At the 4th grade level, students should understand the concept of credit and the cost of using creditnamely, the obligation to repay what is borrowed plus interest on the amount borrowed. Students should recognize that a reputation for repaying loans contributes to a persons ability to obtain loans in the future. At the 8th grade level, attention turns to why people use credit, the sources of credit, why interest rates vary across borrowers, and the reasons for using credit to invest in education and durable goods. Students should be able to make basic calculations related to borrowing, including principal and interest payments as well as compound interest. At the 12th grade level, the focus is on credit reports, credit scores, behaviors that contribute to strong credit reports and scores, and the impact of credit reports and scores on consumers. Consumer protection laws as they apply to credit and credit card use are also covered.
At the 4th grade level, students begin to understand that investment means using resources to expand an individuals or businesss abilities to produce in the future. A financial investment is using ones savings to purchase financial assets with the goal of increasing ones income and/or wealth in the future. At the 8th grade level, students will understand the variety of possible financial investments and be able to calculate rates of return. At the 12th grade level, students are expected to be able to explain the relevance of and to calculate real and after-tax rates of return. They will be able to discuss how markets cause rates of return to change in response to variation in risk and maturity. Students will explain how diversification can reduce risk. Students will understand how financial markets react to changes in market conditions and information.