Syllabus Dot-Point(s)

Calculate compound interest for two or three years using repetition of the formula for simple interest

Lesson Goal

By the end of this lesson, apply their knowledge of simple interest to calculate compound interest for up to three years. This will be achieved by using repetition of the simple interest formula.

Outcomes

• MA5.1-1WM Uses appropriate terminology, diagrams and symbols in mathematical contexts
• MA5.1-2WM Selects and uses appropriate strategies to solve problems
• MA5.1-4NA Solves financial problems involving earning, spending and investing money

Working mathematically

• Connect the calculation of the total value of a compound interest investment to repeated multiplication using a calculator, eg a rate of 5% per annum leads to repeated multiplication by 1.05 (Communicating)
• Compare simple interest with compound interest in practical situations, e.g to determine the most beneficial investment or loan (Communicating, Reasoning)
• Compare simple interest with compound interest on an investment over various time periods using tables, graphs or spreadsheets (Communicating, Reasoning)

Class

Stage: 5.1

Ability: Mixed

Duration: 50 minutes

Introduction

5 mins

• Recap: Ask if students have any questions from homework assigned in the previous lesson. Quickly address any misconceptions. Explain and demonstrate working-out on the whiteboard. Students copy this into their exercise books.
• Briefly explain what will be learned during this lesson.
• Distribute Exit Slip to students

Activity

20 mins

Teacher explains and demonstrates a few related examples from their preferred textbook. In pairs, students will show full working out for compound interest calculations. Assist students in recognising that compound interest is the repeated application of simple interest.

Activity - DESMOS

20 mins

First, model compound interest via Desmos for students. Then, students will use geogebra to graphically explore the formula and answer calculation questions for compound interest. These exercises can be drawn from your preferred textbook. They will then compare and write an explanation about the difference between simple interest and compound interest graphically (see below) and via calculations.

Conclusion

5 mins

Homework: (1) assign related exercises in your preferred textbook. Remind students to label questions they have trouble with for clarification at the beginning of the next lesson. (2) Creative Component: Using notes taken during class and watching Eddie Woo's The Difference between Simple and Compound Interest, students are to design colourful posters OR study flash cards to test their peers and/or themselves for the yearly examination. Posters are to decorate an area of the classroom wall.

• Students share their saving achievements from The $5 Challenge with the class
• Students return completed Exit Slip (AFL)
• Students show completed homework from previous lesson

Additional Teacher resources:

• Casey Barnes - Youtube Video: Teaching Simple and Compound Interest
• PDF - Worked Examples + Explanation
• NAB Loan Repayment Calculator
• ABC Education - Video: What is Compound Interest?

Challenge Questions

Excelling students are to complete this section. Excelling students who have successfully completed class activities are to move onto this section.

Students complete the following:

• Khan Academy - Practice Exercises for finding Compound Interest
• Khan Academy - Word Problems for Compound Interest
• IXL - Practice Questions for Compound Interest

Future Directions

Educators are encouraged to keep a teacher’s journals for the following critical reflections, based on class observations and feedback from exit slips:

What went well, and why?

Did students understand the concepts?

Were students engaged?

What improvements can be made, and how?

Which students may require extra support, and how?

Which students may require more challenging content?

Are there additional resources that can be added to this lesson?