Pedro has $50 in a savings account. The interest rate is 10% per year and it is not compounded. How much interest will he earn in 2 years?
$10
When do we use this formula: Simple or compound interest?
I = Prt
Simple interest
What is a credit report?
collection of information on how you pay bills, repay loans, and monthly debts
What is a variable cost?
Variable costs: costs that change with other factors
What are stocks?
Stocks: ownership of a fraction of a corporation
Chloe borrows $800 from a bank. The interest rate at the bank is 4%, compounded annually. To the nearest cent, how much will she owe in 3 years?
$899.89
How many weeks in a year?
52
What are 3 things to look for on your credit report?
Personal identification information
Credit history
Report inquiries
Dispute statements
Public records
Maintenance
Fuel
Define: Available credit
The remaining amount of money you can still spend to reach your credit limit.
This month, Andrea had a previous credit card balance of $45, bought a sweater for $25.50, paid for a dinner out which cost $55.00, bought a book for one of her classes for $62.25, and treated herself to 3 new CD’s which came to $47.62. She had made an early payment of $50. How much would she owe on her due date?
$185.37
What does n mean in the compound interest formula?
number of times we compound
Name 3 investment alternatives
What is a fixed cost? Provide an example
Fixed costs: costs that do not change (remain constant)
License fee
Insurance
What is the depreciation of a car?
Depreciation: car loses its worth over time
Tamika invested $1000 in a GIC (Guaranteed Investment Certificate) in her bank. If it is growing 2.3% compounded annually, how much would it be worth in 3 years?
$1070.59
What does quarterly mean?
4 times per year (every 3 months)
Name 5 fees associated with bank accounts
cost of cheques, monthly statement fees/paper statement fees, early withdrawal penalties, minimum balance fees, overdraft/NSF fees, overdraft protection fees, returned deposit fees, ATM fees, debit card transaction fees
List 3 factors affecting insurance rates and explain 1 of them
Gender: In Ontario, men paid 27 per cent more than women for car insurance
Age: Drivers in the 18-25 age range pay higher average car insurance
Driving record: the less tickets you have received, the less you pay for insurance
Model of vehicle: High-end luxury cars usually cost more to insure
Use of vehicle (i.e. business, personal): the more you use it, the higher your insurance
How many compound periods if I am compounding biweekly for 3 years?
2 times a week x 52 weeks in a year x 3 years = 312 periods!
The population of Mathville is 23000. Each year the population increases at a rate of 3.4%. What would the population be after 5 years?
$27, 185.07
Compound interest
What is an overdraft/NSF fee? Provide an example
fee for when you spend more money than in your account (i.e. when a cheque bounces or you forget about your monthly netflix subscription)
List 3 costs associated with owning a car. Explain 1 of them.
Monthly payments: cars cost a lot of money, likely - you won’t be able to pay for it all in one go, you will likely make biweekly payments to pay off your car
Insurance: monthly payments to cover the loss of your vehicle in an accident
Depreciation: car loses its worth over time
Maintenance: car needs oil changes, tire rotation, winter tire change, wiper blades, engine air filter, brake & brake pads, car wash & fluid top ups
What is an overdraft protection fee?
Overdraft Protection Fees: a fee to protect you from the overdraft fee