Consumer Math

Consumer math is a branch of math that uses basic math skills in real life situations like shopping, calculating taxes, estimating monthly budget, calculating interest rate for a loan, etc. Teaching kids about spending, saving and other aspects of "money math" will prepare them to make better financial decisions.

Example 1:

When you round $35.98 to the nearest dollar, you get $36.

Next you calculate 20% of $36

`36` x`20/100` = `7.2`

So, 20% tip on a bill of $35.98 is approximately $7.2

Example 2:

First calculate the discount price by multiplying the rate by the original price.

`30` x `40/100`=12

So, the discount price is $12

Now subtract the discount price from the original price to find out the sale price.

30 – 12 =18

The sale price is $18

Example 3:

Just divide the total cost by the quantity to get the unit price.

`5.50/10` = `0.55`

The unit price is $0.55 per battery.

Basic vocabulary

Budget It is income and expenses for a given period of time.
Debt Money that is owed or due.
Expense Money spent on buying things.
Salary Payment made to an employee.
Utilities Cost for electricity, water, gas, etc..
Loss A reduction in the value of an investment.
Profit Money earned from a business activity.
Tip Money given to a worker such as a waiter to express appreciation for service.
Percent One part of a hundred.
Unit price Cost of one unit of measure of an item.

Advanced vocabulary

Simple interest Interest calculated on the principal of a deposit or loan.
Compound interest Interest added to the principal amount so that the added interest also earns interest.
Discount Deduction from the usual cost of a thing.
Loan Money that you borrow and must pay back with interest.
State tax Money that the state collects based on your earned income.
Bonds A loan you give to company or government at a pre-determined interest rate and for a specific time .
Sales tax Tax paid for the sales of goods and services.
Commission Money paid to an employee or agent based on percentage of the sales made.

In the following pages, we will talk about percentage, simple interest and compound interest.

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