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2. Guidance Notes for Teachers Some indication of content and range at level 1 and 2 is shown on the next slide. It could also be used as a single project given to students from start to finish. Relevant slides show all the diagrams/questions/answers that are required. End slides have student question sheets and a teacher question/answer sheet. End slides have printable worksheets for students. Calculator symbols are suggestions only and could be removed depending on the group. The vast majority of questions in this presentation are designed to be non- calculator. Generic Advice: The preparation below is advisable in the majority of presentations. 1.Print off the teacher question and answer sheets/worksheets 2.Print off the student question sheets/worksheets 3.Run through the presentation yourself answering the questions 4.Decide how you are going to deliver the presentation. (a) Are you going to go through it from start to finish with the class, perhaps using it as an example/demonstration of functional maths and focusing on the development of the processing skills involved at each stage? (b) Are you going to use only part of the presentation? (c) Are you simply going to use the presentation to introduce the activity and let the class work on their own through the question sheets but refer to some of the elements/answers within the presentation when needed? 5.Remember the slides are editable so if you wish to introduce an open question/small investigation of your own then simply choose the relevant slide add/delete your own text (using a text box if needed).

3. Content and Skills Coverage and range: Level 1 Understand and use whole numbers and recognise negative numbers in practical contexts Add, subtract, multiply and divide using a range of mental methods Multiply and divide whole numbers by 10 and 100 using mental arithmetic Understand and use equivalences between common fractions, decimals and percentages Add and subtract decimal up to two decimal places Solve simple problems involving ratio, where one number is a multiple of the other Use simple formulae expressed in words for one- or two-step operations Solve problems requiring calculation with common measures including money, time, length, weight, capacity and temperature Convert units of measure in the same system Work out areas, perimeters and volumes in practical situations Construct models and draw shapes, measuring and drawing angles and identifying line symmetry Extract and interpret information from tables, diagrams, charts and graphs Collect and record discrete data and organise and represent information in different ways Find mean and range Use probability to show that some events are more likely to occur than others Understand outcomes, check calculations and explain results Understand and use positive and negative numbers of any size in practical contexts Carry out calculations with numbers of any size in practical contexts Understand, use and calculate ratio and proportion, including problems involving scale Understand and use equivalences between fractions, decimals and percentages Add and subtract fractions; add, subtract, multiply and divide decimals to a given number of decimal places Understand and use simple equations and simple formulae involving one- or two-step operations Recognise and use 2D representations of 3D objects. Find area, perimeter and volume of common shapes Use, convert and calculate using metric and, where appropriate, imperial measures Collect and represent discrete and continuous data, using ICT where appropriate Use and interpret statistical measures, tables and diagrams, for discrete and continuous data using ICT where appropriate Use statistical methods to investigate situations Use a numerical scale from 0 to 1 to express and compare probabilities Title: Savings Content and skills covered Coverage and range: Level 2 At least 1 from each area

4. Introduction Savings Accounts

5. HNP Bank If you have a £10,000 to £100,000 to invest for a period of 1 year then our newly launched bond is for you. 1 Year fixed rate bond: 3% Gross AER (2.40% Net AER) No withdrawals permitted This is a strictly limited offer so apply now. Bluebell Building Society Our Regular Savings Account pays: 2.0% (Variable Rate) Gross AER Instant access (no penalty for withdrawals) Minimum opening balance £100 Deposit as much as you wish when it suits you The AER (Annual Equivalent Rate) is the interest rate quoted on savings accounts. This enables you to make direct comparisons between different types of account. It reflects what the interest rate would be if the interest gained was compounded and paid annually rather than over a shorter period of time (normally monthly). Gross AER is the rate of interest prior to the deduction of any tax that may be due. NET AER is the rate of interest payable after deduction of tax at 20% for basic rate tax payers. Savings Accounts

