There are all kinds of great ways that financial topics and exponential functions are linked. Borrowing comes to mind immediately as we think of credit card debt and interest, but savings is another good example. A great way to explore exponential versus linear growth is to compare growth in a savings account versus growth with interest. Using any number of the calculators listed in Math Tools you can do this. Some teachers like to use the calculators right away, while others like to have students do the calculations by hand for several iteration and then introduce the calculator to explore growth over longer periods of time. Either way, this topic really lends itself to combining financial decision making and mathematical thinking.
In this example, Million Dollar Mission, students are asked to think about the following two choices:
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You’ll have your choice of two payment options:
- One cent on the first day, two cents on the second day, and double your salary every day thereafter for the thirty days; or
- Exactly $1,000,000. (That’s one million dollars!)