# Activities

• • • ##### Subject Area

• Math: Algebra II: Logarithms and Exponentials
• Math: Precalculus: Exponential and Logarithmic Functions

• ##### Author 9-12

60 Minutes

• ##### Device
• TI-83 Plus Family
• TI-84 Plus
• TI-84 Plus Silver Edition
• ##### Other Materials
This is Activity 5 from the EXPLORATIONS Book:
Time, Value, Money: Applications on the TI-83.

• ##### Report an Issue

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
• #### 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