Interest and Loans

During Algebra 1 (which is a combo of 8th & 9th graders) we work on an ongoing yearly analysis of loans, payment plans, etc.  We use google docs as a landing page, with individual lessons linked to it; from those documents we create essays that address the questions in each of the lessons.  Everything is about the interest we pay on loans and other things.

What I am reflecting on is a combo of  where this project fits into the CCSS and my student's beliefs that stores, or vendors would not charge interest for a long payment plan.  The lesson we just completed is about "Crazy Eddie" who sells a $2499 TV for only $66 per month (Lesson 7).  The assignment is to determine, or give an estimate on the number of months and what interest Eddie charges. 

Now you can tell I did not provide enough info, but my students are to make and defend their guesses in the essay.  I do not grade for correctness, but just the essay format and the student's use of math as a base for their conjuctures.

Nearly all my students, except for a couple always guess the payments at 38 months.  Their math is $2499/$66 per month = 37.9 months and they round to 38, a few even round down!  And they think Crazy Eddie will only take $9 in total interest in 38 months, over 3 years! (38 months*$66/month = $2508;  $2508-$2499 = $9 interest)

This lesson is "taken" from a Rent-to-Own situation.  The actual plan is 5 years, or 60 months.  The next lesson when they analyze the actual plan is really "eye-opening" for many students.  It is funny the anger they get for Eddie, and the interest rate on the plan is less than some credit cards!

This is the things we should all teach.  All of these students had done simple and compound interest, yet they had no real world feel for how interest really works.  Yet as I plan my curriculum it would be hard to keep these lessons based upon the huge amount of standards we are now being expected to teach (now "a mile wide, and 6 inches deep!").  I am going to keep these money units and push a lot of the CCSS to PreCalculus, because the math and the understanding is just too important.

Because really understanding interest is way more important than Cramer's Rule, matrices, or proofs.

"Your job is school." Student reply "I don't get paid." Yes they do....

I have one rule in my classroom.  Our classroom is our workplace.  A workplace itself has a large set of inherit rules that make my classroom run.  I then mention that teaching is obviously my job and their job is learning,  And every year I can count on one student saying "No it is not mmmyyyy job, I don't get paid."  And I reply "Yes, you do."

It leads to a discussion that I allow to happen each day for a few minutes for several class periods and ends with the students receiving their first open ended project.  (I let the discussions occur until nothing new is said).

The assignment is to research what a High School diploma is worth over the student's lifetime.  Then calculate the "pay per hour" to earn that degree.  It is done as an essay, including citing and supporting calculations.

For round numbers there is a 300K difference in lifetime earnings between a HS grad and an non-HS grad.  Then assume 40 hour per week with homework, 38 week per year (rough) and 4 years to graduate.  And you end up with $300,000/(40 hr/wk*38 wk/yr*4yr) = $49/hr.   


And while the students joke about it, I believe it really helps for the students to see the value in HS.

It is just deferred compensation......