Activity Detail

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	Effective Annual Rate & Nominal Rate

Activity Overview

In this activity, students use the effective annual rate calculation to compare the nominal rates of various financial instruments.

Before the Activity

Select TVM Solver from the calculator menu

See the attached PDF file for detailed instructions for this activity

Print page 13-14 from the attached PDF file for your class

Activity Downloads:

(file types)

TimeValueMoney_TI83_Act05.pdf

During the Activity

Distribute the pages to the class.

Follow the Activity procedures:

Calculate the effective rate using the nominal interest rate and the number of compounding periods per year

Use the effective rate calculation to compare the yield for simple interest earnings versus compound interest earnings

Calculate the nominal interest rate given the effective rate and the number of compounding periods per year

After the Activity

Review student results:

As a class, discuss questions that appeared to be more challenging

Re-teach concepts as necessary

Other Downloads

view standards alignment
view textbook alignment

Subject Area:
Math : Precalculus / Trig : Exponential Functions
Math : Algebra II : Exponential Functions

Author:
Texas Instruments

Level:
9-12

Activity Time:
60 Minutes

Device:
TI-83 Plus Family, TI-84 Plus Family

Apps:
Finance

Software:

Accessories:

Other:
This is Activity 5 from the EXPLORATIONS Book:
Time, Value, Money: Applications on the TI-83.

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