Risk and reward
Lesson details
Learning outcome
I can describe the relationship between risk and reward in different financial contexts.
Key learning points
- Investing money can lead to an increase but it also comes with a level of risk
- Borrowing money comes with a level of risk
Keywords
Profit - Profit is a business’ financial gain; the difference between the revenue and the cost.
Interest - Interest is money added to savings or loans.
Rate of interest - The rate of interest is the percentage by which an amount will increase.
Common misconception
Investing money is always the right choice as you will make more money.
Investing money comes with a level of risk; what you receive may be less than you put in.
Teacher tip
If pupils want to know more about this topic, you may wish to consider the offer from the charity Maths4Girls: a trained volunteer can come to your classroom to discuss their work in finance and how they use maths in it.
Content guidance
Depiction or discussion of sensitive content
Supervision
Adult supervision recommended
Licence
Lesson video
Loading...
Prior knowledge starter quiz
6 Questions
Q1.Calculate 20% of 25
Q2.If you have 40 colouring pencils and 30% of them break, how many do you have left?
Q3.A top originally cost £20. It is now on sale for £15. What is the percentage decrease in price?
Q4.A store owner buys a pair of shoes for £50 and sells them for £71. What is the percentage profit?
Q5.A house originally valued at £175 000 increase in price by 12.5%. What is its new value?
Q6.An item that originally cost £35 is discounted by 17%. What is the sale price?
Assessment exit quiz
6 Questions
Q1.Alex invests £50 into a savings account that pays 3% interest per annum. After a year, Alex withdraws his £50 plus the interest it earned. How much did Alex withdraw?
Q2.Alex decides to keep his £51.50 in the savings account that pays 3% interest per annum. A year later, Alex withdraws his £51.50 plus the interest it earned. How much money did Alex withdraw?
Q3.Izzy wants to start her own business. The start-up cost is £350 and she has £287. Jun offers to invest the rest. What would Jun's share of the profits be?
Q4.Jun has a part-time job that pays £24/week. He wants to buy a laptop costing £600. How many weeks will it take for him to save enough money?
Q5.Jacob borrows £300 and is expected to pay it back with 8% interest. How much money will Jacob need to pay back?
Q6.Select the potential negative consequences when borrowing money.
To help you plan your 7 financial education lesson on: Risk and reward, download all teaching resources for free and adapt to suit your pupils' needs...
To help you plan your 7 financial education lesson on: Risk and reward, download all teaching resources for free and adapt to suit your pupils' needs.
The starter quiz will activate and check your pupils' prior knowledge, with versions available both with and without answers in PDF format.
We use learning cycles to break down learning into key concepts or ideas linked to the learning outcome. Each learning cycle features explanations with checks for understanding and practice tasks with feedback. All of this is found in our slide decks, ready for you to download and edit. The practice tasks are also available as printable worksheets and some lessons have additional materials with extra material you might need for teaching the lesson.
The assessment exit quiz will test your pupils' understanding of the key learning points.
Our video is a tool for planning, showing how other teachers might teach the lesson, offering helpful tips, modelled explanations and inspiration for your own delivery in the classroom. Plus, you can set it as homework or revision for pupils and keep their learning on track by sharing an online pupil version of this lesson.
Explore more key stage 3 financial education lessons from the Choices, risks and rewards unit, dive into the full secondary financial education curriculum, or learn more about lesson planning.