If you have extra funds, should you invest or pay down your debt faster? In this activity, students use math to make that decision for Lin - a recent college graduate who has $150 for either paying off student loans or investing.

DESMOS: Future Value of a Periodic Investment is part of the Financial Algebra Types of Credit & Modeling Functions Unit. Students extend their knowledge of compounding interest to a more complex scenario that includes recurring investments. 

Compare: Student Loan Repayment Options

The scenario: Lin recently graduated with $24,983 in federal student loans at a 3.73% annual interest rate. Her monthly student loan payment is $250. She is considering whether she should make an additional $150 monthly payment to repay the loan faster. 

First, students compare Lin’s repayment options. The “share with class” option allows students to see each other’s thinking to reinforce the relationship between monthly payments and the total loan cost. 

Make a Prediction: What Should Lin Do?

Before calculating the answer, students decide what they think Lin should do - invest the additional $150 or put it towards student loans? Once they’ve submitted their choice, they can see how three other students responded.

Calculate: Future Value of a Periodic Deposit

Then, students are introduced to the Future Value of a Periodic Deposit formula. They identify the values for each variable from the word problem, then calculate Lin’s investment value after 10 years for each option.

Final Answer: What Should Lin Do?

On the last slide, students see a summary of Lin’s options and make their final decision - what should Lin do? This requires students to synthesize information from throughout the activity and to practice justifying their reasoning using math.

The Teacher Dashboard

As always, you can use the teacher dashboard to monitor student progress, highlight student answers to share with the class, and give feedback. You’ll see check marks when students answer correctly, x marks when students answer incorrectly, and warning signs when students repeatedly check their work.

We hope you enjoyed this activity! You can find this and more in the NGPF Financial Algebra Desmos Collection.

About the Author

Kathryn Dawson

Kathryn (she/her) is excited to join the NGPF team after 9 years of experience in education as a mentor, tutor, and special education teacher. She is a graduate of Cornell University with a degree in policy analysis and management and has a master's degree in education from Brooklyn College. Kathryn is looking forward to bringing her passion for accessibility and educational justice into curriculum design at NGPF. During her free time, Kathryn loves embarking on cooking projects, walking around her Seattle neighborhood with her partner and dog, or lounging in a hammock with a book.