| Code |
Description |
| SS.8.FL.3.1: | Explain that banks and other financial institutions loan funds received from depositors to borrowers and that part of the interest received from these loans is used to pay interest to depositors for the use of their money. |
| SS.8.FL.3.2: | Explain that, 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. |
| SS.8.FL.3.3: | Discuss that interest rates paid on savings and charged on loans, like all prices, are determined in a market. |
| SS.8.FL.3.4: | Explain that, when interest rates increase, people earn more on their savings and their savings grow more quickly. |
| SS.8.FL.3.5: | Identify principal as the initial amount of money upon which interest is paid. |
| SS.8.FL.3.6: | Identify the value of a person’s savings in the future as determined by the amount saved and the interest rate. Explain why 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. |
| SS.8.FL.3.7: | Discuss the different reasons that people save money, including large purchases (such as higher education, autos, and homes), retirement, and unexpected events. Discuss how people’s tastes and preferences influence their choice of how much to save and for what to save. |
| SS.8.FL.3.8: | Explain that, to assure savers that their deposits are safe from bank failures, federal agencies guarantee depositors’ savings in most commercial banks, savings banks, and savings associations up to a set limit. |
This cluster includes the following access points.
| Access Point Number |
Access Point Title |
| SS.8.FL.3.AP.1: | Identify how financial institutions use deposited funds to gain profit and offer loans. |
| SS.8.FL.3.AP.2: | Identify an interest rate as the price paid for using someone else’s money, expressed as a percentage of the amount saved. |
| SS.8.FL.3.AP.3: | Identify why banks that experience an increase in the number of people who want loans may decide to pay higher interest rates on deposits. |
| SS.8.FL.3.AP.5: | Identify principle as the initial amount of money upon which interest is paid. |
| SS.8.FL.3.AP.6: | Identify the value of a person’s savings in the future as determined by the amount saved and the interest rate. |
| SS.8.FL.3.AP.7: | Identify the different reasons that people save money, including large purchases, retirement, and unexpected events. |
| SS.8.FL.3.AP.8: | Identify how the FDIC and NCUA protect your investments and savings in financial institutions. |
| SS.8.FL.3.AP.4: | Identify how when interest rates increase, people earn more on their savings and their savings grow more quickly. |
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