Math Behind the Market

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# Math Behind the Market - PowerPoint PPT Presentation

Math Behind the Market. Teaching Math Through the Stock Market Game. By Mindy Robison. [email protected] Midvale Middle School . Accessing Lesson Plans. www.stockmarketgame.org Login In the Classroom Publications Show All Publications Listed by Name (Next)

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### Math Behind the Market

Teaching Math Through the Stock Market Game

Accessing Lesson Plans
• www.stockmarketgame.org
• In the Classroom
• Publications
• Show All Publications Listed by Name (Next)
• Math Behind the Market
Sample Lesson Plans
• Before You Invest
• What is a Company
• Page 2: Thinking Algebraically
• Percentages
• Patterns
• Page 3: Interpreting Statistics
• Ordering
• Patterns
• Page 10: Tackling Complex Problems
• Ratios
• Division
Sample Lesson Plans
• Before You Invest
• What is a Stock
• Page 12: Thinking Algebraically
• Integers
• Page 15: Communicating Quantitative Information
• Understanding Tables
• Graphing
• Don’t have to do all the lessons
• Enrichments lessons
• Match to State Core
• Feel free to adapt and change
More Resources
• http://my.uen.org/myuen/69301/2
• This is my UEN site that has the following worksheets available.
What Questions?
• Understanding Basic Concepts
• Percentage Increase/Decrease
• Differences
• Price to Earnings Ratio
• Which Stock would you buy?
Another Resource
• Go to Financeintheclassroom.org
• Grouped into math lesson plans and activities by grade.
• Lessons are simple, easy to teach, and meet the state core.

http://financeintheclassroom.org/

Stock Purchases & Commission
• http://www.uen.org/Lessonplan/preview.cgi?LPid=25375
• Includes:
• Power Point
• Worksheet
Determining Stock Cost
• Lets assume you have decided to buy Hershey (HSY). The price is \$39.91.
• You decide you want to purchase 100 shares of the company.
• To find out how much the stock will cost you simply multiply the price (\$39.91) by the number of shares (100) and you get: 39.91 · 100 = \$3,991.00, but don’t forget about the commission!
Examples:

You want to buy 500 shares of Ford, at the current trading price of \$12.41 per share.

Cost of the Stocks:

500 · 12.41 = \$6,205.00

Commission:

.02 · 6,205.00 = \$124.10

Total Price:

6,205.00 + 124.10 = \$6,329.10

Extensions
• What would happen to the total cost of the transaction if the 2% commission:
• Went up?
• The total cost would be more.
• Went down?
• The total cost would be less.
• When investing your own money do you want high or low commissions?
• LOW – the transaction will cost less money.
Price To Earnings Ratio
• http://www.uen.org/Lessonplan/preview.cgi?LPid=25290
• Includes the following:
• Power Point
• Worksheet
What Else?
• What happens to the Price to Earnings Ratios if:
• The Stock Price Goes Higher?
• The Stock Price Goes Lower?
• The Earnings Go Higher?
• The Earnings Go Lower?
Exponential Growth
• http://www.uen.org/Lessonplan/preview.cgi?LPid=24626
• Includes:
• Power Point
• Worksheets (Growth & Decay)
Exponential Growth

Assume you have \$5,000 to invest.

Formula: A = P (1 + r/n)nt

P = Principal

r = Annual Rate

n = # of times compounded per year

t = Number of years

What Else?
• Talk about what happens when the interest rate changes.
• Discuss the differences between the ways the interest is figured.
• Help students realize how important time is to the equation.
Exponential Decay

Assume the car was purchased for \$20,000

Formula: y = a (1 – r)t

a = initial amount

r = percent decrease

t = Number of years

What Else?
• Talk about what happens when the depreciation rate changes.
• Talk about the values you will get 20 or 30 years out – does it make sense?
• Discuss the pros and cons of buying new or used cars.
The Stock Market Game Study
• http://www.finrafoundation.org/web/groups/foundation/@foundation/documents/foundation/p119852.pdf
• http://www.finrafoundation.org/web/groups/foundation/@foundation/documents/foundation/p119855.pdf
The Stock Market Game Study
• Students who played the game:
• Scored Significantly Higher on Mathematics Test
• Scored Significantly Higher on Financial Literacy Tests
• Score higher regardless of teacher implementation
The Stock Market Game Study
• Teachers
• Financial practices were influenced
• Set financial goals
• Analyzed their risk tolerance