Application Lesson Plan

Linda Johansen, Hailey Larson, Huck Stewart Objective: Given a real-life problem, the student determines how, if at all, a solution to that problem is facilitated by using the following formula for compound interest where A=the accumulated amount, P=the principle, r= the annual rate, k= the number of times per year the interest is compounded, and n=the number of years: (application) Stage 1: Initial Problem Confrontation and Analysis I confront the students with the following two scenarios: 1. I am planning on going on a vacation with my family this summer, so I am saving up some money. I have a tin in my dresser that I put $50 in every payday (once every two weeks). How much money am I going to have saved for the vacation after twelve weeks of saving money this way? ($50x12=$600) 2. This year I opened up a savings account to save money for Christmas presents. In January, I put $200 in the account as an opening balance. The bank manager told me that my savings account will get 5% interest, and that they compound the interest once a quarter. I completely forgot about the account, so I havent put any more money in it. It is now May. How much money is in my account? ( I will ask the students to individually think about how they can help me solve my two dilemmas. Then, as a class, we will discuss how we should go about solving these two problems. Students will recall the formula discovered earlier on in the unit about how to calculate an amount given a principle, rate, compound rate, and time. We will discuss the differences in these two problems that help us know what formula to use. Stage 2: Subsequent Problem Confrontation and Analysis When I feel the students have a good grasp of why we solved the previous two problems the way we did, I will give them the following two problems to be worked in small groups. These problems will provide good practice for the students to decide what mathematics to apply to a specific problem and will allow me as the teacher to see who has a good grasp on the application concept we are learning. 1. How long will it take a $5000 investment to double if it is invested in a bank that pays 7% interest and is compounded quarterly? (about 10 years) 2. You open a college savings account when you are five years old. You put the $25 your grandma gives you for your birthday that year in it as an opening balance. The savings account has 7% interest and is always compounding. You never put any more money in the account. How much money will the account have when you turn 18 and ready to go to college? ( )

We will have a class discussion about how each group solved each problem. We will discuss similarities and differences in the two problems and what tactics groups used to solve each problem. I will use this as a gauge to see how well students are achieving the objective. If students have a high achievement, I will assign some harder homework problems. If students are struggling to see when to apply the general formula for compound interest, I will assign a few more problems that are simpler and easier to see the differences between. Stage 3: Rule Articulation Since the students had discovered for themselves and each other from the previous lesson plan when to apply the compound interest formula we will take this time (while we are still comparing our methods as a class) to re-state the rules of when to apply the formula. Specifically; we will mention and solidify what each variable/constant represents in the formula and they will be able to write this down in their notes or on the worksheet. Through a brief informal analysis of their comprehension level of the rules, once we discover they have a good grasp on the rules we will move on from the lesson. That informal observation will be made by us as the teacher asking questions at random to the students about the compounding interest function OR simply by listening to the self engage discussion between themselves as peers. Stage 4: Extension into Subsequent Lessons As part of our classroom management we will use similar mini-experiments during our opening day questions (bell ringers). Further more we plan on using this as a whole sum of a lesson of budgeting that we will use with the class in less than a week. They will learn the ideas behind budgeting and money management and use this compound interest formula in their budgeting role-play lesson. Additionally we will mention that this formula will be needed during several future tests/quizzes. Mini-Experiments Prompt: For the following problem decide whether you should use the formula for compound interest or not: Each day Susan comes home from work and puts $5 in a jar for her vacation fund. After 26 months how much interest will she have earned? Observers Rubric: No. Putting money in a jar is not an example of earning interest. Prompt: For the following problem decide whether you should use the formula for compound interest or not: Suppose Karen has $1000 that she invests in an account that pays 3.5% interest compounded quarterly. How much money does Karen have at the end of 5 years?

Observers Rubric: Yes, the problem deals with interest that is compounded.