Interest Rates and How They Affect Your Money

This video covers the following learning objectives:

• Understand how interest is calculated

  • Differentiate between simple and compound interest

  • Apply formulas to calculate interest earned or owed

• Compare borrowing and saving rates

  • Recognize why borrowing rates are typically higher than saving rates

  • Understand the implications for personal financial decisions

• Explain the impact of central bank policy on consumer rates

  • Understand how the Bank of Canada’s overnight rate influences loan and deposit interest rates

  • Identify the downstream effects on mortgages, credit cards, and savings accounts

• Analyze real-world financial decisions using interest comparisons

  • Evaluate whether to save or repay debt based on interest rate differentials

  • Use real examples to assess the cost-benefit of interest-bearing products

• Understand the effect of inflation on savings

  • Define real rate of return

  • Recognize that low interest rates during high inflation can erode purchasing power