Financial Algebra

 Last year, several teachers from my district attended a mathematics conference and one of the vendors offered something that I’d never seen before.  As you know, most high schools offer the traditional Algebra I, Geometry, and Algebra II but this vendor offered a financial algebra course which could be used to replace the traditional class.

This is a class that offers many of the same topics but shows how they are applied in finance.  It might show students how advanced algebra is used in things such as discretionary spending, banking, home or auto ownership, business, or retirement.  Furthermore, financial algebra also offers a better opportunity to integrate modeling with the topics.

I looked at one textbook from National Geographic which had chapters on the stock market, learning to model a business, banking and services associated with them, consumer types of credit, employment and taxes, and planning for retirement along with several other topics.   In other words, the class gives students a more in depth understanding of financial topics for personal and business settings.   It takes things a step further than the usual consumer math classes and gives them a better mathematical exposure to finance.

This particular class is a good one to add to the current offerings because it offers a more relatable context for most students who see Algebra as totally unrelated to their lives.  A good financial algebra class will cover topics like linear equations, fractions, decimals, percents, moving averages, exponential functions and exponential growth and decay, limits, recursive thinking, piecewise functions, expected value, parabolas and quadratic formulas, scatter plots and correlation, natural logs and lns, rational expressions, square roots and so many more topics found in a traditional Algebra II class.

If done properly, students will only need to complete the Algebra I class in order to be prepared and a good financial algebra class will reinforce what they’ve learned while introducing them to more complex topics.  

I like the idea of financial algebra because it will answer the question “When will I ever use this?”  I think it will help students to see when and where the material is used in the real world and in their lives.  This is important because it gives context to the math they are learning in school. 

In addition, such a class provides students who struggle with traditional algebra 2 classes a nice alternative and is good for students who do not plan to major in one of the hard sciences.  It offers more advanced algebra than the traditional consumer math classes which are more arithmetic based.  

So schools should offer financial algebra in addition to the more traditional algebra II classes so more students have their needs met while preparing them for the future.  Let me know what you think, I’d love to hear.  Have a great day.