This activity is one based on something I got told about whilst at Uni. The resource is available for download from TES under Compound Interest in Egypt.
The premise of this activity follows the story of two slaves who helped build the Great Pyramid, and who invested their wage of a sinlge gold piece with a local Money Lender. They were given two options: Simple Interest at 100%; Compound Interest at 1%.
Students are then asked several questions relating to how much money each of the slaves has at various points. The questions are designed to make students think, so rather than just asking how much they have after 5 years, it asks how many years pass to double their money.
The worksheet then guides them through the rest of the story (which I hope was true, but somehow doubt), ending with the comparison of the two accounts after 4500 years.
I did this activity with my Year 9 class on Friday afternoon, to get them thinking in more depth about the difference between Simple and Compound Interest. We had an interesting discussion about when does the compound interest account become worth 2p. Is it when it first rounds up to 2p (so the first time it exceeds 1.5p), or the first time that the account truely exceeds 2p? You can decide which you think is more appropriate, and both types are included in the Excel document available with the resource.
After working out the answers manually, we discussed better ways to approach the problem in the modern world, and I revealed the Excel Spreadsheet. We discussed what I had typed in to each cell as a formula to generate the information, and this forced them to apply the Compound Interest formula to an Excel environment.
I have used this activity several times now, and it is one that always pleases the students. They like the story element of the activity, and the hope that it is true. It also gets them to really explore in a great depth what they know about the two types of interest, as they don't just use the formula, but must apply their knowledge.
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I am a maths teacher looking to share good ideas for use in the classroom, with a current interest in integrating educational research into my practice.