6. There are many different types of savings accounts on offer to customers. Some give a Variable AER which means that the interest rate may vary throughout the period of the account. The interest rate may go up or down as it is usually linked to some external factor (such as the Bank of England base rate). Savings Accounts Some savings accounts, (such as bonds), offer a fixed rate of interest throughout the period. Many of these types of accounts ask you to invest a substantial minimum amount at the start of the period (usually 1, 2 or 3 years) and do not normally allow any withdrawals. Some times a withdrawal can be made but there is normally a substantial loss of interest involved (A penalty). HNP Bank If you have a £10,000 to £100,000 to invest for a period of 1 year then our newly launched bond is for you. 1 Year fixed rate bond: 3% Gross AER (2.40% Net AER) No withdrawals permitted This is a strictly limited offer so apply now. Bluebell Building Society Our Regular Savings Account pays: 2.0% (Variable Rate) Gross AER Instant access (no penalty for withdrawals) Minimum opening balance £100 Deposit as much as you wish when it suits you

7. Bond accounts like the one shown tend to offer higher rates of interest than regular savings accounts because you are handing over a lot of money at the start and you cannot get access to it until the end of the term. Such accounts are more attractive to wealthier investors or people that happen to have acquired a lump some to invest, such as retiring professionals who may have a pension and a lump sum of money in the form of a gratuity. Savings Accounts HNP Bank If you have a £10,000 to £100,000 to invest for a period of 1 year then our newly launched bond is for you. 1 Year fixed rate bond: 3% Gross AER (2.40% Net AER) No withdrawals permitted This is a strictly limited offer so apply now. Example Question 1. (a)Stephanie has just retired from teaching after spending thirty years in the classroom. She intends to invest £10,000 in the bond shown above. What will the gross interest for the account be after the twelve month period? (b)Stephanie is a basic rate tax payer. What will the Net interest be? (a) 3% of £10,000 = £300 (b) 2.4% of £10,000 = £240 Alternatively 20% of £300 = £60. so £300 - £60 = £240.

8. Bond accounts like the one shown tend to offer higher rates of interest than regular savings accounts because you are handing over a lot of money at the start and you cannot get access to it until the end of the term. Such accounts are more attractive to wealthier investors or people that happen to have acquired a lump some to invest, such as retiring professionals who may have a pension and a lump sum of money in the form of a gratuity. Savings Accounts Westland Building Society. Introducing our e-bond STAR account. Invest from £50,000 to £500,000 1 Year fixed rate bond: 4% Gross AER 1 withdrawal permitted (180 days loss of interest) Available for the next 4 weeks only so hurry!! Question 1. (a)Robert has just shared a lottery prize and he wants to invest £200,000 of his winnings in the bond above. What will his gross interest be when the bond matures? (b)Robert is a basic rate tax payer. How much tax will he have to pay when his investment matures? (c)What is the NET AER for this account? (a) 4% of £200,000 = £8000 (b) 20% of £8000 = £1600 (c) 4% – (20% of 4%) = 4% – 0.8% = 3.2%

9. Bluebell Building Society Our Regular Savings Account pays: 2.0% (Variable Rate) Gross AER Instant access (no penalty for withdrawals) Minimum opening balance £100 Deposit as much as you wish when it suits you Savings Accounts For regular savers, although the AER gives the compounded interest rate over the year it is not so clear how you can work out how much interest you will receive as in the earlier examples. Consider Jenny, who opens a savings account with the Bluebell Building Society on the 1 st January and deposits £100 each month. JanFebMarAprMayJunJulAugSepOctNovDec £100£200£300£400£500£600£700£800£900£1000£1100£1200 Less interest paid in earlier months due to lower amounts in account. More interest paid in later months due to higher amounts in account. Jenny will obviously receive less interest at the end of the year than if she had deposited the whole £1200 in January and left it there (£11 compared to £24 in this case). See the advanced interest rate calculator at http://www.creditchoices.co.uk/savings-calculator.html for more information. http://www.creditchoices.co.uk/savings-calculator.html

