERCISES

Compound interest:

The following formula shows how to calculate compound interest annually.

Year 1:

$____________ x ____________ = $____________+ $____________ = $____________

Principal Interest Rate Interest Earned Principal New Principal for Following Year

(ex:5%=.05)

Year 2:

$____________ x ____________ = $____________+ $____________ = $____________

Principal Interest Rate Interest Earned Principal New Principal for Following Year

(ex: 5% = .05)

Year 3:

$____________ x ____________ = $____________+ $____________ = $____________

Principal Interest Rate Interest Earned Principal New Principal for Following Year

(ex: 5% = .05)

Based on the above formula for compound interest, how much total savings would you have:

If you put $100 in a savings account with a 3% APR for 2 years?

If you put $500 in a CD with a 5% APR for 3 years?

If you put $1,000 in a money market account with a 4% APR for 4 years?

If you put $5,000 in a CD with a 6% APR for 5 years?FINANCIAL FOOTBALL // PRO MODULE 1 // PAGE 11