Resume Wizard - Colorado FFA



|Junior and Senior level Ag Bus. |

Colorado Agriscience Curriculum

|Section: |Advanced Agribusiness |

|Unit: |Personal Financial Planning |

|Lesson Title: |Time Value of Money |

|Colorado Ag Education |AGB11/12.03 - The student will be able to formulate and analyze financial records and use the information for evaluation and |

|Standards and |planning. |

|Competencies | |

| |Understand credit risks. |

| | |

| |Understand sources of credit. |

| | |

| |Calculate cost of credit. |

| | |

|Colorado Model Content |Math Standard 1: Students develop number sense and use numbers and number relationships in problem-solving situations and |

|Standard(s): |communicate the reasoning used in solving these problems. |

| | |

| |Math Standard 2: Students use algebraic methods to explore, model, and describe patterns and functions involving numbers, |

| |shapes, data and graphs in problem-solving situations and communicate the reasoning used in solving these problems. |

| | |

| |Math Standard 3: Students use data collections and analysis, statistics, and probability in problem-solving situations and |

| |communicate the reasoning used in solving these problems. |

| | |

| |Math Standard 6: Students link concepts and procedures as they develop and use computational techniques, including estimation, |

| |mental arithmetic, paper-and-pencil, calculators, and computers, in problem-solving situations and communicate the reasoning |

| |used in solving these problems. |

|Student Learning |Upon completion of this lesson the student will be able to: |

|Objectives: |Understand the time value of money |

| |Calculate the future value of a present day investment (compounding) |

| |Calculate the present value of a future sum (discounting) |

|Time: |50 minutes |

|Resource(s): |Agribusiness Decisions and Dollars, Elliot, 1997 |

| |Introduction to Ag Business, Ricketts and Rawlins, 2001 |

|Instructions, Tools, |Italicized words are instructions to the teacher, normal style text is suggested script. |

|Equipment, and Supplies: |Student notebooks, calculator, PowerPoint lesson |

| |Projector and whiteboard |

|Interest Approach: |Good day students! What a great day to be alive in this great country we live in. Did you know there are more millionaires in |

| |the good old USA than the rest of the world combined? Today we will learn how each and every one of you can become millionaires!|

| |The first thing I would like for you to do today is to calculate how much money you would have at the end of 30 days if you |

| |invest 1 cent and your investment doubles every day for 30 days. Make sure you do your work on a blank sheet of paper and write |

| |legibly because I will call on a couple of you to show your work on the board! Everybody Ready? You will have 5 minutes! Go!!!!!|

| |(This is also in a handout at the end of the lesson plan) |

| |Students will calculate how much money they could accumulate if they invest 1 cent and their investment doubles on a daily basis|

| |(Table 1-12 Decisions and Dollars). The goal is to get students thinking of how their savings and investments can increase in |

| |value over time |

| |5 minutes per example above |

|Objective 1: |Understand The Time Value Of Money (students will need the 1 penny handout) |

| |Discuss the example in the interest approach. Show power point slides 1 and 2. Why were you able to become rich in just 30 days?|

| |The reason is a principle called the time value of money. When we talk about the time value of money we are really talking |

| |about the power of compound interest. Most of use know that when we invest our money we are counting on the power of compound |

| |interest to add to our investments |

|Objective 2: |Calculate the Future Value of a Present Day Investment – the following e-moment, formula, and example shows how much interest |

| |you can make on an invested amount in the future. (students will need the future value chart as a handout) |

| |Show slides 3 Discuss the Ways to figure Future Value. Pair students up and use the little professor moment to teach the 2 ways |

| |of figuring future value. One student will take notes and gather information on the formula method and teach their partner this |

| |method. Then the second student will gather information on the Table method and teach partner this method. . |

| |We will be working in pairs for a few minutes so I need you to pair up. One of you will be Professor #1 and one of you will be |

| |Professor #2. Professor #1 you will be responsible for learning and teaching professor #2 the formula method of figuring the |

| |future value of an investment. Professor #2 put your pens and pencils down and let professor #1 do all the work. #1’s Are you |

| |Ready???? Outstanding!!! The formula method looks like this…. Show slide #4 from power point and discuss the formula with #1’s.|

| |FV = P (1+ I )n Where P= Principal, I = interest, and n=years |

| |Example FV = $5000 (1.05)5 5000 (1.34) FV = $6400 |

| |All right professor #1 it s time to teach this method to professor #2. You have 5 minutes starting now! |

| |All right its time for professor #2 to pay attention . Professor #2 your job will be to teach professor #1 the table|

| |method for calculating the future value. The first step is to find the years and interest rate on the Future value |

| |table. Then multiple the principle by the given factor. This multiplication will give you the future value of the given sum. |

|Objective 3: |Calculate the Present Value of a Future Sum. We use this formula to calculate what interest you will need to invest your |

| |current money at to have the amount you need for a future purchase. |

| |Discuss the Discounting formula |

| |PV = Principle ( 1_____) |

| |( 1 + interest)years |

| |Here is the situation: Jim needs $2,000 for college in five years, the PV formula could calculate the amount she would need |

| |today to reach the goal. At an 8% interest rate, the equation would look like this. |

| |Example: |

| |PV of $2,000 if interest is 8% and time is 5 years |

| |PV = 2,000 (_____1____) |

| |(1 + .08)5 |

| |The present value calculates to be $1361.17. This is the amount of money Jim needs to invest at the current moment to receive |

| |the $2,000 he will need in 5 years for college if the investment is invested at 8% interest. |

|Review/Summary: |Students will be paired and Eyewitness e moment used for review. |

| |Each student will interview the other student on what they learned into today’s lesson. Have the students keep these |

