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TCSS ECONOMICS: Unit 5 PERSONAL FINANCE Unit Essential Question: How do financial decisions impact producers and consumers? TIME FRAME: 12 Days Capstone Requirements during this Time Period (THESE DATES FALL AFTER THIS UNIT IS COMPLETED/AFTER SPRING BREAK) April 10th – 14th Provide class time for students to finalize Capstone Project th th April 10 – May 12 Final Portfolio Submission (depending on date(s) for presentations) Unit Resources: I do – We do – You do – Teacher notes p.93-113 Personal Finance Review Cards Unit 5 map Personal Finance Concepts ppt Personal Finance Review cards ppt Unit 5 standards questions Per Fin ppt Unit 5 practice assessment questions Personal Finance Computer Games Personal Finance WebQuest Concept 1: Financial Institutions (2 days) SSEPF2A: Compare services offered by different financial institutions. Lesson Essential Question: How do banks and other financial institutions channel funds between savers and investors? Enduring Understanding/Theme: Individuals, Groups, and Institutions KNOW Savings Lending Loan Borrower and Saver Commercial bank Credit union Savings and loan UNDERSTAND Different types of financial institutions Services offered by each type of financial institution How banks make a profit Why credit unions are nonprofit Types of checking Difference between checking and savings BE ABLE TO DO (DOK 2+) Explain the different types of financial institutions Discern the services offered by each type of financial institution Summarize how banks make a profit Describe why credit unions are nonprofit 1 Mortgage Checking Certificate of Deposit Money Market account Debit FDIC Liquidity Sample Formative Assessments: Blue Financial is a financial institution owned by its members. It offers lower loan rates and easier application processes for its members. Based SOLELY on this information, Blue Financial is MOST LIKELY a A. credit union. B. commercial bank. C. savings and loan. D. credit card agency. Which type of savings account has the least liquidity, but offers the highest rate of interest? a. Standard savings b. Certificate of deposit c. Money market savings d. Mutual funds RESOURCES: I do – We do – Types of financial institutions and interest --https://prezi.com/ozqmbfrvojes/types-of-financialinstitutions/ Why Should I invest posters You do – Financial Institutions Ticket Out the Door Why should I invest teacher commentary Concept 2: Interest and Credit (3 days) SSEPF2B: Explain reasons for the spread between interest charged and interest earned. SSEPF4A: List factors that affect credit worthiness. SSEPF4B: Compare interest rates on loans and credit cards from different institutions. SSEPF4C: Explain the difference between simple and compound interest rates. Lesson Essential Question: How does interest impact decisions made by producers and consumers? Enduring Understanding/Theme: Individuals, Groups, and Institutions 2 KNOW UNDERSTAND Interest Difference between interest charged to consumers and interest earned by Simple Interest consumers Compound Interest The reason for the spread between interest Credit charged and interest earned Credit worthiness How simple and compound interest differ Loan The factors that determine credit Interest charged worthiness Interest earned Difference between interest on loan and Variable interest rate interest on a credit card APR Credit limit Credit History/Report Credit Score Sample Formative Assessments: Which factor most directly affects the amount of money borrowers must repay to lenders? A. Inflation rate C. Employment rate B. Annual percentage rate D. Currency exchange rate BE ABLE TO DO (DOK 2+) Discuss the reasons for a spread between interest charged and interest earned Explain the difference between simple and compound interest Evaluate the determining factors of credit worthiness Assess how credit history impacts credit worthiness and credit score Appraise why a difference exists between interest on a loan and interest on a credit card. To maximize profits, a bank will charge A. A higher rate of interest on loans and lower interest on deposits B. The same rate of interest for deposits and loans C. A higher rate of interest for businesses than individuals D. A lower rate of interest on loans and higher interest on deposits Which factor will have the LEAST impact on whether a person gets credit or not? A. character, how willing the person is to pay back the loan B. compatibility, how much the loan officer likes the person C. capacity, how able the person is to pay back the loan D. collateral, how much the person's assets are worth Bill is choosing between two different savings accounts. One has simple interest and the other has compound interest. If Bill is planning on saving money for a long period of time and he wants the most return on his savings he should choose the account with A. compound interest because it will pay interest on the original deposit plus interest earned over time. B. simple interest because it is easier to calculate. C. simple interest because that account will pay interest on the total amount in the account at all times. D. compound interest because it will pay an increasing interest based on the amount of the original deposit. 