Education Technology

Compound Interest

Published on 06/09/2008

Activity Overview

In this activity, students use the TI graphing calculator to calculate compound interest. They understand that in compound interest computations, the interest from the previous period is added to the current principal and the new total is used as the basis for calculating the interest.

Before the Activity

  • Select TVM Solver from the calculator menu
  • See the attached activity PDF file for detailed instructions for this activity
  • Print page 11-12 from the attached PDF file for your class
  • During the Activity

    Distribute the page to the class.

    Follow the Activity procedures:

  • Calculate the future value of investments that earn interest compounded annually, quarterly, and monthly
  • Enter the values for the total number of payments (N), annual interest rate ( I%), present value (PV), number of payments per year (P/Y) and number of compounding periods per year (C/Y)
  • Calculate the final value of the investments
  • Calculate the amount to be invested that will have a specified future value when invested under defined conditions
  • After the Activity

    Review student results:

  • As a class, discuss questions that appeared to be more challenging
  • Re-teach concepts as necessary