MORTGAGES LESSON PLAN TEACHING MONEY CONCEPT LEARNING CALCULATING INTEREST FINANCE ECONOMIC PRINCIPLES BUSINESS MATH ACTIVITY SAMPLE EXAMPLE HELP STUDENTS PRACTICE TEACHER FINANCE SKILLS ONLINE COURSE

 Students learn about home mortgages and calculating interest.

# MORTGAGES AND INTEREST

Topic:  Mortgages and Compound vs. Simple Interest

Concept:   Understand the concept of mortgages and compound interest.

Objectives:

1. Understand and define the concept of compound interest
2. Compare compound interest to simple interest
3. Understand how to calculate compound interest
4. Discuss the relationship between PV and compound interest
5. Understand and define the concept of mortgages
6. Understand how to calculate mortgages

MORTGAGES AND COMPOUND INTEREST LESSON PLAN

Teaching Materials

• Lesson - Mortgages and Compound Interest  (see below for printable lesson)

• Examples of Current Mortgage offers – brochures, websites, etc.

• Many pre-calculated interest examples

Lesson Activity

1. Discuss personal wealth
1. Ask for examples of ways it is accumulated
2. Discuss maximizing interest as a prime way to build wealth
2. Review Simple Interest
1. Use the FV concept to create the formula:
2. Work through examples
3. Review Compound Interest
1. Use Formula:
2. Work through same example as Simple Interest but with compounding interest
4. Compare the two methods
1. Discuss impact over time
2. Calculate the difference in return rate
5. Discuss compounding frequency
1. Work through examples above with different compounding periods
6. Discuss the relationship between the compound interest formula and the PV formula
1. Inverses and interchangeable terms

→

1. Discuss Mortgage Application
1. Explain mortgages, ask for examples
2. Show how to use formula to calculate mortgage payments
3. Work through examples

Assessment/Evaluation
Have students complete worksheet. A passing grade is 70% or greater.

Print out the teaching lesson pages and exercise worksheets for use with this lesson:

 MORTGAGES AND COMPOUND INTEREST LESSON Lesson and worksheet. Do you have a recommendation for an enhancement to this business math lesson, or do you have an idea for a new lesson?  Then please leave us a suggestion. Back to more Banking and Saving Lessons     Back to more Basic Finance and Economics Lessons, Lesson Plans, and Worksheets       For teaching and learning general money skills, personal finance, and money management, please go to the Money Instructor home page.

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