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Specialist High Skills Major (SHSM)


This CLA is missing the following components from the template:

o Assessment and Evaluation of Student Achievement
o Accommodations
Contextualized Learning Activities (CLAs)

For the other required credits in the bundle of credits, students in a Specialist High Skills Major
program must complete learning activities that are contextualized to the knowledge and skills
relevant to the economic sector of the SHSM. Contextualized learning activities (CLAs) address
curriculum expectations in these courses.

This CLA has been created by teachers for teachers.

It has not undergone an approval process by the Ministry of Education.
Contact Information
Development date
Contact person

Near North District School Board

June 30, 2008
Karin Podlatis-Brown
Secondary Program Coordinator/SHSM Coordinator

Specialist High
Skills Major


Course code
and course title

MBF3C Foundations for College Mathematics

Name of
Personal Finance

Specialist High Skills Major (SHSM)

Brief description

Part 1 - Students will be introduced to the theory of Simple Interest

Part 2 - Simple Interest (Sequence and Excel Spreadsheet
Part 3 - Compound Interest
Part 4 - Compound and Simple Interest Comparison with Mortgage
6 Hours


B1 Compare simple and compound interest, relate compound

interest to exponential growth, and solve problems involving
compound interest.


expectations (if
Essential Skills
and work habits

Determine, through investigation using technology, the

compound interest for a given investment using repeated
calculations of simple interest, and compare, using a table of
values and graphs, the simple and compound interest earned for
a given principal (i.e. investment) and a fixed interest rate over
Determine, through investigation (e.g., using spreadsheets
and graphs), and describe the relationship between compound
interest and exponential growth.
Calculate the total interest earned on an investment or paid
on a loan by determining the difference between the amount and
the principal [e.g., using I = A P (or I = FV PV)]

Reading Text
Document Use
Computer Use
Money math
Working Independently

Specialist High Skills Major (SHSM)

Instructional/Assessment Strategies
Teachers notes

Students will be able to identify the skills learned in these lessons to real life
investments in the future.

Assessment and Evaluation of Student Achievement


Assessment tools


Specialist High Skills Major (SHSM)

Additional Notes/Comments/Explanations
Showing the students how simple and compound interest work in both debt and
savings will provide a more practical understanding than only illustrating one or the
Part 1 Simple Interest
- Introduce the activity by discussing the concept of tipping a waiter/waitress.
o See Appendix A Student Tip Question
o Use Appendix A as an overhead or within a PowerPoint Presentation.

Ask students about any debt they may have with a bank or financial institution
(e.g. credit card)

Ask student about any savings they may have

o Explain that the debt and savings they have both have interest applied to

Introduce the formula for Simple Interest

o I = Prt (See and distribute Appendix B Simple Interest Handout)
I = Interest
P = Principal
r = Rate
t = Time
o Go through an introductory question on the board for investment using
simple interest for a minimum of 10 years at 5% on a chart

Have the students fill in the chart.

Ask how much the total investment is after 10 years.
Graph the results using a line graph and Chart paper if available.
Excel Spreadsheet would be optimal.
Ask what the students can identify about the line graph.
They should point out that it is straight (Linear) and in an
upward (positive) direction.

o Complete a similar table but in terms of debt and have students complete
for homework.

Part 2 Simple Interest (Sequence and Excel Spreadsheet Application)


See Appendix C Lottery Winner handout

o Use this appendix as your guide for the lesson.

Specialist High Skills Major (SHSM)

o Supply students with the spreadsheet file named Simple Interest
Amortization in the CLA folder. This can be done via the teacher website
or by sharing the file on a network drive at school. This file is also
available at the following web address:

o Have students answer questions in Appendix D Simple Interest

Amortization Spreadsheet Worksheet.
Part 3 Compound Interest
- If P dollars are deposited for n compounding periods per year for t years at a
rate of interest r per period, the compound amount A is

A = P(1 + r/n) nt
Have students complete the tutorial on a computer with headphones.
o The link is:

In the following Excel exercise, have students examine the effects of changing the
compounding periods each year for the following problem.
Suppose that $2000 is invested at a rate of 8% for 10 years, what are the compound
amounts for the following compounding periods? ( Have students complete their own
charts in excel or on paper)
Every second-31,536,000

Specialist High Skills Major (SHSM)

Part 4 Compound and Simple Interest Comparison with Mortgage Application


See Appendix E and use as a template for the lesson.

o Use Student Worksheet in Appendix E

Authentic workplace materials

Human resources

o Microsoft Excel
o Microsoft Word
o Web Browser

Specialist High Skills Major (SHSM)


List of Attachments

Appendix A Student Tip Scenario

Appendix B Simple Interest Handout
Appendix C Lottery Winner
Appendix D Simple Interest Amortization
Appendix E Simple and Compound Interest Comparison with Mortgage
Application (removed due to copyright infringement)

Specialist High Skills Major (SHSM)

Appendix A Student Tip

In a restaurant in Ontario the industry standard of tipping
the waiter/waitress is 15% of the subtotal of the bill. If
you bill subtotal was $24.83, how much should you
leave the waiter/waitress?

