1. Business Math

2. Calculating Interest Rates

3. Standards
BCS-LEB-14: The student identifies the elements needed to develop a financial plan and to obtain business financing.

4. Agenda Bell Ringer: Scholarship Screenleap College Credit Now Recap
Essential Questions
Assessment

5. Essential Questions How do businesses use math everyday?
How can technology be use to mathematically predict success or failure?

6. Scholarships Shell Oil Company Technical Scholarship Program
$2,500-$5,000
Engineering/Math

7. Interest Earned
Interest: amount of money that can be earned on money that is invested or borrowed

8. Why is Interest Important?
Money Invested
Money Paid on Borrowing
Two types of Interest
Simple
Compound

9. Simple vs. Compound Interest
Simple: End of Year
One time per year
Avg. Principal Balance
Compound: paid on principal + earned interest
Daily, Monthly, Quarterly, Semi-or Annually
More the better

10. Simple Interest Paid at the End of Each Year One time per year
PRINCIPAL ONLY
Investment X Rate = Interest Earned
$ X 5% = $5

11. Compound Interest Paid on Interest and Principal Annually
Semi-Annually
Quarterly
Monthly

12. Side Note: Compound Interest is the secret to wealth creation
Click Compound Interest Calculator Link

13. Calculating Simple Interest
Principal $100, Interest Rate 3%
$100 x 0.10 = $10
End of the year = $110
Year 2: $120
Year 3: $130
Year 4: $140

14. Calculating Compound Interest (monthly)
Principal $100, Interest Rate 10%
Monthly Interest = 10%/12 = 0.833%
Month 1:
Month 2:
Month 3:
Month 4:
Month 5:
Month 6:
Month 7:
Month 8:
Month 9:
Month 10:
Month 11:
Month 12:
Is this a big deal $110 vs. $ ?

15. What happens over time?
Simple
Compound
5 Years 10 Years 15 Years 25 Years 30 Years 40 Years 50 Years 60 Years
$ $164.53
$ $270.40
$ $445.39
$ $1,205.70
$ $1,983.74
$ $5,370.07
$ $14,536.99
$ $39,353.24

16. Assessment
Use Microsoft Excel to create a simple interest vs. compound interest calculator. Follow screencast directions?

17. How To