> Teaching Interest Rates: Lesson Plan and Worksheet
> Source: https://interestratedecision.com/teaching/ · Content last changed: 2026-11-09
> InterestRateDecision.com: free to quote with a link to the page above.

A free 45-minute lesson on how central banks set interest rates, with a printable worksheet and answer key built from real decisions (1,487 across 10 banks).

# Teaching interest rates

A free 45-minute lesson on how central banks set interest rates and what a decision means, with a printable worksheet and answer key built from real decisions.

[Download the worksheet and answer key (PDF)](https://interestratedecision.com/reading-a-rate-decision-worksheet.pdf)

## What students will be able to do

-   Say what a central bank’s policy rate is and who sets it.
-   Convert between basis points and percent, and read a hike, a cut or a hold from two rates.
-   Explain the difference between a decision and a surprise, and why the surprise is what moves markets.
-   Work out roughly what a rate change does to a variable-rate loan payment.

## A 45-minute plan

1.  **Hook (5 min).** The next decision of all is the RBA’s on Dec 8, 2026 at 2:30 PM Sydney. Ask what students think will happen, and what would count as a surprise.
2.  **Teach (10 min).** The policy rate and basis points ([basis points to percent](https://interestratedecision.com/basis-points/)), then how a rate reaches loans and savings ([what happens when the Fed raises or cuts rates](https://interestratedecision.com/what-happens-when-the-fed-raises-or-cuts-rates/)).
3.  **Worksheet, Parts 1 and 2 (10 min).** Reading the Fed’s last eight decisions and converting basis points.
4.  **Worksheet, Part 3 (10 min).** Expected against actual, using the most recent surprises. See [how often central banks surprise](https://interestratedecision.com/blog/how-often-do-central-banks-surprise/).
5.  **Worksheet, Part 4 (5 min).** A borrower’s payment before and after a cut; students can check it in the [rate cut calculator](https://interestratedecision.com/rate-cut-calculator/).
6.  **Discuss (5 min).** Part 5’s questions; notes for the teacher are on the answer key.

## Pages to use with the class

-   [Central bank rates today](https://interestratedecision.com/central-bank-rates/): every rate on one table.
-   [The calendar](https://interestratedecision.com/calendar/) and [this week’s decisions](https://interestratedecision.com/this-week/): live examples.
-   [Fed funds rate history](https://interestratedecision.com/fed/rate-history/) and [Fed rate cuts since 2008](https://interestratedecision.com/fed/rate-cuts/): every move, for a class project.
-   [The open data](https://interestratedecision.com/central-bank-data/): 1,487 decisions as CSV, free to use with a link.
-   [The glossary](https://interestratedecision.com/glossary/): every term in a sentence or two.

## Questions

Is the worksheet free to use in class?

Yes. Print it, copy it and hand it out; there is nothing to sign up for. A link back to this page is appreciated but not required.

Are the figures on the worksheet real?

Yes. The decisions in the table and the surprises in Part 3 are read from the economic calendar this site uses and are refreshed with it, and the answer key is worked out from the same figures, so the key always matches the sheet. Check any figure against the central bank’s own site.

What level is it for?

Introductory economics, business studies or personal finance at upper secondary or first-year university level. It needs percentages and simple algebra, nothing more.

Is it matched to a curriculum or exam board?

No. It is not tied to any curriculum, so check it against yours before relying on it.

Does it give investment advice?

No. It teaches how to read a decision. Nothing on it tells a student what to buy or sell.

By Forexia

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