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8th grade · Social Studies · Unit 9 of 12

Money Smarts

Budgets, saving, interest and credit

What your child practices

Personal finance: income and taxes, making a budget, saving and compound interest, credit and debt, investing and risk, and insurance.

Arizona Academic Standards learning standard: 8.E1.5; 8.E1.2 · creating a budget, and the relationship between interest rates, saving and credit

How we explain it

Children can open this short lesson before they practice.

  1. Simple interest = amount × rate × years.
  2. Interest on savings is money the bank pays you; interest on credit is money you pay. An insurance premium is the regular payment to keep a policy.
  3. Opportunity cost is what you give up when you choose to spend or save. A budget plans income, spending and saving.

Example: How much simple interest does $500 earn at 4% a year for 3 years? Interest = amount × rate × years. $500 × 0.04 = $20 a year. $20 × 3 = $60. Answer: $60

Money Smarts in Arizona

In the Arizona Academic Standards, this is unit 9 of 12 in 8th grade Social Studies, after Citizens & Civil Society and before Supply & Demand.

Gradelings describes a child's practice on this unit as Beginning, Approaching, Meeting or Exceeding (Four practice steps). That reflects practice, not a report-card mark: the teacher decides the mark.

Source: Arizona Department of Education

Sample questions

A taste of this unit. In the app, questions change every time and get easier or harder to match your child.

  1. Question 1

    Opportunity cost in personal finance means…

    • the cost of opening an account
    • a bank fee
    • what you give up when you choose to spend or save

  2. Question 2

    Net pay is…

    • the money you owe
    • what you take home after taxes and deductions
    • your pay before taxes

  3. Question 3

    A jacket costs $260 and is 25% off. What is the sale price?

    • $65
    • $195
    • $325
    • $235

  4. Question 4

    How much simple interest does $1,800 earn at 5% a year for 2 years?

    • $180
    • $1,980
    • $360
    • $90

  5. Question 5

    Interest on a savings account is…

    • a tax on your allowance
    • money the bank pays you for keeping your money there
    • a fee for spending

  6. Question 6

    A budget is a plan for…

    • how to avoid all spending
    • how to spend and save your money
    • how to borrow without paying back

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