# UTPA STEM/CBI Courses/Business Math/Business Algebra/Future Value of an Annuity - Sinking Funds

Course Title: Business Algebra

Lecture Topic: Future Value of an Annuity; Sinking Funds

Instructor: Charles A. Whitfield

Institution: TAMIU

## Backwards Design[edit | edit source]

**Course Objectives**

**Primary Objectives**- By the next class period students will be able to:- Find the future value of an annuity;
- Determine the payments needed to meet future obligations.

**Sub Objectives**- The objectives will require that students be able to:- Find the rate per period and the number of payment periods;
- Find simple and compound interest.

**Difficulties**- Students may have difficulty:- Determining the rate per period as opposed to the annual interest rate.
- Determining the number of payments as opposed to the number of years.
- Using the graphing calculator for the exponents.
- Using the graphing calculator with parenthesis in the correct place.

**Real-World Contexts**- There are many ways that students can use this material in the real-world, such as:- Solve real life application problems using the future value of an ordinary annuity and sinking fund payment formulas.

**Model of Knowledge**

**Concept Map**- Percent
- Exponents
- Graphing Calculator

**Content Priorities****Enduring Understanding**- Solving for the future value of an ordinary annuity.
- Find the payment needed to reach a future value.

**Important to Do and Know**- Simple interest.
- Compound interest.

**Worth Being Familiar with**- Present value of an annuity.
- Amortization.

**Assessment of Learning**

**Formative Assessment**- In Class (groups)
- Given a word problem, students will identify the periodic payment, the rate per period, and the number of payments (periods).
- Substitute the information into the formula.
- Solve the problem with a graphing calculator.
- Compare answers within each group.

- Homework (individual)
- Assign problems from the textbook for homework.

- In Class (groups)
**Summative Assessment**- In class exam over the lesson.

## Legacy Cycle[edit | edit source]

**OBJECTIVE**

By the next class period, students will be able to:

- Find the future value of an annuity.
- Determine the payments needed to meet future obligations.

The objectives will require that students be able to:

- Identify or find the future value, periodic payment, rate per period, and number of payments.
- Use a graphing calculator to enter the information correctly to obtain the correct answer.

**THE CHALLENGE**

You have had your first child and are concerned about paying for his/her college education. How much money do you need to invest each month to be able to pay for his/her college education 18 years from now?

**GENERATE IDEAS**

How much does it cost now for a college education and how much will it cost in 18 years? What is the current rate of investment? What if you have another child in 3 years? What if the family has financial problems?

**MULTIPLE PERSPECTIVES**

Lecture over formulas needed. Work in groups of 3-4. Bring in an investment person (guest speaker).

**RESEARCH & REVISE**

Go online to research current rates. Check tuition changes over the past several years. Research risks of various investments.

**TEST YOUR METTLE**

Assign problems on investments.

**GO PUBLIC**

Students submit their findings.

## Pre-Lesson Quiz[edit | edit source]

- question

## Test Your Mettle Quiz[edit | edit source]

- question