Interest Rates Lesson Plan

Instructor: Tammy Galloway

Tammy teaches business courses at the post-secondary and secondary level and has a master's of business administration in finance.

If you're discussing interest rates with your students, this lesson plan explores short and long term interest rates and its economic impact. Students will read a lesson, participate in discussion questions, complete an activity, and take a quiz.

Learning Objectives

After this lesson, students will be able to:

  • explain what interest rates
  • discuss the difference between short- and long-term interest rates
  • explain how interest rates are impacted by the health of the economy


60 minutes

Curriculum Standards

  • CCSS.ELA-Literacy.W.11-12.1.a

Introduce precise, knowledgeable claim(s), establish the significance of the claim(s), distinguish the claim(s) from alternate or opposing claims, and create an organization that logically sequences claim(s), counterclaims, reasons, and evidence.

  • CCSS.ELA-Literacy.W.11-12.1.b

Develop claim(s) and counterclaims fairly and thoroughly, supplying the most relevant evidence for each while pointing out the strengths and limitations of both in a manner that anticipates the audience's knowledge level, concerns, values, and possible biases.

  • CCSS.ELA-Literacy.L.11-12.6

Acquire and use accurately general academic and domain-specific words and phrases, sufficient for reading, writing, speaking, and listening at the college and career readiness level; demonstrate independence in gathering vocabulary knowledge when considering a word or phrase important to comprehension or expression.



  • Begin this lesson by asking students what they know about loans and interest rates. Decide on a class definition for the term 'interest rate,' writing it on the board. Tell students they will be learning about two types of interest rates: short-term and long-term.
  • Distribute the Short vs. Long Term Interest Rates: Differences & Significance lesson, select a student to read the 'Short-Term Interest Rate' section out loud to the rest of the class, then start the following discussion:
    • Add a definition for 'short-term interest rate' to the board.
    • In your own words, explain the terms 'lender' and 'borrower.'
    • Based on the example in the lesson, would you charge your friend interest on the short-term loan? If so, how much? If not, explain why.
  • Now choose another student to read 'Long-Term Interest Rate' section aloud, then ask these discussion points:
    • Define 'long-term' as noted in the lesson.
    • Add a definition for 'long-term interest rate' to the board.
    • Would you loan someone money long-term? Why or why not?
  • Afterwards, select a few other students to take turns reading the paragraphs for the remainder of the lesson out loud. Ask the class the following:
    • What is the major difference between short- and long-term interest rates?
    • When the state of the economy is healthy, which type of interest rate is higher? Which interest rate is higher in an economic slump?
  • Afterwards, distribute the lesson quiz. Students may complete independently, in pairs, or groups.
  • Review the answers to the quiz questions as a class, answering any outstanding questions students may have about the differences between the two types of rates.

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