This document provides teaching guidelines and student material for a unit intended for use in 12th grade algebra classes. Time allotment is from four to six hours of classroom time. The objective of this capsule is to teach students how to solve compound interest problems using arithmetic, logorithms, and calculators. Prerequisites for the unit are second year algebra, a working knowledge of logorithms and exponential equations, and an available calculator. The student material is divided into three sections. Section I focuses on solving compound interest problems, deriving the compound interest formula, and analyzing several savings accounts to determine which pays the most. Section II emphasizes using the compound interest formula, while Section III concentrates on solving compound interest problems for the rate of interest for the time the money was in the account. Seven activity sheets provide word problems relating to compound interest and a comparative analysis chart. Three supplementary activities focus on computer program problem solving and further comparative analysis. The teacher's guide provides a list of needed materials, advance preparation information, keys to activities and tests, a bibliography, and copies of all worksheets and assessments. (CK)