These classroom activities can be used to teach math skills and educate students about savings and investments. It is recommended to use a combination of individual and group activities to encourage students to learn the material.
Activity: Calculate Simple Interest
In this activity, students will be given a series of math word problems involving simple interest. The problems will range from issues of immediate concern (e.g. what interest will I earn if I deposit my allowance into the bank?) to more long term concerns (e.g. what simple interest would be obtained on savings of $1000).
Activity: Calculate Compound Interest
Since many investment products and savings accounts offer compound interest, it is important students understand how this type of interest differs from simple interest. Suggested math word problems to explore this concept should use different time periods (e.g. 1 year, two years and five years). In addition to the saving allowance idea mentioned above, teachers may wish to include an example on saving money for college.
Activity: Saving For A Goal
Much of saving and investing involves giving up spending today for greater rewards in the future. Mastering this concept may be difficult for students to appreciate. This activity involves math questions that ask students how long it would take to save for a desired item like a computer or bicycle. This applied example will show students how interest can help them achieve their goals.
Activity: Learn Basic Investment Options
In addition to savings accounts and certificates of deposit, many people invest in stocks and bonds. In order to keep the math accessible to students, focus on U.S. government bonds. In this activity, students will be assigned some educational or introductory materials from the U.S. Treasury, SEC or other reliable agency. Important concepts to cover include the different rates offered by bonds and the varying maturity periods (e.g. five year and ten year bonds) typical of bonds.