During my grade 10 unit on exponents, right around the time a frustrated student asked, when am I ever going to use this!?, I promised to show my student how exponents can help them make money without doing anything. They were hooked!
This is the magic of compound interest! Money saved (or invested) with compound interest grows exponentially. Likewise, money borrowed with compound interest results in debt that grows exponentially. If this is unfamiliar to you or your students, this primer on compound interest offers a great introduction.
In this open-ended task, students explored compound interest. Specifically, students selected a principal amount for a loan (or investment) and then did a bit of research to find a suitable interest rate. They also selected a reasonable term for the loan (or investment). Students then used the compound interest formula to determine how their debt (or investment) would grow if the interest was compounded annually, monthly, weekly or daily.
Mathematically, this task allowed students to practice calculations with exponents. Students also got to practice communicating mathematical information, and using graphs, equations and tables to convey information.
In terms of financial literacy, students explored the frequency of compounding, which is a small thing (often listed in the finest of fine print the terms of a loan, investment or bank account) that can make a big difference.
I have always used financial math as a real-life context to engage my students in learning concepts such as place value, proportional reasoning and exponential growth, so I am thrilled that the new BC math curriculum includes a component of financial literacy throughout the program.
Below, I have listed some of the financial literacy learning outcomes for middle- and high-school grades, and I have linked to posts on my blog with relevant activities and resources. This is a work-in-progress, so be sure to come back to this site ever so often to see what’s been added.
My grade 6 unit on decimals and fractions was always a favourite for me and my students. My students loved it because they finally got to have a class party (is it just my students, or do your students always ask to have a class party?). I loved it because the students did all the work to plan the party and got lots of practice with decimals and fractions while doing it.
In my experience, I have found that teens love (1) their phone and (2) a heated debate. When my grade 8 students were studying linear relationships, I combined those two interests into a activity in which students critically evaluated advertisements for service plans offering free (or discounted) cell phones.
Do teens know the difference between saving up for a major purchase and borrowing for it? Do they know when it makes sense to borrow and when it’s more prudent to save?
I had my grade 8 students explore those questions during a unit on percents. In their favourite homework assignment of all time, I asked students to think of a major purchase they wanted to make before graduation (approximately four years away). Their choices were interesting an varied: concert tickets, iPhones, travel, clothes… Continue reading
As I was mulling over ideas for my grade 8 unit on percents, I stumbled across this graphic from the Centre for Policy Alternatives. It became the hook for my whole unit. Throughout the unit, each student worked with a unique (randomly-generated) income to calculate their taxes and produce a budget. Having entered their budget in a spreadsheet, students classified their expenses as needs and wants and then generated pie charts to compare the portion of their income devoted to each. Students were able to see right away that some had very little to spend on their wants, while others had a lot of discretionary income, despite their higher tax rates.
Students then modified their income based on one of the statistics in the graphic above and revised their budgets and pie charts to determine the effect of income inequality on women, aboriginal people and those who are visible minorities. It was interesting to see the observations that emerged. Students who had a higher income to begin with generally concluded that income inequality leaves women, aboriginal people and people from visible minority groups with enough to meet their needs but less to spend on their wants; however, some were able to predict what their classmates with lower incomes experienced first-hand: that income inequality affects low-income Canadians most, making it very difficult to meet their basic needs.
Are you interested in trying this with your class? Here are some resources…
- I used this random number generator to produce a unique income for each student
- After having students try their hand at calculating their federal and provincial tax liabilities, I let them use this short-cut from Simple Tax.
- Students created their budget in this Google Sheets template.
- Guided by this task sheet, students worked through the income inequality exercise. The rubrics in the task sheet are from the IB MYP framework, but could be adapted for use in other schools.