UNDERSTANDING INTEREST LESSON PLAN
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Lesson Excerpt:
What is interest?
Interest is a term that you hear when working with money. Interest is the amount of money that is paid or earned based on using money.
Most of the time, you will hear about interest when banking. When you put money into a savings account, then the bank calculates how much interest you earn. You earn interest based on the time that the bank has the money.
Interest can also be calculated when working with credit cards. A credit card charges a certain amount of interest when you borrow money from it. Using a credit card is a way of borrowing money. You use a credit card to purchase something and the credit card company loans you the money. They charge you interest for the amount of time that you have borrowed the money until you pay it back. This is why working with credit cards can be very tricky business.
The longer you leave the money in the bank, the more interest accumulates. Because we are working with money, there are different numbers that are involved with interest.
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