Chapter 1: Saving & Budgeting TEACHER’S MATERIAL

Math Skills Practice 1/3

ACTIVITY MATERIALS
Small group (recommended), pairs, or individual Activity handout; calculator; Internet access
30 MINUTES

OBJECTIVE
Students will practice answering real-world personal finance questions. Students will collaborate and
explain their problem-solving strategies. Students will support and critique the reasoning of their peers.

STANDARDS
Financial Decision Making Standard 1: Recognize the responsibilities associated with personal
financial decisions.
Financial Decision Making Standard 4: Make criterion-based financial decisions by systematically
considering alternatives and consequences.

PROCEDURE
1. Divide students into small groups (two to four per group).
2. Hand out the activity. Review the vocabulary terms and directions with your students.
3. Once students have completed the assignment, call on individual groups to share and explain their
problem-solving strategies to the class. Guide students to both support and critique the work of
their peers. (Note: This should be a lesson that allows for peer support and social collaboration.)

KEY TERMS
Down Payment: The part of the purchase price of a property that the buyer pays in cash
and does not finance with a loan.
Net Worth: A measure of the value a person’s assets (things you own) minus the value of
a person’s liabilities (debts—things you owe).

DIRECTIONS: Discuss the following questions with your partner and formulate an answer in the
space provided. Be sure to show your work and be able to explain how you and your partner arrived at
your answer.

Foundations in Personal Finance: Middle School Edition Chapter 1

Chapter 1: Saving & Budgeting TEACHER’S MATERIAL

Math Skills Practice 2/3

1. Fran owns a new laptop computer she paid $1,300 for last week. She also owns a car
she paid cash for, which is worth $3,200. She has no debt and has $1,800 in her savings
account. What is her net worth?

Answer: $1,300 + $3,200 + $1,800 = Fran has a positive net worth of $6,300

2. Roger recently graduated from college and landed his first job with a nice income. To
celebrate, Roger signed a lease to rent a studio apartment downtown and bought a
$26,000 new car. He only had $500 to use as a down payment, so he took out a loan for
the remaining $25,500. Roger has nothing left in savings, and he has $1,300 in credit
card debt. He also has $12,000 in student loans. What is Roger’s current net worth?

Answer:
ASSETS LIABILITIES
$26,000 value of his car $25,500 loan on his car
$1,300 credit card
$12,000 student loan

$26,000 $38,800
NET WORTH
$26,000 total assets - $38,800 total liabilities = -$12,800 negative net worth

3. Anne recently received a $1,000 bonus at work. She has decided to invest the extra money
in a mutual fund. If the mutual fund earns 10% monthly compounded interest per year,
and she leaves the money in the account for five years, how much money will she have?

Answer: using compound interest formula FV=PV(1+r/m)mt

$1,000 (start)
$1,105 (after 1 year)
$1,220 (after 2 years)
$1,348 (after 3 years)
$1,489 (after 4 years)
$1,645 (after 5 years)

Foundations in Personal Finance: Middle School Edition Chapter 1

Chapter 1: Saving & Budgeting TEACHER’S MATERIAL

Math Skills Practice 3/3

4. Brandon wants to save 15% of his earnings every month for a year. Assume he gets $50
a month from his parents for chores around the house, and he takes home an average
of $250 (after taxes) a month working part-time on the weekends and after school. How
much will he save in one year?

Answer: 12 x $300 = $3,600; $3,600 x .15 = $540 saved in one year

5. Kelsey owns a car with an estimated value of $9,800. However, since she borrowed money
for the purchase, she still owes $8,000. She has $1,900 in a savings account, and she owes
$600 on a credit card. Assign Kelsey’s assets and liabilities to the appropriate column
below, then factor her net worth.

Answer:
ASSETS LIABILITIES
$9,800 value of her car $8,000 loan on her car
$1,900 savings account $600 credit card

$11,700 $8,600
NET WORTH
$11,700 total assets - $8,600 total liabilities = $3,100 positive net worth

Foundations in Personal Finance: Middle School Edition Chapter 1

Student Name: Date:

Chapter 1: Saving & Budgeting

Math Skills Practice 1/2

DIRECTIONS: Discuss the following questions with your partner and formulate an answer in the
space provided. Be sure to show your work and be able to explain how you and your partner arrived at
your answer.

1. Fran owns a new laptop computer she paid $1,300 for last week. She also owns a car
she paid cash for, which is worth about $3,200. She has no debt and has $1,800 in her
savings account. What is her net worth?

2. Roger recently graduated from college and landed his first job with a nice income. To
celebrate, Roger signed a lease to rent a studio apartment downtown and then bought a
$26,000 new car. He only had $500 to use as a down payment, so he took out a loan for
the remaining $25,500. Roger has nothing left in savings, and he has $1,300 in credit
card debt. He also has $12,000 in student loans. What is Roger’s current net worth?
ASSETS LIABILITIES

NET WORTH

3. Anne recently received a $1,000 bonus at work. She has decided to invest the extra money
in a mutual fund. If the mutual fund earns 10% monthly compounded interest per year,
and she leaves the money in the account for five years, how much money will she have?

Foundations in Personal Finance: Middle School Edition Chapter 1

Chapter 1: Saving & Budgeting

Math Skills Practice 2/2

4. Brandon wants to save 15% of his earnings every month for a year. Assume he gets $50
a month from his parents for chores around the house, and he takes home an average
of $250 (after taxes) a month working part-time on the weekends and after school. How
much will he save in one year?

5. Kelsey owns a car with an estimated value of $9,800. However, since she financed the
purchase, she still owes $8,000. She has $1,900 in a savings account, and she owes $600
on a credit card. Assign Kelsey’s assets and liabilities to the appropriate column below,
then factor her net worth.
ASSETS LIABILITIES

NET WORTH

Foundations in Personal Finance: Middle School Edition Chapter 1