“Ponzi” Pyramid Schemes

Use mathematics to show your classes the power of a good model. Young mathematicians analyze the famous Ponzi pyramid scheme using an exponential pattern. They make conclusions on the reliability of the plan and why it is illegal. 

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CCSS: Designed
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Instructional Ideas
  • Use as an introduction to exponential functions, and to illustrate how quickly an exponential model can grow
  • Form collaborative groups to complete this task; ask for multiple ways to explain the solution to the first question
  • Ask learners who are having difficulty finding a pattern to create a table that represents the number of people paying after each new send
  • Connect to a social studies unit in which class members research historic and modern examples of Ponzi schemes
Classroom Considerations
  • Learners that do not have practice answering open-ended questions may need guidance with expectations
Pros
  • Includes several examples of student work
  • Shows the various methods pupils can use to solve the problem
  • Provided rubric gives an idea of what to look for when assessing work and how to assign points
Cons
  • None