3 RESOURCES: I do – Types of financial institutions and interest --https://prezi.com/ozqmbfrvojes/types-of-financialinstitutions/ We do – You do – Importance of Credit (1, 2) Interest and Credit Calculate Interest Credit --- https://prezi.com/sjxqurxhscdy/credit/ Credit v. Debit Concept 3: Investments (3 days) SSEPF1C: Create a savings or financial investment plan for a future goal. SSEPF2C: Give examples of the direct relationship between risk and return. SSEPF2D: Evaluate a variety of savings and investment options; include stocks, bonds, and mutual funds. Lesson Essential Question: How can individuals use financial institutions to plan for the future? Enduring Understanding/Theme: Individuals, Groups, and Institutions KNOW Investment Risk and Return Stocks Bonds Mutual Funds 401K Roth IRA Dividends Differentiation Sample Formative Assessments: UNDERSTAND The importance of investment The difference between investment options Relationship between risk and return How risk and return correlates to investment choice BE ABLE TO DO (DOK 2+) Investigate the risk and return for different investment options Develop a plan for a future goal Discuss the importance of planning for retirement Explain how risk and return correlate to the various investment options Describe why an individual would choose certain investments over others When dealing with investments, as risk of losing money increases A. more people take that risk. C. more insurance is needed to protect the investment. B. it is more likely the investment is short term. D. the rate of return is usually higher. 4 Loans extended for longer periods of time often involve higher interest rates because A it compensates the lender for greater risk B it compensates buyer for using savings to make a purchase C it encourages consumers to buy durable goods for long periods of time D it encourages savings Shondelle has a large sum of money to invest. She is not concerned with a large return, but is very sensitive to risk. Which would be the best investment for her? A. real estate B. stock market C. a savings account D. checking account RESOURCES: I do – Risk, Return, Investments --https://prezi.com/ogdlgkksi_c1/risk-return-andtypes-of-investments/ We do – You do – Samantha’s Decision Risk and Return Investment Match-up Why investing is important Start Early video Concept 4: Insurance (2 days) SSEPF5A: List various types of insurance such as automobile, health, life, disability, and property. SSEPF5B: Explain the costs and benefits associated with different types of insurance; include deductibles, premiums, shared liability, and asset protection. Lesson Essential Question: How do insurance and other risk-management strategies protect against financial loss? Enduring Understanding/Theme: Individuals, Groups, and Institutions KNOW Insurance Automobile insurance Comprehensive auto insurance Collision auto insurance Liability auto insurance Heath Insurance Medicare PPO HMO Disability insurance UNDERSTAND The different types of insurance The benefits and costs of insurance Difference between deductibles and premiums Importance of shared liability and asset protection Characteristics of each type of insurance Different insurance plans BE ABLE TO DO (DOK 2+) Explain the different types of insurance Infer the costs and benefits associated with insurance Investigate the relationship between deductibles and premiums Summarize the importance of shared liability and asset protection for the consumer Decipher the specific characteristics of each type of insurance 5 Workers Compensation Life Insurance Term life insurance Whole life insurance Property/Home insurance Renter’s insurance Deductible Premium Shared liability Asset protection Sample Formative Assessments: A woman recently took time off work while recovering from a car accident. Which insurances provided her with coverage during this process? A. Life and health C. Property and Life B. Health and Disability D. Disability and Automobile Which is a primary benefit of all types of insurance? A. People can be more careless. C. Lawsuits are easier to settle. B. It helps people share risk. D. Insurance keeps prices low in a market The cost you pay for your insurance coverage is called a. Policy B. Premium C. Deductible D. Coverage limit Tommy wants to make sure that his deductible is as low as possible for his car insurance, what does this mean for his monthly premium? a. It will be higher b. It will be lower c. It will be the same d. There is no way to know RESOURCES: I do – Insurance --https://prezi.com/o2li1dtlpci1/insurance/ We do – You do – Why insurance is important What type of insurance do I need? In case of emergency What’s my coverage 6