Maths and Money - Real-World Applications
Money maths isn't just about passing exams - it's about making smart financial decisions throughout your life. Whether you're comparing phone contracts, understanding your first payslip, or planning a trip abroad, these skills are genuinely essential.
Simple interest stays the same each year, while compound interest grows because you earn interest on your interest. If you invest £100 at 30% simple interest for 4 years, you'll have £220 total. With compound interest, you'd have £285.61 because each year's interest gets added to the pot.
Exchange rates work through direct proportion - if £1 = 1.40,then£200=280. Always check which direction you're converting and use the inverse operation to go backwards. When comparing unit prices, divide the total cost by the number of items to find the cost per unit.
Understanding VAT (Value Added Tax) is crucial - it's 20% added to most purchases in the UK. Essential items like food are VAT-free, but luxury items aren't. Your future salary will be taxed in brackets, so the more you earn, the higher percentage you'll pay on the top portion.
Key tip: Always estimate your answers first - if your calculation seems wildly off, you've probably made an error!