Finance

In this module, students will explore the mathematics of finance. They will start by looking at paychecks and the deductions taken from their hard-earned money. They will then examine how money grows due to different kinds of interest earning strategies. Also, they will see how much a car loan or a home mortgage really cost. Finally, they will devise a retirement plan. Lesson 1 Payroll Students work with IRS instructions to compute withholding taxes, as well as other withholdings, for a company payroll. Lesson 2 Simple Interest Students become familiar with the vocabulary used in the remaining lessons. Students compute simple interest and examine simple interest as a linear process. Lesson 3 Annual Compound Interest Students are introduced to compound interest as an iterative process based on simple interest. Students compare compound interest with linear, quadratic, and exponential processes and learn that it is exponential. Nitty Gritty: Solving equations using logarithms and roots. Lesson 4 General Compound Interest Students show how changing the number of compounding periods affects the future value of an account. They develop the continuous compounding formula. Lesson 5 Stream of Deposits Students develop the formula for the sum of a finite geometric sequence. They use this formula to determine the future value of a stream of payments. We consider the case of "annuity due." Lesson 6 Amortization Students combine the formulas for compound interest and annuities to develop the formula for calculating loan payments. Lesson 7 Retirement Planning Students combine several concepts in previous lessons to devise a retirement plan using estimates of life expectancy and interest rates. They determine how long the money they saved in Lesson 5 will last after retirement. An examination of inflationary effects would be an appropriate extension project. Compare this module to traditional course topics in the Matrix of Course Competencies. If one of the lessons has a link, you can preview that lesson. Other modules: Beat Ratios Functions Exp. Growth Data & Graphs Representing Data Finance Geometry Sampling Non-linear Behavior Linear Behavior Sets and Logic Patterns Probability Systems Right Tri. Trig.