The Time Value of Money

This The Time Value of Money video also includes:

Your car-loving or money-loving learners will enjoy this quick video on the time value of money (interest) presented in two scenarios about investing a bonus check to increase its future value in order to buy a favorite car. The formula for investing a current value of money to increase it to a future value by earning interest (the time value of money) is presented using simple, engaging graphics. Simplifying the future value formula and analyzing its connections to real-life concepts like time and interest is included.

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CCSS: Adaptable
Instructional Ideas

  • Use as the introduction to interest rate problems, or a lesson on investing money wisely or demonstrating the cost of borrowing money
  • Use as part of a flipped classroom by instructing learners to watch this video outside of class in preparation for a lesson on the future value in a bank account or interest rate problems
  • Instruct learners to research a car they would like to purchase and compare the price paying cash verses borrowing money to buy the car
Classroom Considerations

  • Key up the video ahead of time to make sure everything works and learners will be able to see and hear well
  • Instruct learners to write the formula that is in the video in their math notebook, and possibly have a couple of scenarios prepared for them to practice using the formula on their own or collaboratively in a group
Pros

  • Quick, simple, engaging video 
  • Nice visual of the development of the formula that calculates the future value of a bank account
Cons

  • None
Common Core