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### 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)
- Math Behind the Market

- Show All Publications Listed by Name (Next)

- Publications

- In the Classroom

Table of Contents

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

- Page 2: Thinking Algebraically

- What is a Company

Sample Lesson Plans

- Before You Invest
- What is a Stock
- Page 12: Thinking Algebraically
- Integers
- Addition/Subtraction/Multiplication

- Page 15: Communicating Quantitative Information
- Understanding Tables
- Graphing

- Page 12: Thinking Algebraically

- What is a Stock

Additional Information

- Don’t have to do all the lessons
- Enrichments lessons
- Answer Keys
- 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
- 7th Grade Mathematics
- Includes:
- Power Point
- Worksheet
- Answer Key

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
- 7th Grade Mathematics
- Includes the following:
- Power Point
- Worksheet
- Answer Key

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
- 10th Grade Mathematics
- Includes:
- Power Point
- Worksheets (Growth & Decay)
- Answer Keys

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:[email protected]/documents/foundation/p119852.pdf
- http:[email protected]/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
- Read the business section of
the newspaper

- Watched financial programs

Resources

- www.stockmarketgame.org
- www.financeintheclassroom.org
- http://robisonlovesmath.wikispaces.com/
- My email:[email protected]

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