# Unit 2: Connecting Algebra 2 Concepts to Personal Finance

Objective: Participants will demonstrate the ability to outline high school math concepts necessary to manage personal finances.

1. You will breakdown math skills in finance problems.
2. You will summarize the relationship between high school math classes and wealth management outcomes.

Tech Check:

• Audio capability is required.
• TI-84 Plus graphing calculator (or equivalent) is required.

## How much finance is in Algebra 2 word problems?

As secondary math teachers, we are often required to or choose to use pre-developed curriculum materials. A common source for materials in New York State is eMathInstruction by Kirk Weiler. This is a highly-regarded resource for many reasons, including the accessibility of online lessons with corresponding, alignment with Common Core Learning Standards for Mathematics, and the thorough yet efficient manner in which content is presented. (The author of this mini-course uses eMathInstruction as her primary resource and tweaks or supplements as needed.)

In eMathInstruction Unit 4: Exponential and Logarithmic Functions, Lesson 6: Exponential Modeling with Percent Growth and Decay, Weiler (2018) presents scenario-based word problems to introduce students to the growth or decay of money via interest. In only a few problems, all the main ideas of this financial concept are conveyed.

Let's solve a giant word problem!

"Suppose that you deposit money into a savings account that receives 5% interest per year on the amount of money that is in the account for that year. Assume that you deposit \$400 into the account initially."

1. Navigate to Unit 4 Lesson 6 and complete Exercise #1 on page 1 of the lesson.
2. Work through letters 1a through 1f on your own paper or print out the lesson page. Be sure to write down your work because we will look back at it later.

Check your work by watching this eMath lesson video! Exercise #1 is covered from 0:00 through 8:20. How did you do? Make sure all your written work is correct before moving on.

## What mathematical skills are used in finance problems?

The full-page word problem is never a fan-favorite of students, and for good reason. They can be intimidating, confusing and even impossible, if the student does not have an understanding of the vocabulary or mathematical terminology that is written.

Can you breakdown the math skills you used to solve all the problems presented in this mini-course thus far?

• Look back at your work for solving the two financial literacy problems in Unit 1 and carefully consider each phase of your problem solving process. Add these math skills to the graphic organizer on your Unit 2 Google Doc (#1). Try to identify at least five (5) skills! One has been included to start your thinking.
• Look back at your work for solving Exercise #1 in the eMathInstruction lesson and carefully consider each phase of your problem solving process. Add these math skills to the graphic organizer on your Unit 2 Google Doc (#2). Try to identify at least ten (10) skills! Two have been included to start your thinking.

## How do high school math courses impact wealth management outcomes?

Research shows “that individuals who were exposed to greater math requirements in high school are more likely to accumulate assets, have more real estate equity, are less likely to be delinquent on their loans, and are less likely to declare bankruptcy and undergo foreclosure" (Cole, Paulson, & Shastry, 2013, p. 32).

Contrary to previous literature, Cole, Paulson, and Shastry (2013) found that personal finance courses did not improve savings behavior or have a measurable effect on credit management outcomes and, therefore, states should reconsider their mandates and investment in this type of course. In order to assist students in avoiding costly financial mistakes, states and school districts can “improve financial decision-making by changing high school graduation requirements” (Cole, Paulson, & Shastry, 2013, p. 31). To better understand the methods and strong causal effects of this research, read the authors' Conclusion (p. 33-35). You are encouraged to read the full study or examine the data tables as well, as the details are interesting and applicable to our work as math educators.

To graduate high school in New York State, students must take and pass certain classes and exams. Review the requirements as outlined by the NYS Higher Education Services Corporation.

The table below summarizes the requirements pertaining to mathematics:

Diploma Type Requirement 1 Requirement 2
NYS Regents Diploma Minimum 3 math credits Score of 65 or better on any one mathematics regents
NYS Regents Diploma with Advanced Designation Minimum 3 math credits Score of 65 or better on all three mathematics Regents - Algebra 1, Geometry, Algebra 2

"An increasing body of evidence (e.g., Stango and Zinman 2009, and Grinblatt, Keloharju, and Linnainmaa, 2011) suggests that many individuals make sub-optimal financial decisions because they do not understand the costs and benefits of the choices available to them. The fact that financial outcomes can be altered by exposure to more math instruction suggests that these frictions should be taken seriously, and that it is important to understand how they may influence a broad range of financial behavior, from mortgage contract choice to investment and insurance product selection" (Cole, Paulson, & Shastry, 2013, p. 35).

• What content are students introduced to for the first time in Algebra 2? Return to your Unit 2 Google Doc (#3) and highlight, in yellow, all the content that students are exposed to for the first time in a Common Core Algebra 2 course, or equivalent. In your consideration of 'content,' include concepts, skills, and vocabulary that you used to problem solve.
• Given the current NYS Regents Diploma requirements, can you predict categories of students who are at risk of graduating high school without sufficient understanding of wealth management? Write a paragraph in your Unit 2 Google Doc (#4) to analyze these groups and reflect on their math course experiences in your district.

Although classroom teachers cannot change state graduation mandates, they can integrate financial topics into existing math courses and can mentor all their students, regardless of math tracking practices, to take a math course each year of high school. Math educators hold an influential position in their students’ financial futures!

Continue on to Unit 3: Balancing Computation and Conceptual Understanding.