Money Matters Key Stage 3 Saving

If you saved £1 a week for ONE year, how much would you save? 365 days 7 days / = 52 weeks £1.00 = £52.00 / 52 weeks

Calculating interest (AER)… e.g.)If you put £50 into a bank account with an interest rate (AER) of 15%, how much would you have at the end of the year? What is 15% of £50? 50 (£) /100 x 15(%) = £7.50 a. Add the interest to the starting amount… £50 ( starting amount) + £7.50 (AER) = £57.50 b.

Total Interest earned: Calculating compound interest… e.g.) If you left your £50 in the bank for 2 years and it had an interest rate of 15% how much interest would you earn? Work out the interest for Year 1 i.e.) 15% of £50 Add it to the starting amount Calculate the interest for Year 2 Add it to the Year 1 total Total Interest earned: £7.50 + £8.62 = £16.12 Year 1 Year 2 £50.00 £57.50 £57.50 £66.12 /100 x 15(%) /100 x 15(%) £7.50 £8.62

Answers… 1. Imagine you put £100 into a savings account… b). 5% - £105 c). 10% - £110 2. If you kept your £100 in the bank for 2 years with an interest rate of … you would earn £… in interest… a). 1% - £2.01 b). 5% - £10.25 c). 10% - £ 21.00

Today we have learnt… That planned saving may be a necessary part of financial security We can plan savings to meet our longer term needs That we are responsible for our future financial security