Delaware Recommended Curriculum

This unit has been created as an exemplary model for teachers in (re)design of course curricula. An exemplary model unit has undergone a rigorous peer review and jurying process to ensure alignment to selected Delaware Content Standards.

Unit Title: Reasons for Banks

Designed by: Rodney Collins Lake Forest School District

Adapted by: Taylor Domenici Jill Szymanski Red Clay School District

Content Area: Social StudiesGrade Level: 5

Summary of UnitThe role of banks and other financial institutions in the economy is to transfer funds, directly or indirectly, from savers to borrowers. The money households do not spend is called savings. An economist uses saving and investing to describe what households do with money they do not spend on goods and services. Saving and investing are essential to long-run economic growth. Saving provides resources to businesses to be used as investment in capital goods. When loans are made to borrowers, it stimulates the nation’s economy. The purchase of more capital goods increases a nation’s production capacity for goods and services, increases the gross domestic product, and can ultimately increase the standard of living.

Starting or improving a business or purchasing or renovating a home requires large amounts of money (financial capital). Since most people do not have large amounts of savings to finance such ventures, money (financial capital) has to be borrowed from other sources. For example, if a business finds demand for its goods and/or services increases, it might borrow money to purchase capital goods to expand. This expansion might result in hiring more workers. This increases the overall level of income in the community. When home owners get a mortgage for the construction of a new house, more workers must be hired to build the houses. Their incomes are then used to purchase more goods and services. In addition to constructing the house, many homeowners will purchase additional goods and services such as furniture, appliances, landscaping, and curtains. All these purchases create additional jobs and income which is spent in the community. Students need to understand how a loan impacts economic activity in the community.

Banks receive deposits from savers and provide loans to borrowers. Banks provide an incentive to savers by paying interest on the deposits, and then charging interest to borrowers. The difference between the two is the bank’s profit. A bank is a business, like any other, seeking to maximize profit and minimize costs. Banks also facilitate exchange by providing access to money. Bank depositors can write checks or withdraw cash in order to purchase goods and services.Delaware Content Standards

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Economics Standard Two 4-5a: Students will understand the role of banks in the economy.

CCSS.ELA-Literacy.W.5.9Draw evidence from literary or informational texts to support analysis, reflection, and research.CCSS.ELA-Literacy.SL.5.1.aCome to discussions prepared, having read or studied required material; explicitly draw on that preparation and other information known about the topic to explore ideas under discussion.CCSS.ELA-Literacy.SL.5.1.cPose and respond to specific questions by making comments that contribute to the discussion and elaborate on the remarks of others.

Big IdeaInterdependence1

Essential Questions What roles do banks play in a community? How does a bank make profit? How might a bank affect the community?

Knowledge and SkillsStudents will know… Saving and borrowing Role of banks How a loan stimulates economic activityStudents will be able to… Understand multiple causes and use information to predict likely effects Use social studies materials and knowledge as evidence to solve problems and

to make and support reasoned decisions, explanations, conclusions, or predictions

Explain the reasoning used in making decisions or predictions, solving problems, and drawing conclusions

1 Trading Partners, a DRC unit for grade 2 about economic interdependence, is available for reference on the DOE website.

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Anticipation Guide2

Using the Anticipation Guide Before Teaching the Unit

Prior to teaching Lesson 1, give each student an Anticipation Guide (Handout 1). Students will independently complete the anticipation guide marking whether they Agree or Disagree with each statement under the Before column only. If a student is unsure, they can mark Don’t Know. Collect all student handouts and save for the end of the unit.

Before After

Agre

e

Disa

gree

Don’

t Kn

ow

Agre

e

Disa

gree

Banks are the best place to keep money.The bank pays you.The ATM will give me money when I need it.I only go to the bank to get money.If I don’t have enough to buy what I need, I need to wait until I make enough money.Banks help the community.

