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Lesson Plans
Filling Empty Pockets: Borrowing, Loans, and Credit
Overview Procedures for Teachers Organizers for Students

In this lesson, students explore the concepts of borrowing and credit with an emphasis on credit cards. Students learn how credit works, why banks and other corporations extend credit, and what credit consumers need to know, including how to preserve their access to credit and how to avoid "credit trouble." Students also consider the real cost of buying on credit, weighing the costs and benefits of credit purchases against the option of budgeting and saving. Finally, students will consider various real offers made by credit providers and decide which offer, among several, is the best.

Grade Level:
Grades 9-12

Time Allotment:
Three 45-minute class periods

Subject Matter:
Financial Literacy, Mathematics, Compound interest, Exponential growth.

Learning Objectives

Students will be able to:

  • Understand how credit works.
  • Define terms such as credit, loan, annual percentage rate, interest, and principal.
  • Compare various credit offers to understand the ramifications of making purchases with credit.
  • Learn how to be a responsible credit consumer.
  • Compare the “real costs” of purchasing on credit versus delaying a purchase until enough money has been saved.


McREL Economics Standard 7: Understands savings, investment, and interest rates Level IV =15&StandardID=7

1. Knows that an interest rate is a price of money that is borrowed or saved and that interest rates are determined by the forces of supply and demand.
3. Understands that higher interest rates provide incentives for people to save more and to borrow less, and vice versa.

McREL Life Work Standard 3: Manages money effectively =24&StandardID=3
1. Prepares and follows a budget
2. Makes forecasts regarding future income and expenses
3. Uses sound buying principles for purchasing goods and services
4. Understands credit and uses it effectively

NCTM Standards for Grades 9-12
In grades 9-12, all students should—
  • generalize patterns using explicitly defined and recursively defined functions;
  • use a variety of symbolic representations, including recursive and parametric equations, for functions and relations;
  • use symbolic expressions, including iterative and recursive forms, to represent relationships arising from various contexts;
  • draw reasonable conclusions about a situation being modeled.

This lesson was prepared by: Patrick Vennebush