DIRECTIONS: Four short passages, all about money. Only the SHAPE is different.
After three sentences, ask: what does the writer still owe me?
The four shapes: sequence ·
compare and contrast · cause and effect · problem and solution
A
Put $1,000.00 into an account paying 5% a year and leave it there. First nothing much happens. After one year you have $1,050.00, which is hardly worth mentioning, and after two you have $1,102.50. By the third year it is $1,157.63. Then the years start doing something. At ten years the account holds $1,628.89; at twenty, $2,653.30; at thirty, $4,321.94. Nobody added a penny after the first day. The last ten years on their own put in $1,668.64, which is more than the first twenty managed between them.
This one is built as
B
There are two ways an account can pay you. Simple interest pays 5% of what you first put in, every year, for ever. Compound interest pays 5% of whatever is in there now. Over one year they are identical. Over thirty they are not: $1,000.00 earning simple interest becomes $2,500.00, whereas the same money compounding becomes $4,321.94. Both accounts advertise the same rate, but the difference between them is $1,821.94 — more than the original deposit.
This one is built as
Four Ways to Build It — continued
Grade 6 · Reading · Page 2 of 4
C
Why does compounding pull away like that? Because the interest does not go into a separate pile. It joins the money, so next year the account pays interest on the interest as well. In year one the 5% is charged on $1,000.00. In year thirty it is charged on more than four times that. Nothing about the rate changed and nobody made a decision. As a result, the growth is not a straight line but a curve that gets steeper the longer you leave it alone.
This one is built as
D
The same machine runs backwards. Owe $2,000.00 on a card at 20% and the card asks for a minimum payment — about $40.67 that first month. The trouble is that the minimum shrinks as the balance does, so the payments get smaller exactly as slowly as the debt does. Paying it takes 237 months and costs $6,863.82. One fix costs nothing at all: keep paying that first $40.67 every month instead of whatever the card asks for. Same money in month one. The debt clears in 104 months and costs $4,213.91.
This one is built as
Go back and fill in the line under each passage. Then, for two of them, write down the words that gave the shape away.
What the Shape Was For
Grade 6 · Reading · Page 3 of 4
The number $4,321.94 appears in two of these passages. Say what job it is doing in each one — they are not the same job.
Passage D states a problem and then answers it. If the writer had stopped after the problem, what would the passage still owe you? That debt is what a structure promises.
The Shape You Would Choose
Grade 6 · Reading · Page 4 of 4
Passage C could have been written as a sequence, like A. What would it lose? Say what the "because" is doing that "then" could not.
A friend does not see why they should open a savings account now rather than in ten years. Which of the four shapes would you use, and why that one?