Using the Anticipation Guide after teaching the unit

After teaching the unit have students complete the After column on the right side of the chart. Students should then choose one of the statements in the anticipation guide to justify their answer as to whether they agree or disagree with the statement.

2 Adapted from Classroom Strategies for Interactive Learning by Doug Buehl.

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Lesson 1: The Role of Banks3

Essential Question What roles do banks play in a community?

BackgroundBanks and other financial institutions perform two primary functions. First, they accept deposits from people who want to save their money in a safe place and also earn interest on their savings. People can withdrawal money from these accounts when they wish to use it. Second, they lend money to people who want to borrow. When a bank lends money, the transaction is called a loan. Loans create serious obligations. Borrowers must repay bank loans with interest. In paying interest, borrowers compensate lenders for the use of their money. People often use borrowed money to buy goods and services in the community. Their spending provides income for workers and business owners in the community, thus fostering additional rounds of spending and saving.

Instructional Strategies

Strategy 1: Activating Strategy

Opening the lesson, display for each student a simulated $50 bill. Present students with the following idea:

Your parent just gave you a $50 bill for your birthday. Visualize what you could do with the $50. Share your idea with a partner.

Now your parent makes you put $50 in an account at the bank. If you had your choice, what would you decide to do with the money besides putting it in the bank?

Give students time to respond and share their ideas with the class. Construct a chart of class data as each child shares his/her response. Create categories for the chart based on the responses, like the one below.

3 Handouts adapted from- Handsonbanking.org/What Banks Do

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For example, if the student responds, “I will buy a bike,” the teacher will add the category “spending” onto the data to the chart.

If students give responses about saving, divide the categories into “saving at home” and “saving at the bank.” This will be important later when distinguishing between the benefits of saving at home and the bank.

Teachers should look for ideas leaning towards the concepts of spending (i.e. bikes, clothes), saving (i.e. drawer, piggy bank, purse), and investing. Students typically will not come up with the ideas of investing; however, you can inform them that adults may choose this option (i.e. stock market, retirement account) and add this category to the chart.

Have the students analyze the chart and draw conclusions. Discuss the idea that some students choose to spend and others choose to save their money at home.

Refer back to the original scenario and ask students, “What are the benefits of putting your money in the bank?”

The following ideas should be addressed throughout the discussion: safety interest

Strategy 2: Developing Vocabulary

Give each student a copy of Handout 2: Banks and Your Money. Instruct students to cut out the cards and sequence them to show what happens to money when you put it into the bank. Instruct students to discuss their sequence with a partner or table group. Have students share their thoughts on the sequence of their cards.

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Teacher Note

At this time use the word “put” to signify depositing money into the bank, do not use the term “deposit” this will be addressed later in the lesson when vocabulary is being introduced.

With a teacher set of cards, walk students through the correct sequence using the teacher copy on page 2 of Handout 2 as a reference for the sequence. Students should paste their cards in order on a separate sheet of paper or in their notebooks. Place the cards in the correct sequence on the board. Use Banking Vocabulary on page 3 of Handout 2 as a resource for vocabulary terms while you explain the process on each card.

Using “Card A” explain the following:You receive money for your birthday.

Using “Card B” explain the following:

After you receive your money for your birthday, your parents want you to keep it in a safe place in a bank account. Explain to students the definition of bank account from Handout 2. Have students write the words bank account on their paper. Explain to students that putting money into a bank account is called depositing and share the definition of the word. Add the word deposit to the card with an arrow representing the action.

Using “Card C” explain the following:

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A

depositB bank account

AAAAAAAAAAAAAAA

When money is in your bank account it accumulates interest. Explain to students the definition of the word interest according to the definition from Handout 2. Instruct students to add the term interest to their card as shown below.

Using “Card D” explain the following:

Your money is now accumulating interest in the bank. You make a decision to spend some of your money. You must first withdraw the money from your bank account. Explain to students the definition of withdrawal. Add an arrow to the card and the word withdrawal.

