Lesson Plan
Course Title: Principles of Business Management, Finance, and Marketing
Session Title: Time Value of Money
Performance Objective (LSI Quadrant 1- Why are we doing this?):
To gain a better understanding of ‘the time value of money’ concept.
Approximate Time:
1-2 days.
Specific Objectives (LSI Quadrant 1- Why are we doing this?):
SWBAT (Student Will Be Able To)
 Understand ‘the time value of money’ concept  Explain ‘the time value of money’ concept  Calculate potential interest earned on an initial investment
TERMS
Money - legal tender, cash
Time Value of Money - Price put on the time an investor or lender has to wait until the investment or loan
is fully recouped. TVM is based on the concept that money received earlier is worth more than the same
amount of money received later, because it can be 'employed' to earn interest over time. Computed as
compound interest.
Preparation
TEKS Correlations:
This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may
result in the elimination of any or all of the TEKS listed.
130.112(c)
11) The student understands the fundamental principles of money. The student is expected to:
(E) explain the time value of money
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Interdisciplinary Correlations:
English-English 1
 110.31(b)(1). Reading/Vocabulary Development. Students understand new vocabulary and use it
when reading and writing.
 110.31(b)(11). Reading/Comprehension of informational text/procedural texts. Students understand
how to glean and use information in procedural texts and documents.
Math-Algebra I
 111.32(b)(1)(C). Interpret and make decisions, predictions, and critical judgments from functional
relationships.
Teacher Preparation:
The teacher will review the terms in the outline, Power Point slides, and any handouts to become familiar
with the lesson.
Teacher should locate and evaluate various resources and websites before the lesson.
Teacher will have assignments and website information ready to distribute to students.
Occupational Correlation (O*Net – www.onetonline.org/)
Job Title: Personal Financial Advisors
O*Net Number: 13-2052.00
Reported Job Titles: Portfolio Manager, Financial Planner, Account Executive
Tasks: Sell financial products such as stocks, bonds, mutual funds, and insurance if licensed to do so.
Analyze financial information obtained from clients to determine strategies for meeting clients' financial
objectives. Review clients' accounts and plans regularly to determine whether life changes, economic
changes, or financial performance indicate a need for plan reassessment.
Soft Skills: Giving full attention to what other people are saying, taking time to understand the points being
made, asking questions as appropriate, and not interrupting at inappropriate times. The ability to tell when
something is wrong or is likely to go wrong. It does not involve solving the problem, only recognizing there is
a problem. Actively looking for ways to help people.
References:
http://www.tea.state.tx.us/index2.aspx?id=6148&menu_id=720&menu_id2=785
Instructional Aids:
Lesson 6.3-Time Value of Money presentation
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2
Materials Needed:
Time Value of Money Worksheet
Time Value of Money Worksheet Key
Time Value of Money Quiz
Time Value of Money Quiz Key
Equipment/Software Needed:
Computers
Internet
Spreadsheet program
Learner Preparation:
Ask students if they’ve heard the phrase, “Time is money.” Discuss the meaning and examples of this.
Introduction
Introduction (LSI Quadrant I- Why are we doing this lesson?):
To help students gain a better understanding of all the different types of currency out there, how we use it,
and where we can get it.
ASK:
SAY:
ASK:
ASK:
ASK:
ASK:
ASK:
Is it possible for a person to make money while they aren’t working? Like, while they’re sleeping.
Finish this statement…’Money is_____________’
Why did you answer the way you answered?
Why do we all want money?
Do you think everyone deserves to have as much money as they want?
Why do you think some people have money and others don’t?
What would you be willing to do to make money? What would you not be willing to do to make
money?
Outline
Outline (LSI Quadrant II- What are we doing in this lesson?):
Instructors can use the presentation slides, handouts, and note pages in conjunction with the following
outline.
MI
Outline
I.
Notes to Instructor
Discovery
A. Ask students the question,
‘Which is better? To get
$10,000 today or wait until 3
years from now and get the
$10,000?
Most students will say ‘now,’but
why they want it now is where
you’ll start to explain the time
value of money. Most will want
the money now so they can
spend it...but what about the
other reasons why getting the
money now would be better?
Copyright © Texas Education Agency, 2012. All rights reserved.
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B. ask why they answered the way
they did.
Verbal
Linguistic
Logical
Mathemati
cal
II. Introduction
A. Introduce the ‘why’ of the lesson
1. Why we are doing this
assignment
2. Need to Know Terms
III. Guided Practice
A. Have students go to online and find
at least one article to help provide a
better understanding of the time
value of money concept.
B. Download/Hand out the Time Value
of Money Worksheet found with this
lesson.
Use the provided objective
and terms by method of
choice.
IV. Independent Practice
A. Time Value of Money Worksheet.
Go through the first one, and
then let them do the others on
their own.
