Simple Interest and Compound Interest
Aptitude(Numeracy & Reasoning) 21st century literacies
Simple Interest and Compound Interest
Lesson Plan
Objective:


Total Time: 90 Minutes 

Instructor Note: This unit would deal with the basic nuances of the topic simple interest and compound interest. Trainer is expected to help students learn important variables and factors of this topic such as principal, rates, time etc. Students should be able to understand that money is not free and there is a time value of money. Trainer is expected to equip students with the concepts of interest so well that they are able to use them practically when needed. Owing to the importance of this topic it becomes inevitable to form a strong foundation and holistic learning of the same. Trainer is required to deliver this unit under an engaging environment by using practical examples and competitive activities. (After explaining concepts & practice) Display/distribute handout consisting of questions. The Foundation section will comprise 4 questions. Instruct students that they will be given 8 minutes to discuss among themselves & solve these 4 questions, whichever group solves maximum problems wins maximum points on the points table (refer opening protocol). Award 5 marks for each correct answer given by a group. Move around the class to check procedures used by students to solve problems. Once time is up, provide solutions and explanations for each question. Switch to moderate level. This section comprises 3 questions and cumulative time allotted will be 10 minutes. All other instructions remain the same. Switch to HOTS. This section comprises 3 questions and cumulative time allotted will be 15 minutes. All other instructions remain the same. 

Opening Protocol:

3 Minutes 
Opening Activity:
When we borrow money, we pay interest to the lender at the rate set by the lender. Money has a time value, for example the value of Rs.10000 in 1980 is not the same in 2021. So it is important for the lender to recover money from the borrower along with interest to keep the time value of money at par.

10 Minutes 
Section 1: Understanding important terms
Section 2: Understanding Simple interest & Compound interest.
Compound interest formula is given by: Compound interest = (Amount – Principal) Where the amount is given by, Where, A= Amount, P= Principal, R= Rate of interest and T= Time (in years) Derivation of compound interest formula:
Section3: Compound Interest VS Simple Interest:
Section 4: Understanding calculation of SI & CI though percentages:
Example 1: What is SI of Rs.800 on 5% per annum for 3 years? We can either put formula and calculate as below: SI= (800*5*3)/100 = 120 Or, As we know that in simple interest, interest is always calculated on principal so we can just calculate 15% (5% for 3 years) of 800 which is 120. Thus, in this way we don’t have to remember the formula and we can simply get answers by using the concept of percentages. Example 2: What will be the CI obtained on an amount of Rs.4800 at the rate of 5% for 3 years? We can either put formula and calculate as below: Amount= 4800[1+ (5/100)]^3 = 5556.6 ; CI= (5556.6 – 4800)= 756.6 Or, We can simply use concept of multiplying factor learnt in percentages, since 4800 is increasing by 5% every year for constant 3 years, we can write it as 4800* (1.05)^3 = 5556.6 ; CI = (5556.64800) = 756.6. Thus, in this way we don’t have to remember the complex formula of CI and we easily solve problems based on CI through the concept of multiplying factor learnt in session of percentage.
1. A sum of Rs.15000 amount gave Rs.4500 as interest in 5 years. What is the rate of interest? Answer 6% 2. What would be the C.I on Rs.17500 at the rate of 12p.c.pa after 2 years? Answer 4452 3. What would be C.I obtained on an amount of 12500 at the rate of 12p.c.pa after 2 years? Answer 3180 4. Find the CI on Rs.12500 at 8% per annum for 9 months compounded quarterly. Answer 765

30 Minutes 
Section 5: Foundation
Section 6: Moderate
Section 7: HOTS High order thinking skills.

8 Minutes Answers 1. 41216 2. 10 3. 10000 4. 6 10 Minutes Answers 1. 666.6 2. 4200 3.166375 15 Minutes Answers 1. 48000 2. 4096 3. 40000 Exp time 10 min 
Closing Activity:

1 Minute 
Closing Protocol:

Postsession 