NetLogo Models Library:
This model is a simple activity designed to teach compound interest. Students have a choice between investing their money with a teacher-controlled interest rate or using their money to purchase a car at a teacher defined price.
Teacher: Follow these directions to run the HubNet activity. Optional: Zoom In (see Tools in the Menu Bar) Teacher: Open up the HubNet Control Center (see Tools in the Menu Bar). This will show you the IP Address of this computer. Everyone: Open up a HubNet Client on your machine and input the IP Address of this computer, type your user name in the user name box, and press ENTER.
Teacher: Setup the activity by selecting a cost for cars and an interest rate using the CAR-COST and INTEREST-RATE sliders and press the GO button. Everyone: Decide how to use your money by either investing, adjusting the FRACTION-TO-INVEST slider and pressing the INVEST button, or buying a car with the BUY-CAR button.
Teacher: Press the NEXT-ROUND button. Students who have invested will receive the calculated interest.
Teacher: To the activity again with the same group, press the SETUP button to return all students back to the initial conditions. To run the activity with a different group of students press the RESET button in the Control Center and follow these instructions from the beginning.
RESET - Returns all current users to the initial state. This should be used to restart the activity. GO - runs the activity NEXT-ROUND - Students who have invested will receive the calculated interest and all students will be given the option to invest again.
CAR-COST - Sets the cost of each car. INTEREST-RATE - Sets the interest rate for all investors.
ROUND - Indicates the number of investment rounds have already been completed.
After logging in, if GO is pressed in NetLogo the client interface will appear for the students and the student will be assigned a turtle and 100 dollars which will be displayed in the MY MONEY monitor. The current round will be displayed in the ROUND monitor starting out with one. The money they have currently invested will appear in the INVESTMENT monitor, the return from their previous investment will be in the INVESTMENT-RETURN monitor, and the number of cars they own will be in the CARS monitor. These will all be initialized to zero.
Each round the student manages their money by either selecting a fraction to invest with the FRACTION-TO-INVEST slider and pressing the INVEST button, or buying a car with the BUY-CAR button.
There are at least two possible ways to run this model with a a group of students. One way is to tell students the number of rounds in the activity. Another way is not to tell them. If you try both ways, students may realize that it is important to figure out a strategy, and that knowing how the market behaves is helpful for choosing a strategy. Other activity options are to change the cost of the car and/or the interest rate in the middle of the activity. Note the difference between these two changes. Students know the price of a car before buying it. But students who invest money are taking a risk, because the teacher can wait for everyone to invest and only then change the interest rate. If students think this is unfair, they should discuss what the rules of the game should be and how these rules would reflect (or not) a real market.
The teacher should try both telling students the number of rounds in the activity and ending after a randomly selected number of rounds without informing the students. The students should think about how they should adjust their strategy for each set of conditions. The teacher should also adjust the interest rate and the cost of a car throughout the game to simulate an indeterminate market.
Currently all of the conditions of the world are controlled by input from the teacher; these variables, cost of car, interest rate, and number of rounds, could be controlled automatically by the model. There is only one type of investment now, try adding low or high risk investments so the rate of return is not always the same.
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Copyright 2004 Uri Wilensky.
This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License. To view a copy of this license, visit https://creativecommons.org/licenses/by-nc-sa/3.0/ or send a letter to Creative Commons, 559 Nathan Abbott Way, Stanford, California 94305, USA.
Commercial licenses are also available. To inquire about commercial licenses, please contact Uri Wilensky at firstname.lastname@example.org.
This activity and associated models and materials were created as part of the projects: PARTICIPATORY SIMULATIONS: NETWORK-BASED DESIGN FOR SYSTEMS LEARNING IN CLASSROOMS and/or INTEGRATED SIMULATION AND MODELING ENVIRONMENT. The project gratefully acknowledges the support of the National Science Foundation (REPP & ROLE programs) -- grant numbers REC #9814682 and REC-0126227.