Mokia-0 - Borrowing Money

Suggested teaching time

1½–2 hours

Maths warm-up suggestion

Recap percentage multipliers, compound and simple percentages. A recap on percentage change and reverse percentages could also be completed.

Ask students to complete this question on paper:
If you borrowed £1000 from a bank which charged 10% interest per month, and you paid back a monthly instalment of £200, how many months would it take you to repay the loan?’

Students should then hopefully see the benefits of completing these calculations in Excel.


  • In this lesson students have to look at three banks’ offers and figures to decide which one is best for the company to borrow from. Ask students how they can decide which the best bank is.
  • This then should lead back into the project work. The multiple-choice questions at the start are to highlight the differences between interest rates and APR so students are aware of and familiar with these terms.
  • Students are provided with the offers from all three banks, including their monthly interest rate, monthly repayments and how many years they have in which to pay back the loan.
  • It should be highlighted to students that it is a monthly interest rate, not daily, since this project is focusing on monthly intakes and payments.
  • A discussion regarding the depreciation of interest over time should take place, with an example showing that as more of the loan is paid off, the interest paid each month should decrease.

Steps to success

  • Step 1: Create an Excel sheet with the figures for each bank over the years.
  • Step 2: Look at the total interest paid for each bank and decide which is the best deal.
  • Step 3: Display all three banks’ data on one graph to compare.
  • Step 4: Choose which is the best bank and why.

Suggested scaffolding

An outline of the spreadsheet can be emailed to students. The first bank could have also been started.

Suggested extension

Students to represent the monthly interest using the graphing function in Excel.

Or students can represent the money owed over time.

Plotting all three banks on one graph provides an effective visual representation.