Standards for The Benefits of Investing Early

Standard: 14

Name: Banks, Interest Rates, and Financial Markets

Banks connect savers and borrowers by accepting deposits and making loans, with the interest rate serving as the price of money borrowed or saved. Businesses can also obtain funds by issuing debt or selling ownership shares in the company.

• K-5: At the elementary school level, students learn about the role of banks and interest.
• 6-8: Middle school students understand what a bank does with the money people deposit and how interest rates are determined by markets.
• 9-12: High school students learn about financial markets, including stock and bond markets. The concept of real interest rate is introduced, as is how interest rates impact lenders and borrowers.Benchmark Students will know that: Students will use this knowledge to: 14.E.1 Banks are businesses where people save money and earn interest, and where people borrow money and pay interest.Role-play bankers taking in deposits from customers who earn interest and other customers taking out loans and paying interest.E: ELEMENTARY STUDENTS

Name: Managing Credit

Standard: 5

• Students will understand that: Credit allows people to purchase and enjoy goods and services today, while agreeing to pay for them in the future, usually with interest. There are many choices for borrowing money, and lenders charge higher interest and fees for riskier loans or riskier borrowers. Lenders evaluate creditworthiness of a borrower based on the type of credit, past credit history, and expected ability to repay the loan in the future. Credit reports compile information on a person’s credit history, and lenders use credit scores to assess a potential borrower’s creditworthiness. A low credit score can result in a lender denying credit to someone they perceive as having a low level of creditworthiness. Common types of credit include credit cards, auto loans, home mortgage loans, and student loans. The cost of post-secondary education can be financed through a combination of grants, scholarships, work-study, savings, and federal or private student loans.