Howmight
You
muchchoose
would that
to follow
gold be
theworth
couple
now?
in the
story and invest all of your money in gold
Imagine you’d had £1000 to spend on gold
bars at the beginning of 2004. About how
many grams could you have bought?
LloydsTSB share price in pence per share
About how many shares could you have
bought for £1000 at the beginning of 2004?
How do you know?
Which was the best deal – gold or bank
shares?
How much would they be worth now?
You might have decided to invest all of your money in LloydsTSB shares
If you’d invested all of
the money from selling
your house you might
not keep it in the same
place for four years –
you might be able to
make more money by
moving it around
At their peak Tesco shares
were worth around 485p each.
How much could you sell your
Thefor?
average
at the
shares
How house
do youprice
know?
beginning of 2004 was £140 225
How many Tesco shares could you
buy for £140 225? How do you
know?
At that time shares in Tesco were
worth about 260p
In November 2007 Gold cost about
£13.50 per gram. If you now move your
money to gold, how many grams could
you buy?
About how much would that be
worth now? How do you know?
You started out with £140 225
What percentage has your money
increased by over the four years? How
do you know?
Is that the best you can do?!
If you were able to sell your house for
the average price from the start of
2004 and were able to invest in either
gold bars, LloydsTSB shares or
Tesco shares, what’s the most money
you could now have?
You’re able to move your money as
many times through the four years as
you wish but you are not able to split
your investment – all of your money
must be moved at once.
Up2d8 maths
Beating the credit crunch
Student resource sheets
from www.gold.org
from www.housepricecrash.co.uk
From www.iii.co.uk
From www.iii.co.uk
Up2d8 maths
Beating the credit crunch
Teacher Notes
Beating the Credit Crunch?
The importance statement for mathematics states that:
Mathematical thinking is important for all members of a modern society as a habit of mind for its use in the workplace, business and
finance, and for personal decision-making. Mathematics is fundamental to national prosperity in providing tools for understanding
science, engineering, technology and economics. It is essential in public decision-making and for participation in the knowledge
economy.
This resource aims to increase awareness of some of the issues related to personal finance in our modern world
Content objectives:
•
use proportional reasoning to solve problems, choosing the correct numbers to take as 100%, or as a whole
•
interpret tables, graphs and diagrams for discrete and continuous data, relating summary statistics and findings to the questions being
explored
Process objectives: These will depend on the amount of freedom you allow your class with the activity. It might be worth considering how
you’re going to deliver the activity and highlighting the processes that this will allow on the diagram below.
Activity:
The students’ task is to use the information given to make as much profit as possible by moving their money from one investment to another at
strategic moments
Working in groups:
This activity lends itself to paired or small group work and, by encouraging students to work collaboratively, it is likely that you will allow them
access to more of the key processes than if they were to work individually.. You will need to think about how your class will work on this task.
Will they work in pairs, threes or larger groups? If pupils are not used to working in groups in mathematics, you may wish to spend some time
talking about their rules and procedures to maximise the effectiveness and engagement of pupils in group work (you may wish to look at the
SNS Pedagogy and practice pack Unit 10: groupwork for guidance). You may wish to encourage the groups to delegate different areas of
responsibility to specific group members.
Differentiation:
You may decide to change the level of challenges for your group. You could consider making the task less challenging by
•
Limiting the number of times students can move their investment – maybe only allowing them to transfer it once or twice through the four
years
•
Simplifying the amount of money that the students have to invest – maybe starting with £100
or more challenging, by
•
Considering the cost of moving money from one investment to another and including this in the calculations
This resource can be adapted to your requirements.
Outcomes:
You may want to consider what the outcome of the task will be and share this with the students. This could be:
•
A report detailing when they moved their money from one investment to another
•
A graph plotting the growth of their investment through the years
•
A newspaper article reporting on a couple who sold their house in 2004 and telling the story of how they made their money
Assessment:
You may wish to consider how you will assess the task and how you will record your assessment. This could include developing the
assessment criteria with your class. You might choose to focus on the content objectives or on the process objectives. You might decide that
this activity lends itself to comment-only marking or to student self-assessment.
Probing questions:
Students could brainstorm issues to consider. You may wish to introduce some points into the discussion which might include:
•
What are the limitations of this model?
•
How could we remove some of the ‘lumpiness’ in the graphs to make it easier to spot trends?
•
Would this exercise help you if you had money to invest?
•
Would it have been better to keep the house?
You will need: The PowerPoint presentation to read through with your group. There are seven slides
The first slide sets the scene with a news story about a couple who sold their house in 2004 and invested the
profits in gold (the image of the webpage is a link to the story on the BBC website)
The second to sixth slides lead the students through a series of examples of increasing complexity where a sum
of money is invested in 2004. The first example shows what would happen if the investment was in gold, the
second shows what would happen if the investment had been made in LloydsTSB shares and the third shows
what would happen if the money had been invested in Tesco shares and then switched to gold bars.
The level of the group that you are working with will determine the depth and the time spent working through
these slides.
The final slide sets the restrictions for the task. You may wish to edit this slide to impose more restrictions
(such as limiting the number of times that the students can shift their investment) or to increase the freedom
(allowing the group to split their investment) depending on the level of your group.
You will also need copies of the Student Resource Sheets with the graphs showing the story of the shares. You may decide to have a few of
these per group, as students are likely to need to annotate these graphs heavily.
You might choose to use current versions of the graphs showing the prices, which are available from www.gold.org, www.iii.co.uk and
www.housepricecrash.co.uk.
You might want to share a more explicit example with your group, such as:
•
An investment of £140 225 which was put into LloydsTSB in January 2004, buying 31869 shares at 440p each. This investment was sold
in February 2005 for 510p each, giving a new total of £162 531.90
•
In March 2005, this money was used to buy Tesco shares at around 305p each, giving 53289 shares, which were kept until january 2007,
where they were sold for around 430p per share, giving a new total of £229 142.70
•
This money was used to boy gold in January 2007 at around £11.50 per gram, giving 19.925kg of gold, which as at October 2008 is worth
around £16 per gram, meaning that the original investment is now worth £318 8000
•
This means that the original investment of £140 225 has increased by £178 575, an increase of approximately 127%.