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. 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.