V. Summary
A. Re-state the objectives and check for
understanding on how to calculate
interest on an initial investment.
Restate the lesson objectives
and then do a quick check for
understanding on how to
calculate interest on an initial
investment. This work can be
graded in class or by you, the
teacher.
Visual
Spatial
Musical
Rhythmic
Bodily
Kinesthetic
Intrapersonal
Once you’ve explained the
concept, or let the article(s)
explain, the time value of
money, get students ready to
work on their own (or with a
partner) on the Time Value of
Money Worksheet.
Interpersonal
Application
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Naturalist
Existentia
list
Guided Practice (LSI Quadrant III- How are we going to do this?):
Have students download at least one article dealing with the time value of money and read for
understanding. You may direct them to the same article so that the information is received clearly.
Have students download (or you provide a hard copy handout) of the Time Value of Money Worksheet. Go
over directions and then get them started in the right direction on how to fill in the required information.
Independent Practice (LSI Quadrant III- How are we going to do this?):
Students will work on their own (or with partners/in groups) to complete the investment table.
Summary
Review (LSI Quadrants I- Why are we doing this lesson? and IV -Extending the lesson):
We are doing this so students will be able to see what investing can do for a person as opposed to
immediate spending…thus, getting across the concept of the time value of money.
To extend the lesson, you can have students research to find actual interest rates offered, have them set up
different sheet tabs/tables with the information, and calculate to compare and contrast their options.
Evaluation
Informal Assessment (LSI Quadrant III):
Walk around and spot check students as they work on their own.
Give deadlines for different stages of the assignment.
The Time Value of Money Worksheet
Formal Assessment (LSI Quadrant III, IV):
Time Value of Money Quiz
Formal Assessment (LSI Quadrant III- How are we going to do this?)
Students will be tested over calculating simple compounded interest for an initial investment for a
specific period of time. Quiz and Key are provided.
Extension
Extension/Enrichment (LSI Quadrant IV- Extending the lesson):
To extend the lesson, you can have students research to find actual interest rates offered, have them set up
different sheet tabs/tables with the information, and calculate to compare and contrast their options.
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5
Investment Amount
Interest Rate
Time
January
February
March
April
May
June
July
August
September
October
November
December
$ 10,000.00
1.25%
1 year
Start Amount
Interest Earned
End Amount
$ 10,000.00 $ 125.00 $ 10,125.00
$ 10,125.00 $ 126.56 $ 10,251.56
Note: If you know how to set up an absolute value and use the fill handle, this can be quickly filled in with the correct information. Copyright © Texas Education Agency, 2012. All rights reserved.
Investment Amount
Interest Rate
Time
$ 10,000.00
1.25%
1 year
January
February
March
April
May
June
July
August
September
October
November
December
Start Amount
$ 10,000.00
$ 10,125.00
$ 10,251.56
$ 10,379.71
$ 10,509.45
$ 10,640.82
$ 10,773.83
$ 10,908.50
$ 11,044.86
$ 11,182.92
$ 11,322.71
$ 11,464.24
Interest Earned
$ 125.00
$ 126.56
$ 128.14
$ 129.75
$ 131.37
$ 133.01
$ 134.67
$ 136.36
$ 138.06
$ 139.79
$ 141.53
$ 143.30
End Amount
$ 10,125.00
$ 10,251.56
$ 10,379.71
$ 10,509.45
$ 10,640.82
$ 10,773.83
$ 10,908.50
$ 11,044.86
$ 11,182.92
$ 11,322.71
$ 11,464.24
$ 11,607.55
Note: If you know how to set up an absolute value and use the fill handle, this can be quickly filled in with the correct information. Copyright © Texas Education Agency, 2012. All rights reserved.
Investment Amount
Interest Rate
Time
$5,000
2.00%
1 year
Initial Investment
Interest Earned
January
February
March
April
May
June
July
August
September
October
November
December
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End Amount
Investment Amount
Interest Rate
Time
$5,000
2.00%
1 year
January
February
March
April
May
June
July
August
September
October
November
December
Start Amount
$ 5,000.00
$ 5,100.00
$ 5,202.00
$ 5,306.04
$ 5,412.16
$ 5,520.40
$ 5,630.81
$ 5,743.43
$ 5,858.30
$ 5,975.46
$ 6,094.97
$ 6,216.87
Interest Earned
$ 100.00
$ 102.00
$ 104.04
$ 106.12
$ 108.24
$ 110.41
$ 112.62
$ 114.87
$ 117.17
$ 119.51
$ 121.90
$ 124.34
End Amount
$ 5,100.00
$ 5,202.00
$ 5,306.04
$ 5,412.16
$ 5,520.40
$ 5,630.81
$ 5,743.43
$ 5,858.30
$ 5,975.46
$ 6,094.97
$ 6,216.87
$ 6,341.21
Copyright © Texas Education Agency, 2012. All rights reserved.