10. Comparing Accounts Northwest Bank Instant Access savings account 2.5% (Variable Rate) Gross AER (includes a bonus of 1.5%) for the first 12 months on balances between 1k and 2m 0.1% gross AER on balances < 1k Minimum opening deposit £1000 Highly Flex Building Society Easy Access Savings Account 1.5% (Variable Rate) Gross AER Start with as little as £1 deposit An extra 0.3% for our current account customers. Question 1. Which account pays the highest AER? Comparing Accounts Question 3. What is the difference in the interest rates (over the first year) for a £2000 balance in the each of the variable rate accounts? Question 2. William has a current account with the Highly Flex Building Society. What is the Gross AER for his savings account that he has with them? BFG’s 2 Year bond 1.8% 2.5 – 1.5 = 1% BFG Bank 1 Year fixed rate bond 3.5% Gross AER 2 Year fixed rate bond 4.0% Gross AER Invest from £25,000 to £1,000,000 Interest is payable monthly or annually

11. BFG Bank 1 Year fixed rate bond 3.5% Gross AER 2 Year fixed rate bond 4.0% Gross AER Invest from £25,000 to £1,000,000 Interest is payable monthly or annually Northwest Bank Highly Flex Building Society Easy Access Savings Account 1.5% (Variable Rate) Gross AER Start with as little as £1 deposit An extra 0.3% for our current account customers. Question 4. Rebecca wants to invest £20,000 in a savings account and is happy to lock it away for two years. What would you recommend to Rebecca? Comparing Accounts Use Northwest Bank for the first year then switch to Highly Flex for the second year as the 1.5% bonus is lost. Question 5. What interest rate would Rebecca receive during the second year of her investment if she remained with Northwest Bank? 1% Instant Access savings account 2.5% (Variable Rate) Gross AER (includes a bonus of 1.5%) for the first 12 months on balances between 1k and 2m 0.1% gross AER on balances < 1k Minimum opening deposit £1000

12. BFG Bank 1 Year fixed rate bond 3.5% Gross AER 2 Year fixed rate bond 4.0% Gross AER Invest from £25,000 to £1,000,000 Interest is payable monthly or annually Northwest Bank Highly Flex Building Society Easy Access Savings Account 1.5% (Variable Rate) Gross AER Start with as little as £1 deposit An extra 0.3% for our current account customers. Comparing Accounts Question 6. Asif was left £1000 when his grandma died and he wants to put it into a savings account for 1 year. Which account would you recommend to Asif? North West Bank Question 7. How much gross interest would Asif receive at the end of the year from this account? Question 8. How much gross interest would he have received from the Building Society? £10 x 1.5 = £15 £10 x 2.5 = £25 Instant Access savings account 2.5% (Variable Rate) Gross AER (includes a bonus of 1.5%) for the first 12 months on balances between 1k and 2m 0.1% gross AER on balances < 1k Minimum opening deposit £1000

13. BFG Bank 1 Year fixed rate bond 3.5% Gross AER 2 Year fixed rate bond 4.0% Gross AER Invest from £25,000 to £1,000,000 Interest is payable monthly or annually Northwest Bank Highly Flex Building Society Easy Access Savings Account 1.5% (Variable Rate) Gross AER Start with as little as £1 deposit An extra 0.3% for our current account customers. Comparing Accounts Question 9. Bethan opened an instant access account with the Northwest Bank and deposited £1500 on 1 st January. On the 10 th January she went on an unplanned skiing trip for a week and withdrew £600 which she never replaced. How did this affect the interest rate on her account? It dropped from 2.5% to 0.1% Instant Access savings account 2.5% (Variable Rate) Gross AER (includes a bonus of 1.5%) for the first 12 months on balances between 1k and 2m 0.1% gross AER on balances < 1k Minimum opening deposit £1000 Question 10. Calculate the approximate loss of interest by the year end. £15 x 2.5 = £37.50 whereas £9 x 0.1 = 90p So loss of interest  £37.50 – 90p = £36.60

14. BFG Bank 1 Year fixed rate bond 3.5% Gross AER 2 Year fixed rate bond 4.0% Gross AER Invest from £25,000 to £1,000,000 Interest is payable monthly or annually Northwest Bank Highly Flex Building Society Easy Access Savings Account 1.5% (Variable Rate) Gross AER Start with as little as £1 deposit An extra 0.3% for our current account customers. Comparing Accounts Question 11. Jaswinder received £40 gross interest on his Easy Access savings account shown above. He is not a basic rate tax payer. If he had been a basic rate tax payer, how much would he have received? £40 – 20% of £40 = £40 - £8 = £32 Instant Access savings account 2.5% (Variable Rate) Gross AER (includes a bonus of 1.5%) for the first 12 months on balances between 1k and 2m 0.1% gross AER on balances < 1k Minimum opening deposit £1000 Question 12. What is the NET AER for this account? 1.5% – (20% of 1.5%) = 1.5% – 0.3% = 1.2% NET AER

