Banks and Banking

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Banks and Banking

• What banks do you know of?
• Can you name some?

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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?

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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.

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HOW TO CALCULATE INTEREST

• Lets 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 Johns 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?

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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
• 2.63x513.15
• 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?

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Success Criteria

• Find 1 of the customers 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