Compound Interest

Watch the video below and then discuss the questions that follow.

Questions

1) What is the difference between Compound Interest and Simple Interest?

2) Over time which interest would earn more , stating reasons for your answer.





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Simple Interest

Simple Interest is the amount of interest accumulated on the original amount of money borrowed (Principal) over a given time period.

Watch this video and attempt the questions directly below it. Remember to post your solutions as comments.

Questions

1) Calculate the simple interest paid if a man borrows $10,000 at a rate of 5% per annum for 5 years

2)  What is the principle that would amount to $7,000 in 4 years at 5% simple interest per annum?

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Utility Bills

                                                               Utility Bills

Utility bills are the bills we pay (usually monthly) to receive the basic commodities we need to run our homes and businesses such as electricity, water, gas and telephone. The situation may occur where our bills are higher than they should ,mainly because of how we use these commodities.

Watch the video below on how to reduce your electricity bill .

Also post suggestions on other ways in which you could cut down on your electricity bill as well as the other utility bills.

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Sales Tax

Have you ever checked your bill after purchasing an item?
Did you notice the price before tax?
Did you notice a difference in the price of the item after tax?

Discuss these questions and share your views.

1) What is Sales Tax?

2) What is the purpose of Sales Tax?



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Loss

Loss occurs in situations where an item is sold for less than it is worth or costs. Have you ever gone to a store and because an item was damaged and it was sold to you  at a lesser price?

When this happens the owner of the item has made a loss because they sold the item for less than they paid for it.

Example

a)A man buys a table for $200 but resells it for $150. What is the loss made?

b) Calculate the loss as a percentage of the cost price.

a)

Loss = Cost Price - Selling Price

Loss = $200 - $150

Loss = $50


b)

Loss = $50        ,         Cost Price = $200

Loss Percentage = (Loss ÷ Cost Price) x 100%

Loss Percentage = ($50 ÷ 200) x 100%

Loss Percentage = 25%

Share the solutions to the following questions

1) A woman buys a vase $50 but after a few days decides to get rid of it quickly by selling it at $40. Determine the loss made.

2) The cost price of an item is $75 but is re-sold at $15 loss, What is the selling price of the item?

3) If an item is bought for $100 and re-sold for $80. Determine the loss percentage .



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Profit

A profit is made when someone sells an item for more money that it costs or is worth.

Example:

 If a book costs $20 and is sold for $30 then the seller makes a profit of $10 because they sold the book for an additional $10 more than it originally costs.

Profit = Selling Price - Cost Price
Profit = $30 - $20
Profit = $10

Note Well: Profit can also be written as a percentage

Profit Percentage = (Profit ÷ Cost Price) x 100%
Profit Percentage = ($10 ÷ $20) x 100%
Profit Percentage = 50%

This is what is done often in stores so that the owners can make a profit. Think about it logically,the store owner wants the business to succeed, so the store must sell the items for more than they were bought for.

Calculate the solutions to the following questions and post your answers

1)  A man buys a chair for $200 and sells it at $250, what is the profit?

2) If an item is worth $40 and is re-sold to make a $30 profit, what is the selling price of the item?

3) A man re-sold a sofa suite at $3000 to make a $500 profit. What was the cost price of the sofa suite?

4) An item costs $70 to make and is then re-sold at $105. Determine the profit percentage earned.




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Hire Purchase

Hire Purchase is the process of buying goods(items) by paying for them in installments over a selected time period. At some point in time you would have heard the term hire purchase from a family member, friend or even a neighbor.

What happens is the customer may not be able to pay the cash price (cost price) of an item based on limited funds so the store would offer to let the customer pay for the item on hire purchase. 

Although this may appear to be good, note that anytime you buy an item on hire purchase, you end up paying back more money that the cash price of the item.

This is the generic formula used to buy an item on hire purchase

Hire Purchase = Deposit + Total Monthly Installments


Using this knowledge, attempt the following question.

Question

A man buys a stove hire purchase by paying a deposit of $400 and 12 monthly installments of $300 each. Determine the total Hire Purchase Price

Comment with your Solutions or Queries




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Consumer Arithmetic

Consumer Arithmetic

Every time we purchase an item we use consumer arithmetic without even thinking about it. We just go about our day, with the knowledge that money is used to buy goods (items) without fully appreciating the logic and reasoning behind each purchase.

This unit of work will focus on profit, loss, hire purchase, sales tax, utility bills, simple interest and compound interest..

All these things we will encounter at some point in our lives, if not ourselves maybe through someone we know.

The tools necessary to  successfully purchase your items will be discussed in this blog, to help sharpen your skills and empower you for life

So good luck, enjoy and happy purchasing!!!!








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