15. BFG Bank 1 Year fixed rate bond 3.5% Gross AER 2 Year fixed rate bond 4.0% Gross AER Invest from £25,000 to £1,000,000 Interest is payable monthly or annually Northwest Bank Highly Flex Building Society Easy Access Savings Account 1.5% (Variable Rate) Gross AER Start with as little as £1 deposit An extra 0.3% for our current account customers. Comparing Accounts Question 13. Calculate the NET AER on the 2 Year fixed rate bond offered by the BFG bank. 4 – 0.8 = 3.2% NET AER Instant Access savings account 2.5% (Variable Rate) Gross AER (includes a bonus of 1.5%) for the first 12 months on balances between 1k and 2m 0.1% gross AER on balances < 1k Minimum opening deposit £1000 Question 14. Calculate the gross interest payable on the 1 Year fixed rate bond for a deposit of £25,000. 3.5 x £250 = £875

16. BFG Bank 1 Year fixed rate bond 3.5% Gross AER 2 Year fixed rate bond 4.0% Gross AER Invest from £25,000 to £1,000,000 Interest is payable monthly or annually Northwest Bank Highly Flex Building Society Easy Access Savings Account 1.5% (Variable Rate) Gross AER Start with as little as £1 deposit An extra 0.3% for our current account customers. Comparing Accounts (2.8 x £10,000)  12 = £2,333  £2300 Instant Access savings account 2.5% (Variable Rate) Gross AER (includes a bonus of 1.5%) for the first 12 months on balances between 1k and 2m 0.1% gross AER on balances < 1k Minimum opening deposit £1000 Question 15. A wealthy businesswoman opens a £1,000,000, 1 year bond with the BFG bank and wants the interest to be paid monthly into her current account. Assuming that a NET AER of 2.8% applies, calculate the monthly interest payments. (nearest £100).

17. Northwest Bank Instant Access savings account 2.5% (Variable Rate) Gross AER (includes a bonus of 1.5%) for the first 12 months on balances between 1k and 2m 0.1% gross AER on balances < 1k Minimum opening deposit £1000 Highly Flex Building Society Easy Access Savings Account 1.5% (Variable Rate) Gross AER Start with as little as £1 deposit An extra 0.3% for our current account customers. BFG Bank 1 Year fixed rate bond 3.5% Gross AER 2 Year fixed rate bond 4.0% Gross AER Invest from £25,000 to £1,000,000 Interest is payable monthly or annually Worksheet

18. Example Question 1. (a)Stephanie has just retired from teaching after spending thirty years in the classroom. She intends to invest £10,000 in the bond shown above. What will the gross interest for the account be after the twelve month period ? (b)Stephanie is a basic rate tax payer. What will the Net interest be? (a) 4% of £200,000 = £8000 (b) 20% of £8000 = £1600 (c) 4 – 20% of 4 = 4 – 0.8 = 3.2% (a) 3% of £10,000 = £300 (b) 2.4% of £10,000 = £240 Question 1. (a)Robert has just shared a lottery prize and he wants to invest £200,000 of his winnings in the bond above. What will his gross interest be when the bond matures? (b)Robert is a basic rate tax payer. How much tax will he have to pay when his investment matures? (c)What is the NET AER for this account? Comparing Accounts Question 1. Which account pays the highest AER? Question 3. What is the difference in the interest rates (over the first year) for a £2000 balance in the each of the variable rate accounts? Question 2. William has a current account with the Highly Flex Building Society. What is the Gross AER for his savings account that he has with them? BFG’s 2 Year bond 1.8% 2.5 – 1.5 = 1% Question 4. Rebecca wants to invest £20,000 in a savings account and is happy to lock it away for two years. What would you recommend to Rebecca? Use Northwest Bank for the first year then switch to Highly Flex for the second year as the 1.5% bonus is lost. Question 5. What interest rate would Rebecca receive during the second year of her investment if she remained with Northwest Bank?1% Question 6. Asif was left £1000 when his grandma died and he wants to put it into a savings account for 1 year. Which account would you recommend to Asif? North West Bank Question 7. How much gross interest would Asif receive at the end of the year from this account?£10 x 2.5 = £25 Question 8. How much gross interest would he have received from the Building Society? £10 x 1.5 = £15 Teacher Q + A Teacher Q + A 1

