Calculating Compound Interest: I Do, We Do, You Do

Educator incorporates the calculation of compound interest into their instruction using a gradual release model
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About this Micro-credential

Key Method

The educator understands the value of gradually releasing responsibility for learning to students and uses the “I Do, We Do, You Do” strategy to enable students to calculate compound interest.

Method Components

Empirical evidence supports the theory that student learning increases when thinking is made visible. To build critical thinking, students need to be able to articulate and illustrate how they think about concepts, what strategies or information they use to build understanding, and why they selected a particular strategy or approach.

What is an I Do, We Do, You Do activity?

This teaching strategy is a gradual release model that provides scaffolding for students as they learn a new concept or process. The responsibility gradually shifts from the teacher to groups of students with the teacher’s aid, and finally to the students individually.

Components of an I Do, We Do, You Do activity

  • The strategy begins with direct instruction from the teacher, who models thinking and understanding in a way that guides students through a problem.
  • In the next step, students work in pairs or small groups, with assistance from the teacher, to try to solve a new problem.
  • The end goal is for students to demonstrate mastery of the concept or process on their own without help from classmates or the instructor.

Suggested Implementation

  1. Provide direct instruction or another teaching method to introduce and define compound interest.
  2. Create a word problem that requires the use of the compound interest formula. An example could be: “Monique is deciding where to invest $5,000. One option is a high-interest savings account that pays an annual interest rate of 2.7%, which is compounded every quarter. What would the balance of her investment be after five years?” (See the resources below for the formula.)
  3. The teacher should then walk the students through the word problem (guided instruction), modeling the use of the formula and annotating the thinking processes that take place while solving the problem.
  4. Students should then try a new problem with a partner or small group, with limited questions for the teacher (collaborative learning).
  5. Lastly, the students should solve a new problem without aid from the teacher or other students (independent work).

Research & Resources

Supporting Research

  • The following source summarizes key research on modeling, guiding student practice, and scaffolding:
    Rosenshine, Barak. “Principles of Instruction: Research-Based Strategies that All Teachers Should Know.” American Educator (2012): 15-28. American Federation of Teachers. Web. 24 Oct. 2015.
  • “Instructional Scaffolding to Improve Learning.” Spectrum Newsletter. Ed. Faculty Development and Instructional Design Center. Northern Illinois University, 2008. Web. 24 Oct. 2015.


  • “Compound Interest Formula.” Quantitative Reasoning Center. DePaul University, n.d. Web. 2 Dec. 2015.
  • Foreman, Gary. “10 Things You Need to Know About Compound Interest.” U.S News & World Report. N.p., 20 Sept. 2012. Web. 5 Dec. 2015.

Submission Requirements

Submission Guidelines & Evaluation Criteria

The items in this following section detail what must be submitted for evaluation. To earn the micro-credential, you must receive a passing evaluation for Parts 1, 3, and 4, and a “Yes” for both artifacts submitted for Part 2.

Part 1. Overview Questions

(200-word limit):

  • How did you set up this lesson with background knowledge about compound interest, before discussing calculation?

Part 2. Work Examples/Artifacts

Submit one video that demonstrates your competence with the “I Do” and “We Do” steps of this strategy.

Also submit one sample of student work that shows the correct calculation of compound interest from a word problem.

Part 3. Student Reflection

Provide two written reflections from students who participated in the activity used for submission of Part 2. Use the following question as guidance (200-word limit):

  • How did the activity you completed in class help you understand and calculate compound interest?

Part 4. Teacher Reflection

Provide a reflection on what you learned, using the following questions as guidance (300-word limit):

  • How did this technique help you communicate this personal finance content to your students?
  • Which other personal finance topics can this teaching technique be used for in the classroom?

Part 5. Survey (Optional)

Please answer a brief survey about your experience teaching personal finance. Your responses will:

  • help us understand barriers personal finance teachers face;
  • and help us improve the resources being offered to personal finance educators

We appreciate your help.

Except where otherwise noted, this work is licensed under:
Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)


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