Specialist High Skills Major (SHSM)

Simple interest is only calculated on the principal unlike compound interest which
is calculated on the principal and on all the previous interest. We will discuss
compound interest in upcoming classes.

Formula for Simple Interest:

I = Prt


I is the interest in dollars

P is the principal
r is the rate in decimal form
t is the time

* note: the time and the rate must be measured in the same time period. For
example if you were offered $12/yr how much would you get per month? $1.
Find the amount if a person invested $100 at 10%/a simple interest for 6 months.
Given Information:
I =?
P = 100
r = 0.1
t = 6 months (but the rate is per annum
or in years)
= 0.5 years

I =Prt
= 100 0.1 0.5
The total amount would be 100 + 5 =
$105 in 6 months.

Specialist High Skills Major (SHSM)

Simple Interest
You have just won a lottery. What would you do with a Million Dollars?
Consider putting it into the bank. The bank will allow you to earn interest on your money. One
type of account is called a simple interest account.
Simple Interest is calculated using the formula I = Prt, where:
l is the interest
P is the principal amount of money you put into the account
r is the annual rate of interest that you get (changed into a decimal )
t is the time that the money is in the account (and is measured in years).
Problem 1: Consider $1 000 000 in the account that pays 2%/a (per annum or per year). You
leave the money in for one year. What is the interest you make and the total in the account?
Hint: Always list your variables before
you go to substitute them into a
P= 1 000 000
I = the variable we are looking for
r = 2% which is 0.02
t = 1 year

I = Prt
= 1 000 000(0.02)(1)
= 20 000
After one year the amount in the account
would be 1 020 000.

Lets look at this situation and answer the following questions.

Calculate the interest earned after 2 years in the account (note t =2 and nothing else changes).
( 40 000 )


Specialist High Skills Major (SHSM)


Determine the balance in the account after the second year.

( 1040 000 )
Write a sequence that represents the balance in the account for each year from 1 to 10.
(1020000, 1040000, 1060000, 1080000, 1100000, 1120000, 1140000, 1160000, 1180000,
1200000 )
What is the interest and the balance in the account after 10 years.
( interest = $200 000, balance = $1 200 000 )
Note: In an arithmetic sequence the terms increase or decrease by a constant amount. In this case
they increase by 20,000 each year. This constant amount, the common difference, is equal to Pr
or the principal times the rate.
If we were asked for the amount of money in the account in the 9th year ( t9 ). We could use the
general term formula. tn = a + (n - 1)d
t1 = a = 1,020,000

t9 = a + (9 1)d


= 1 020 000 + (8)(20 000)

d = 20 000

= 1 020 000 + 160 000

= 1 180 000

Problem 2: I borrowed $4000 from the bank at a rate of 6.5%/a (per year) for 5 months. How
much must I repay in interest and in total?
Hint: Always list your variables before
you go to substitute them into a
P= 4000
I = the variable we are looking for
r = 6.5% which is 0.065 for a year
t = 5 months or 5/12 years

I = Prt
= 4000(0.065)(5/12)
= 108.33
After 5 months you would have to repay
$4108.33 ( P + I )

Specialist High Skills Major (SHSM)


Appendix D - Simple Interest Amortization Spreadsheet

Using the Excel spreadsheet named Simple Interest Amortization, answer the
following questions:
1. If the interest rate is 7% how much must be paid per month.
Show your work.

2. How many months will it take for the mortgage to be paid in

with the original numbers in the spreadsheet?

3. Sketch the line graphs below with 180 Number of periods and
250 (Include a legend).

a. What main difference do you notice between the two


4. How many years will it take to pay off the mortgage at 180

Specialist High Skills Major (SHSM)


5. In cell D5, the interest rate is listed as 0.58% but when that
cell is selected, the formula bar displays =7%/12. If the
interest rate is divided by 12 what does this imply about the
Total # of Periods (Nper).