After withdrawing money from your account, you want to spend the money at the shop buying what you like. Share with the students the definition of the word spend. Add the word spend to the card with an arrow representation.

Check for UnderstandingHave students reflect back to the original scenario:

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interest

C

spend

withdrawalD

Your parent just gave you a $50 bill for your birthday. Your parents make you put $50 in an account at the bank.

If you had your choice, would you decide to put all of your money in the bank like your parents suggested, or would you choose something else? Explain your choice.

Strategy 3: Simulation4

When the students enter class, they will have a cup with 6 Skittles on their desk. The students will be told that this is their “Skittle Savings Account.”

Refer back to previous strategies asking students, “What can you do with your money?” Students should respond that they could spend or save their money.

Next, discuss what happens when people save money in a bank. The students should state that the money would earn interest. Refer back to Card C from Strategy 2.

Explain the simulation to students. “Today you were each given 6 Skittles to start a back account. There will be five savings period throughout the day. Each of these periods will coincide with a month’s time. During each period, you will have the option to eat your Skittles or save them. At the end of each month, you will be given interest based on the number of Skittles in your cup. This is how a bank operates. At the end of each month they award interest based on the amount of money in your account.”

Model for the students how to complete Handout 3, the Skittle Bank Account Log after period 1. After students have completed the log, distribute Skittles to each student according to their Skittle balance. You will repeat the same process for each period. At the end of the lesson, have groups of students share their logs with each other. Debrief with the following questions:*Who had the most Skittles? Who had the least amount of Skittles?*Why did some people have many Skittles and others have very few Skittles?*Why would a bank pay you money to hold your money for you?Lesson 2: Interesting Interest5

Essential Question

4 Adapted from: econedlink.org/What’s My Interest5 Adapted from the National Council on Economic Education - Focus: Grades 3-5 Economics/Bulletin Board Banking.Admit/Exit Ticket Strategy adapted from Classroom Strategies for Interactive Learning by Doug Buehl.

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Background InformationThis is a hands on lesson to show students how bank accounts gain interest. This allows students to understand the idea of “compound interest”. Compound interest can be thought of “interest on interest” and will make a deposit grow at a faster rate.

This lesson can be done throughout a class period or throughout an entire class day, depending on how your classroom schedule is set up. You will need to identify five periods that you will distribute Skittles to your students. During a class period, you can do it every ten minutes. Throughout the day, you could do it every hour.

How does a bank make profit?

Instructional Strategies

Strategy 1: Quick Write/Admit Ticket

At the beginning of the class, give the students an index card. Have the students respond to the following, “What is a loan?” on the front of the index cards. After two minutes, discuss the students’ prior knowledge on loans.

Part of this discussion should focus on interest. Remind students that in a previous lesson, we learned one reason to deposit money into a savings account is to earn interest. Banks pay this interest to customers. Remind students that a bank is a business, and the goal of a bank is to make a profit. Ask students for ideas on how a bank might make money if they are paying money to each customer that has a savings account. After having the students share ideas, explain that a bank makes money by charging interest on money that they loan to customers.

Strategy 2: Simulation

Prior to the lesson, create a “town” on a large piece of butcher paper. Click here for a sample.

Explain to students that today you will be role-playing to see the role of a bank in a community. Review the reasons why a person might visit a bank.

Review the two types of interest. Interest that is paid to customers who have the bank hold their money, and interest that the bank charges customers when they borrow money.

Explain that the bank uses the money customers deposit in a savings account to make loans to businesses and people.

Explain that you will be the banker for this lesson. Set up a desk at the front of the room and place a sign that reads “Community Bank” on the desk.

Give six paper clips and one penny to each student. Have each student draw a number from the bag. Distribute one index card to each student who drew a “1,” two index cards to each student who drew a “2,” three index cards to each student who drew a “3” and four index cards to each student who drew a “4.”

