Content Standard 12: Interest Rates

Grade 12 Benchmarks

1. An interest rate is the price of money that is borrowed or saved.

Content Standard 3: Saving

Grade 4 Benchmark

6. When people deposit money into a bank (or other financial institution), the bank may pay them interest. Banks attract savings by paying interest. People also deposit money into banks because banks are safe places to keep their savings.

Grade 8 Benchmarks

2. For the saver, an interest rate is the price a financial institution pays for using a saver's money and is normally expressed as an annual percentage of the amount saved.

4. When interest rates increase, people earn more on their savings and their savings grow more quickly.

5. Principal is the initial amount of money upon which interest is paid.

6. Compound interest is the interest that is earned not only on the principal but also on the interest already earned.

7. The value of a person's savings in the future is determined by the amount saved and the interest rate. The earlier people begin to save, the more savings they will be able to accumulate, all other things equal, as a result of the power of compound interest.

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