How it works
A loan is coins we borrow and agree to pay back. It is bigger than a borrowed pencil, so it has an agreement: a plan that both people say yes to.
Bea wrote it on paper: how many coins, how long and how often. Nico borrowed ten coins, to pay back over three weeks.
Bea added one extra coin in all for waiting. That extra coin is called interest.
If a plan gets hard to keep, talk to the lender early. It is better than going quiet.
Worked examples
The parts of Nico's loan
- How many: ten coins.
- How long: three weeks, a little each week.
- The price: one extra coin, called interest.
- The plan: written on paper, and each of them keeps a copy.
Adding up what Nico paid
- Week one: 4 coins. Week two: 4 coins. Week three: 3 coins.
- 4 + 4 = 8, and 8 + 3 = 11.
- Nico paid back 11 coins in all.
Finding the interest
- Nico borrowed 10 coins and paid back 11 coins.
- 11 − 10 = 1.
- The interest is 1 coin, the extra coin for waiting.
A loan or a gift?
- A gift has nothing to pay back, so it is not a loan.
- A loan is coins borrowed with a plan to pay them back.
- If the plan gets hard, tell the lender early.
A taste of the worksheets
These are some of the questions on the sets. The printable sheets have more and an answer key.
- Circle every part of a loan. How many coins are lent / How long to pay back / A free gift with nothing to pay back / The extra coin for waiting / A paper that each person keeps
- True or false? Bea wrote the loan on paper and read it out loud.
- True or false? Fix the mistake: Nico says a loan is a free gift. He is right.
- 🕒 A plan gets hard to keep. What is the better thing to do? Go quiet and hope Bea forgets / Hide from Bea / Talk to the lender early
- Which one is part of a loan? 🎉 a surprise party / 🎁 a free gift with nothing to pay back / 🔁 how often to pay
Words to know
- loan
- Coins we borrow and agree to pay back.
- lender
- The one who lets others borrow coins.
- borrower
- The one who takes the coins and pays them back.
- interest
- The extra coin paid for waiting.
- agreement
- A plan both people say yes to.
Watch out for
- A free gift is not a loan, because nothing is paid back.
- Interest is only the extra coin, not everything Nico paid back.
- A loan is written down and both people say yes. A secret is not part of a loan.
- Going quiet when a plan is hard is worse than talking to the lender early.
Try it
Nico borrowed 10 coins and paid back 11. What is the interest?
1 coin. 11 − 10 = 1, the extra coin for waiting.
Who is the lender, and who is the borrower?
Bea lends and Nico borrows. A lender lets others borrow coins, and a borrower takes them and pays them back.
Name two parts of a loan.
For example how many coins and how long to pay back. A loan has a size, a plan, a time and a price.
Nico's plan gets hard to keep. What is better to do?
Talk to the lender early. It is better than going quiet, because then they can make a new plan together.
For grown-ups
With a grown-up, say what a loan is in your own words, and make a list of questions to ask before agreeing to one.
The coins here are pretend. Ask your child what they would want to know before agreeing to a loan: how much, how long, and what extra? Real loans are a grown-up matter.