How does a bank make money? That is the question at the based of a lesson that explores the methods banks use to calculate interest. Groups compare the linear simple interest pattern with the exponential compound interest pattern. 

Concepts

simple interest, compound interest

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Additional Tags

math

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Instructional Ideas

• Create collaborative groups to work through the simple interest and compound interest examples; ask groups to make a statement comparing and contrasting the two types of interest
• If learners have difficulty writing the equations, have them create tables of values and examine the patterns

Classroom Considerations

• A review of percents may be necessary depending on student backgrounds
• The fourth in a series of 36 related resources

Pros

• Analyzing the two types of interest allows for a comparison of linear and exponential patterns
• All handouts, keys, and a teacher guide are included

Cons

• None

Common Core

HSF-IF.A.1 HSF-IF.A.2 HSF-IF.A.3 HSF-IF.B.6 HSF-BF.A.1.a HSF-LE.A.1.a HSF-LE.A.2 HSF-LE.A.3 MP1