| |interviews. They could be used at later time for a class presentation. |

|Application--Extended |Have students access one of the many investment sites on the internet. Students should enter |

|Classroom Activity: |various information into the online investment calculators to investigate return on |

| |investment possibilities |

|Application--FFA |Have students prepare to participate in the Farm Business Management CDE. |

|Activity: | |

|Application--SAE | |

|Activity: |Students should utilize their own SAE record book information in projecting their investment potential. |

|Evaluation: |See below |

|Evaluation Answer Key: |See below |

1 CENT DOUBLED FOR 30 DAYS

|Day |Beginning Value |Ending Value |

|1 |$0.01 |$0.02 |

|2 |$0.02 |$0.04 |

|3 |$0.04 |$0.08 |

|4 |$0.08 |$0.16 |

|5 |$0.16 |$0.32 |

|6 |$0.32 |$0.64 |

|7 |$0.64 |$1.28 |

|8 |$1.28 |$2.56 |

|9 |$2.56 |$5.12 |

|10 |$5.12 |$10.24 |

|11 |$10.24 |$20.48 |

|12 |$20.48 |$41.00 |

|13 |$41.00 |$82.00 |

|14 |$82.00 |$164.00 |

|15 |$164.00 |$328.00 |

|16 |$328.00 |$655.00 |

|17 |$655.00 |$1,311.00 |

|18 |$1,311.00 |$2,621.00 |

|19 |$2,621.00 |$5,243.00 |

|20 |$5,243.00 |$10,486.00 |

|21 |$10,486.00 |$20,972.00 |

|22 |$20,972.00 |$41,943.00 |

|23 |$41,943.00 |$83,866.00 |

|24 |$83,886.00 |$167,772.00 |

|25 |$167,772.00 |$335,544.00 |

|26 |$335,544.00 |$671,089.00 |

|27 |$671,089.00 |$1,342,177.00 |

|28 |$1,342,177.00 |$2,684,356.00 |

|29 |$2,684,356.00 |$5,368,711.00 |

|30 |$5,368,711.00 |$10,737,422.00 |

FUTURE VALUE TABLE

INTEREST

YEAR |4% |5% |6% |7% |8% |9% |10% |11% |12% |15% | |1 |1.04 |1.05 |1.06 |1.07 |1.08 |1.09 |1.10 |1.11 |1.12 |1.15 | |2 |1.08 |1.10 |1.12 |1.14 |1.17 |1.19 |1.21 |1.23 |1.25 |1.32 | |3 |1.12 |1.16 |1.19 |1.23 |1.26 |1.30 |1.33 |1.37 |1.40 |1.52 | |4 |1.17 |1.22 |1.26 |1.31 |1.36 |1.41 |1.46 |1.52 |1.57 |1.75 | |5 |1.22 |1.28 |1.34 |1.40 |1.47 |1.54 |1.61 |1.69 |1.76 |2.01 | |6 |1.27 |1.34 |1.42 |1.50 |1.59 |1.68 |1.77 |1.87 |1.97 |2.31 | |7 |1.32 |1.41 |1.50 |1.61 |1.71 |1.83 |1.95 |2.08 |2.21 |2.66 | |8 |1.37 |1.48 |1.59 |1.72 |1.85 |1.99 |2.14 |2.30 |2.48 |3.06 | |9 |1.42 |1.55 |1.69 |1.84 |2.00 |2.17 |2.36 |2.56 |2.77 |3.52 | |10 |1.48 |1.63 |1.79 |1.97 |2.16 |2.37 |2.59 |2.84 |3.11 |4.05 | |15 |1.80 |2.08 |2.40 |2.76 |3.17 |3.64 |4.18 |4.78 |5.47 |8.14 | |20 |2.19 |2.65 |3.21 |3.87 |4.66 |5.60 |6.73 |8.06 |9.65 |16.37 | |25 |2.67 |2.39 |4.29 |5.43 |6.85 |8.62 |10.83 |13.59 |17.00 |32.92 | |30 |3.24 |4.32 |5.74 |7.61 |10.06 |13.27 |17.45 |22.89 |29.96 |66.21 | |35 |3.95 |5.52 |7.69 |10.68 |14.79 |20.41 |28.10 |38.57 |52.80 |133.18 | |40 |4.80 |7.04 |10.29 |14.97 |21.72 |31.41 |45.26 |65.00 |93.05 |267.86 | |

Name:__________________

Date:___________________

Time Value of Money Quiz

Figure the following situations:

1) Bill has $45,000 dollars he would like to invest at 5% interest. Using the formula or chart in this lesson, figure the amount of money in interest Bill will have accumulated in 25 years.

$45,000 X 2.39 - $45,000

Bill will have accumulated $62,550 worth of interest in 25 years.

2) Bill’s daughter Georgia is planning to go to college in ten years. Being a daddy’s girl Bill will need to foot the bill. Her college education will cost Bill $25,000 dollars per year for five years. The local Bank is offering a fixed interest rate for ten years at 10% interest. How much does bill need to invest today so that he will have the entire amount needed for Georgia on her first year of College?

$125,000 X .38554

Bill needs $ $48,192.50 currently to fund Georgia’s full education in ten years.

Name:__________________

Date:___________________

Time Value of Money Quiz

Figure the following situations:

3) Bill has $45,000 dollars he would like to invest at 5% interest. Using the formula or chart in this lesson, figure the amount of money in interest Bill will have accumulated in 25 years.

4) Bill’s daughter Georgia is planning to go to college in ten years. Being a daddy’s girl Bill will need to foot the bill. Her college education will cost Bill $25,000 dollars per year for five years. The local Bank is offering a fixed interest rate for ten years at 10% interest. How much does bill need to invest today so that he will have the entire amount needed for Georgia on her first year of College?

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download