How can math help students synthesize real-world stock market data? In these two Desmos activities, students explore different approaches to modeling data with exponential functions.

The First Activity: Compound Annual Growth Rate

Students are introduced to the Compound Annual Growth Rate (CAGR) formula in DESMOS: Comparing Funds Using Compound Annual Growth Rate. Using this formula, they can find the annual rate of return that would be required for an investment to grow from its beginning balance to its ending balance.

As you can see below, using the CAGR as the growth rate enables students to write a smoothed exponential function to represent the investment’s growth over that time period. The function passes through both the initial and final investment values.

The Second Activity: Exponential Regression

Regression models are another way to summarize real-world data. In DESMOS: Exponential Regression in Investing, students find the exponential regression model that best fits the given data. In this activity, students are focused on extrapolating a trend line, not matching the initial and final investment values as they did with the CAGR. 

This activity includes a fun whole-class game where students compete to draw the best model summarizing Alphabet stock prices since 2015. They choose an avatar, submit their model, and then see a leaderboard of the three top models with the highest r-squared values. 

Both of these activities are part of the new Financial Algebra unit: Investing Strategies & Exponential Functions. Explore the Financial Algebra course here!

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.