Explain that the index cards and paper clips represent income. Explain that in a community not all people have the same amounts of income, so each student in the class will have different amounts of income.

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Tell students that they will use the index cards to “build” a house or a business, and what size their house or business will be, they will flip their pennies and follow the instructions in Visual 1.

Display Visual 1. Explain to the students that they are to flip their pennies twice and record whether the penny lands on heads or tails. Display Visual 2 and explain the following instructions:

• If the students have the correct number of cards for their individual projects, they can begin building the house or business using their cards.

• The students may tape cards together if their project calls for more than one card.

• Once the students have built a house or business, they may tape it on a street on the town you created.

• Some of the students may have more cards than they need for their building projects. Others may not have as many as they need.

• If the students have more than enough for the project, they may save some of the cards by depositing them in the bank. For each card that a student deposits in the bank, he or she will earn one paper clip in interest.

Ask how many students do not have enough cards to build their designated project. Ask those students what they could do to build their business or house. They could borrow money from the bank in the form of a loan.

Tell students that to borrow a card from the bank, it will cost them two paper clips in interest. Remind them that one way banks can make a profit is to charge more interest to those who borrow than it pays to those who save money and deposit their money in the bank.

Once each student has saved or borrowed, show the students how the bank’s holdings (paper clips) have increased. Also draw the students’ attention to how cards were transferred from the savers, to the bank, and then to the borrowers.

Allow time for each student to build a house or business and place it in the town.

Check for UnderstandingHave a class discussion using the following questions as a guide. In our community, did everyone have the same income? Why? People use their income to buy goods and services, to save for the future, and to

pay taxes. How many people in our community used their income to “buy” houses or businesses? How many people saved a part of their income?

When people in the community saved at the bank, what did they receive? What did this represent?

Why do banks pay interest?

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Why do the people in the community borrow from the bank? What did people in the community pay when they borrowed? What did this

represent? Why do banks charge interest to people who borrow? If you were to receive more interest (two paper clips) for each card you put in

the bank instead of one, how would this affect how much you would be willing to save?

Strategy 3: Closing: Quick Write/Exit Ticket

Have the students take out the index card from the beginning of the lesson. On the back of the card, have them answer the following question, “What is a loan?”

Check for Understanding:Give each student a copy of Handout 4. Have the students complete this individually.

Points to Consider: End of Lesson DiscussionThis unit focuses mainly on borrowing and saving. One point that you may want to address with students is that there are a variety of different accounts, such as checking accounts, and that there are different ways money can be accessed such as ATM, personal checks, and credit/debit cards.

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Lesson 3: Banks Help the Community6

Essential Question How might a bank affect the community?

Instructional Strategies

Strategy 1: Role PlayStudents will learn about the effects of borrowing and lending by participating in a role play activity. Click here for the Resources 1-4 noted below.

Distribute role cards (Resource 1) and copies of the play (Resource 2) to 14 students. Explain that these cards describe each character in the play. One additional student is needed to be the narrator of the play.

Distribute a copy of the Record the Action Activity Sheet (Resource 3) to the students who do not receive role cards. Explain that these students will be asked to listen to the story and keep track of what happens when loans are made.

Ask the 14 students with role cards to take turns introducing their characters by reading the information on their card to the rest of the class.

Students who are playing roles should assemble at the front of the room. Give each student a name tag (Resource 4) showing his or her character’s name, and have the students display the name tags on themselves using tape.

Allow students to present the play. When they have finished, have them return to their seats.

Have the class create a diagram to illustrate the economic impact of the loan on the community. All the characters except the narrator will use their signs to create the diagram.

At one end of the board, write in large letters, “Community Bank Makes a Loan.”

Who received the loan?Tyrone Washington.Ask the student with the “Tyrone Washington” sign to tape the sign several inches to the right of the words “Community Bank Makes a Loan.” Ask the student with the “Cathy Alberichi” sign to tape the sign below the bank name. Draw a line from “Community Bank” to the sign labeled “Tyrone Washington.”Whom did Mr. Washington hire to do the work? Alisha Denzel.Ask the student with the “Alisha Denzel” sign to tape the sign several inches to the right of the sign labeled “Tyrone Washington.” Draw a line from “Tyrone Washington” to “Alisha Denzel.”

