Class 08 Activity – Comparing Quantities

 Class 08 Activity – Comparing Quantities

Objective: 

To compare the interests earned on Saving Bank Accounts applying simple interest and compound interest methods, respectively.

Materials Required: Paper, pencil, envelopes and play money.

Procedure: 

Divide the students into four groups. 

Give each group an envelope with Rs 100 play money in it, as the initial deposit money. 

Each group will have the same depositing pattern, however, two groups will have simple interest account and the other two will have compound interest account.

 Students will calculate the interests over five deposit cycles.

 The rate of interest for the four groups can be taken as below: 

Group I: Simple interest of 20 % per cycle 

Group II: Compound interest of 20 % per cycle

Group III: Simple interest of 40 % per cycle 

Group  IV: Compound interest of 40 % per cycle

After every cycle, each group will receive its next deposit and its interest.

The simple interest groups will keep aside the interests received after each cycle. They will add the initial deposit and the total balance obtained after fifth cycle to get the gross total amount. 

While the compound interest groups will deposit the total amount received in the next cycle and therefore, will get the gross total automatically after the fifth cycle. 

Now each group will fill the following tables. 

Group I (Simple Interest of 20 %)

Group II (Compund Interest of 20 %)

Group III (Simple Interest of 40 %)

Group IV (Compound Interest of 40 %)

After the completion of five cycles, the pair of group with 20 % rate of interest will fill the table given below to compare the gross amount earned by the rate of simple interest and rate of compound interest. 

Similarly, the pair of group with 40% rate of interest will fill the table given below.

Now based on the above table, ask the students the type of Saving Bank Accounts they should be opening