Activity Overview
Students examine the long term effects of inflation. They compute the increase in cost price due to compounding of inflation rates every year. They recognize that this increase in cost price is exponential.
Before the Activity
See the attached PDF file for detailed instructions for this activity
Print pages 9 - 20 from the attached PDF file for your class
During the Activity
Distribute the pages to the class.
Follow the activity procedures:
Use the calculator to multiply the current cost price by the inflationary factor to get the increased cost price after one year
Determine the increased cost price for each additional year [compounding inflation]
Record the data in a table
Determine the number of years it takes for the cost to double due to inflation
Enter the data as a list
Set up a scatter plot of the increased cost price as a function of the number of years of inflation
Observe that the graph rises from left to right and indicates that as the number of years increases, the cost price also increases
Repeat the activity for another inflationary rate and compare the effects of the two rates of inflation
Find the approximate number of years it takes for an item to double in cost at various inflation rates
After the Activity
Students complete the data sheet and answer questions.
Review student results
As a class, discuss questions that appeared to be more challenging
Re-teach concepts as necessary