650 CHAPTER 10 Consumer Mathematics Important Facts and Concepts Examples and Discussion Section 10.1 Percent Change Percent change amount in latest period amount in previous period amount in previous period 100 = ⎛ ⎝ ⎜ ⎞ ⎠ ⎟ − ⎛ ⎝ ⎜ ⎞ ⎠ ⎟ × Percent Markup on Cost Percent markup selling price dealer’s cost dealer’s cost 100 = − × Examples 5– 6, pages 588 Examples 7–8, pages 589 Section 10.2 Simple Interest Formula i prt = United States Rule If a partial payment is made on a loan, interest is computed on the principal from the first day of the loan until the date of the partial payment. The partial payment is used to pay the interest first; then the rest of the payment is used to reduce the principal. Banker’s Rule When computing interest, a month is considered to have 30 days, a year is considered to have 360 days and any part of a year is the exact number of days. Examples 1–5, pages 596–598 Discussion, page 598, Example 9, pages 600 – 601 Discussion, page 596, Examples 7–9, pages 600 – 601 Section 10.3 Compound Interest Formula A p r n 1 n t ( ) = ⎛ + ⎝ ⎞ ⎠ ⋅ Present Value Formula p A r n 1 n t ( ) = ⎛ + ⎝ ⎞ ⎠ ⋅ Examples 1–3, pages 607– 610 Discussion page 610, Example 4, page 611 Summary CHAPTER 10 Research Activities 26. Investing in Stocks Write a paper on investing in stocks (see the Did You Know? on page 642). Include in your paper a description of the following terms: New York Stock Exchange, National Association of Securities Dealers Automated Quotations (NASDAQ), dividends, and capital gains. 27. Investing in Bonds Write a paper on investing in bonds (see the Did You Know? on page 644). Include in your paper a description of the following terms: Treasury bonds, corporate bonds, and municipal bonds. 28. Investing in Mutual Funds Write a paper on investing in mutual funds (see the Did You Know? on page 645). Include in your paper a description of the following terms: net asset value (NAV), portfolio manager, and expense ratios. 29. Financial Advisor Interview Annuities, IRAs, 401k plans, 403b plans, SEP accounts, Keogh accounts, and defined benefit plans are all types of investments that can be used to save for retirement. Interview a financial advisor to discuss each of these investment types. Write a paper in which you explain the differences among the different investment types and describe the advantages of each type of investment over the others.
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