SO MANY BANKS!!! Why do you think there are different banks instead of just one? What might people look for in a bank? Why would you save with a bank?
OLI – To calculate interest rates and decide on the best bank Today you are going to calculate the amount of money a customer would gain in interest with different banks. Answer the questions and decide which bank offers the best interest rate.
HOW TO CALCULATE INTEREST Let’s try an example: John puts £250 into his bank account with Northern Bank Northern bank are giving a 5% interest rate First find 1% of John’s money - £2.50 Now times it by the interest rate - £2.50 x5 This gives us the amount of interest which is £12.50 How much money does John have in his bank account now?
Compound interest If John now has £262.50 and the interest rate is still 5%, how can we calculate his second year? £262.50 divided by 100 = 2.625 or £2.63 £2.63x5=£13.15 Add this to the original £262.50 His total in the second year is £275.65 How much has John gained in interest over two years?
Success Criteria Find 1% of the customer’s original amount (divide by 100) Multiply this by the interest rate This shows the money gained in interest Add this to the original amount to find the new bank balance