Outcomes
A student:

 MA5.21WM
selects appropriate notations and conventions to communicate mathematical ideas and solutions

 MA5.22WM
interprets mathematical or reallife situations, systematically applying appropriate strategies to solve problems

 MA5.24NA
solves financial problems involving compound interest
Related Life Skills outcomes: MALS12NA, MALS13NA, MALS14NA, MALS15NA, MALS16NA, MALS17NA
Content
 Students:
 Connect the compound interest formula to repeated applications of simple interest using appropriate digital technologies (ACMNA229)

establish and use the formula to find compound interest:
\( A = P \left( 1+R \right) ^n \) where \(A\) is the total amount, \(P\) is the principal, \(R\) is the interest rate per compounding period as a decimal, and \(n\) is the number of compounding periods
 calculate and compare investments for different compounding periods, eg calculate and compare the value of an investment of $3000 at an interest rate of 6% per annum after 5 years when the interest is compounded annually, as opposed to the interest being compounded monthly (Problem Solving)
 use a spreadsheet to graph the value of an investment of a particular amount at various compound interest rates over time (Problem Solving)
 solve problems involving compound interest
 calculate the principal or interest rate needed to obtain a particular total amount for a compound interest investment (Problem Solving)
 use a 'guess and refine' strategy to determine the number of time periods required to obtain a particular total amount for a compound interest investment (Problem Solving)
 compare the total amounts obtained for a particular investment when the interest is calculated as compound interest and as simple interest, eg compare the total amount obtained when $10,000 is invested at an interest rate of 6% per annum compounded monthly for 5 years, with the total amount obtained when the interest is calculated as simple interest (Problem Solving)
 use the compound interest formula to calculate depreciation
Background Information
Internet sites may be used to find commercial rates for home loans and to provide 'homeloan calculators'.
National Numeracy Learning Progression links to this Mathematics outcome
When working towards the outcome MA5.24NA the subelements (and levels) of Operating with percentages (OwP6) and Number patterns and algebraic thinking (NPA7NPA8) describe observable behaviours that can aid teachers in making evidencebased decisions about student development and future learning.
The progression subelements and indicators can be viewed by accessing the National Numeracy Learning Progression.