WEEK 28-BUDGETING-AND-MONEY-MANAGEMENT

Objectives

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Budgeting and Money Management

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2

Story

Budgeting and Money

Simple Interest Rate

Summary

Budgeting Tools

Story

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Budgeting and Money

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A budget helps manage income and expenses to achieve financial goals. Let's see some examples.

Example 1: Monthly income of $2000 with expenses of $1500 leaves a surplus of

Example 2: A student budgets their allowance to save for a new video game.

$500

Surplus= 2000 - 1500 = 500

Total Income - Total Expenses Savings,

The student has to calculate:

and save until they reach the value of the video game.

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1 to 4, or better 1/4=0.25 25%

Surplus refers to the amount of something that remains when the requirements have been met; it is the excess or leftover.

Budgeting Tools

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Monthly Budget Planner

Example 1: A young Peruvian professional tracks their monthly expenses and savings goals with a table.

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Check out the results clicking on "Answer" in the interactive image.

1. From a computer, open gmail, then click on Sheets icon (Green):

2. Create a new Google sheets file:

3. Copy the content shown in the right image.

4. Calculate totals by inserting the following commands: Total earnings in B4: =SUM(B2:B3) Total Budgeted amount: =SUM(E2:E7) Total Actual amount: =SUM(F2:F7) Total Savings: =SUM(G2:G7)

5. If surplus is needed (the excess of money) you can do: Surplus= Total earnings - total expenses (Click on Surplus sheet)

S/: Symbol for Peruvian Nuevo Sol (PEN) Exchange rate at 11/24: $1 USD= S/ 3.8 PEN

Simple Interest Rate

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Now, let's see the simple interest,

An important concept when we are investing our money or need some leverage.

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Let's look at some concepts related with lending and borrowing money in a bank.

r%

P

lend

Interest Rate

Principal Amount

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1

3

4

borrow

To borrow means to take something from someone with the intention of returning it later.

To lend means to give something to someone with the expectation that it will be returned.

It is the initial sum of money that is either invested or borrowed.

If you invest $1,000 in a savings account on January 2023 and withdraw in 2024, the principal amount is $1,000.

A bank lends you $1000 for your business.

You borrow to a bank $50,000 to buy a house.

It is the percentage of the principal amount that a lender charges or an investor earns over a specified period of time.

Suppose you invest $1,000 to a bank and they are going to give the investment plus a 5% in a year. Interest rate: 5%

Formula: Total simple interest is calculated as follows:

Here:

1

is the principal amount.

Periods of time.

P

t

Simple interest is a method of calculating the interest charged or earned on a principal amount over a specific period of time.

I=P×r×t

is the interest rate (in decimal form)

r

Fixed Term Bank Deposits

Suppose you invest $1,000 in a bank at an annual interest rate of 5% for 3 years.

I=$150

To find the simple interest earned, we can plug the values into the formula:

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Note that total interest I is money and interest rate r is a percentage or a decimal.

1. Identify givens.

2. Replace values in simple interest formula.

3. Perform the multiplications.

Formula: Future Value (Total amount) A:

Here:

1

is the principal amount.

Periods of time.

P

t

Future value (or total amount) with simple interest is the total value of the debt or the investment at the end of a specified period

A=P(1+rt)

is the interest rate (in decimal form)

r

Future value=principal amount+interest =P+Prt =P(1+rt)

Try it by yourself:

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Try it by yourself:

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budgeting

simple interest

budgetingtable

Total Income- Total Expenses Savings,

• Interest
• Interest rate
• principal amount
• future value

Summary:Budgeting and Money Management

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Future value=principal amount+interest =P+Prt =P(1+rt)

Welcome 6th graders!

A journey soon begin through Social Science experiences!

Great job!

See you next time

9TH-BUDGETING-AND-MONEY-MANAGEMENT-EN © 2024 by CASURID is licensed under CC BY-NC-ND 4.0

"MA.912.FL.2 Develop an understanding of basic accounting and economic principles."MA.912.FL.2.2 Solve real-world problems involving profits, costs and revenues using spreadsheets and other technology.MA.912.FL.2.5 Develop budgets that fit within various incomes using spreadsheets and other technology.ELD.K12.ELL.MA.1 English language learners communicate information, ideas and concepts necessary for academic success in the content area of Mathematics.

It is highly advised to have:

MATERIAL

• Grid paper.
• Pencils of different colors.
• Eraser.
• A rule.
• A calculator.
• Geogebra installed on your phone/tablet/computer (or use online version).