6 Adapted from “How Banks Affect the Community.” Money Talk$. Volume 3, Issue 1. Winter 200612

From whom did Alisha Denzel buy electrical supplies, cabinets, and lumber? Barbara Flowers, Thomas Collier, and Michael Sutter.Have the students with the “Barbara Flowers,” “Thomas Collier,” and “Michael Sutter” signs tape the signs several inches above the “Alisha Denzel” sign. Draw a line from “Alisha Denzel” to “Barbara Flowers,” from “Alisha Denzel” to “Thomas Collier” and from “Alisha Denzel” to “Michael Sutter.”

Who did Alisha Denzel hire to help with the electrical and carpentry work? Suzanne Jones, Electrician, and Andrew Smith, Carpenter.Have the students with the “Suzanne Jones” and “Andrew Smith” signs tape the signs several inches above the “Alisha Denzel” sign. Draw a line from “Alisha Denzel” to “Suzanne Jones” and from “Alisha Denzel” to “Andrew Smith.”From whom did Mr. Washington buy paint and wallpaper? Juan Miller.Have the student with the “Juan Miller” sign tape the sign near the “Tyrone Washington” sign. Draw an arrow from “Tyrone Washington” to “Juan Miller.”From whom did Mr. Washington buy window treatments? Tom Andrews.Have the student with the “Tom Andrews” sign tape the sign several inches above or below the “Tyrone Washington” sign. Draw an arrow from “Tom Andrews” to “Tyrone Washington.”From whom did Mr. Washington buy ceramic tile?Becky Thomas.Have the student with the “Becky Thomas” sign tape the sign several inches above or below the “Tyrone Washington” sign. Draw an arrow from “Becky Thomas” to “Tyrone Washington.”Whom did Becky Thomas contact to install Mr. Washington’s floor?An installer.Write “Installer” on a blank piece of paper. Tape the paper several inches to the right of the “Becky Thomas” sign. Draw a line from “Becky Thomas” to “Installer.”From whom did Mr. Washington buy appliances?Martha Cohan.Have the student with the “Martha Cohan” sign tape the sign near the “Tyrone Washington” sign. Draw an arrow from “Tyrone Washington” to “Martha Cohan.”Who bought lunch at Yolanda Lovell’s restaurant? Alisha Denzel, Andrew Smith, and Suzanne Jones.Place the “Yolanda Lovell” sign near the “Alisha Denzel,” “Andrew Smith” and “Suzanne Jones” signs. Draw lines from “Yolanda Lovell” to “Alisha Denzel,” “Andrew Smith,” and “Suzanne Jones.”

Check for Understanding Tyrone Washington received the loan, but the loan had an economic impact on

others. The other people received income or money for their services. Draw a diagram (such as the one below) that explains the economic impact from Mr.

Washington receiving a loan from the bank.13

Check for Understanding How might that character make additional connections to other characters in the

play? How might those connections affect the community?Rubric2 – The response gives a valid explanation with an accurate and relevant effect.1 – The response gives a valid explanation with inaccurate, irrelevant, or no effect.

Check for Understanding

The population of this town has increased by 2,000 in the past year.

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How might a bank help one of these businesses meet the increased demand for its goods and services? Use one of the businesses from the town map to explain your answer.

Rubric2 – This response provides a valid explanation with an accurate and relevant example.1 – This response provides a valid explanation with an accurate and relevant example.

This item asks students to explain how a bank could help one of the businesses in a town meet the increased demand for its goods and services that might result from the increase in population. The item gives the student specific information in the graphic about the town, and the student uses this information and knowledge about the role of banks in the economy to answer the question.

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