19. Question 9. Bethan opened an instant access account with the Northwest Bank and deposited £1500 on 1 st January. On the 10 th January she went on an unplanned skiing trip for a week and withdrew £600 which she never replaced. How did this affect the interest rate on her account? It dropped from 2.5% to 0.1% Question 10. Calculate the approximate loss of interest by the year end.loss of interest  £37.50 – 90p = £36.60 Question 11. Jaswinder received £40 gross interest on his Easy Access savings account shown above. He is not a basic rate tax payer. If he had been a basic rate tax payer, how much would he have received? £40 – 20% of £40 = £40 - £8 = £32 Question 12. What is the NET AER for this account?1.5 – 20% of 1.5 = 1.5 – 0.3 = 1.2% NET AER Question 13. Calculate the NET AER on the 2 Year fixed rate bond offered by the BFG bank.4 – 0.8 = 3.2% NET AER Question 14. Calculate the gross interest payable on the 1 Year fixed rate bond for a deposit of £25,000.3.5 x £250 = £875 (2.8 x £10,000)  12 = £2,333  £2300 Question 15. A wealthy businesswoman opens a £1,000,000, 1 year bond with the BFG bank and wants the interest to be paid monthly into her current account. Assuming that a NET AER of 2.8% applies, calculate the monthly interest payments. (nearest £100). Teacher Q + A 2

20. Example Question 1. (a)Stephanie has just retired from teaching after spending thirty years in the classroom. She intends to invest £10,000 in the bond shown above. What will the gross interest for the account be after the twelve month period ? (b)Stephanie is a basic rate tax payer. What will the Net interest be? Question 1. (a)Robert has just shared a lottery prize and he wants to invest £200,000 of his winnings in the bond above. What will his gross interest be when the bond matures? (b)Robert is a basic rate tax payer. How much tax will he have to pay when his investment matures? (c)What is the NET AER for this account? Comparing Accounts Question 1. Which account pays the highest AER? Question 3. What is the difference in the interest rates (over the first year) for a £2000 balance in the each of the variable rate accounts? Question 2. William has a current account with the Highly Flex Building Society. What is the Gross AER for his savings account that he has with them? Question 4. Rebecca wants to invest £20,000 in a savings account and is happy to lock it away for two years. What would you recommend to Rebecca? Question 5. What interest rate would Rebecca receive during the second year of her investment if she remained with Northwest Bank? Question 6. Asif was left £1000 when his grandma died and he wants to put it into a savings account for 1 year. Which account would you recommend to Asif? Question 7. How much gross interest would Asif receive at the end of the year from this account? Question 8. How much gross interest would he have received from the Building Society? Student Questions Student Questions 1

21. Question 9. Bethan opened an instant access account with the Northwest Bank and deposited £1500 on 1 st January. On the 10 th January she went on an unplanned skiing trip for a week and withdrew £600 which she never replaced. How did this affect the interest rate on her account? Question 10. Calculate the approximate loss of interest by the year end. Question 11. Jaswinder received £40 gross interest on his Easy Access savings account shown above. He is not a basic rate tax payer. If he had been a basic rate tax payer, how much would he have received? Question 12. What is the NET AER for this account? Question 13. Calculate the NET AER on the 2 Year fixed rate bond offered by the BFG bank. Question 14. Calculate the gross interest payable on the 1 Year fixed rate bond for a deposit of £25,000. Question 15. A wealthy businesswoman opens a £1,000,000, 1 year bond with the BFG bank and wants the interest to be paid monthly into her current account. Assuming that a NET AER of 2.8% applies, calculate the monthly interest payments. (nearest £100). Student Questions 2