This lesson will show students why compound interest is so helpful to investors!
Students will be given an initial investment and a yearly interest rate. Each student in the class can have different values so they have to do their own work and so comparisons can be made.
Students carefully calculate the amount of compound interest they would earn over ten years. They check their work using the compound interest formula. Then they can use the formula to calculate compound interest for longer periods of time.
Your class can compare their results. I would recommend having a class discussion (prompt questions are included).
Finally, students reflect on their learning by writing a paragraph after the lesson, and hopefully leave class wanting to start a saving account!
This step-by-step lesson clearly shows students how compound interest works. They get practice doing calculations with percents written as decimals, exponents, and order of operations. It is the kind of math lesson that will stay with students long after the year is complete!