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Worksheet:  Answers to PowerPoint:  Budget: What is it?
 

Worksheet: Answers to PowerPoint: Budget: What is it?

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Worksheet: Answers

Worksheet: Answers
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    Worksheet:  Answers to PowerPoint:  Budget: What is it? Worksheet: Answers to PowerPoint: Budget: What is it? Document Transcript

    • A Budget: What is it? - PowerPoint A Budget: What is it? – PowerPoint ANSWERS Name of Student: .............................................................................. Part A In your own words explain each of the following? “Budgets create financial security.” “Budgets are very empowering.” “A Budget can help you reach a financial goal because it controls how much you spend and how much you save.” “A Budget is the cornerstone of a solid financial future.” “Budgeting doesn’t lead you away from something it leads you towards a financial goal.” Difference between FIXED and VARIABLE expenses. Angela Ballas – Answers ~1~
    • A Budget: What is it? - PowerPoint What is the RULE OF THUMB? “People don’t plan to fail; they fail to plan.” Part B Why should you keep in mind the acronym SMART when it comes to financial planning? Explain each of the five (5) words formed from this acronym, in your own words. ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... ........................................................................................................................................................................................... Angela Ballas – Answers ~2~
    • A Budget: What is it? - PowerPoint Part C Simple Interest A. Principal amount: 1,000 Interest Rate: @ 5% per annum/year Based on this work out the following: Value after: Interest Principal plus Interest Total 5% of $1,000 One year $1,000 + $50 $1,050 5/100[.05] x 1,000 = $50 Five years $50 x 5 = $250 $1,000 + $250 $1,250 Eight years $50 x 8 = $400 $1,000 + $400 $1,400 Ten years $50 x 10 = $500 $1,000 + $500 $1,500 Twelve years $50 x 12 = $600 $1,000 + $600 $1,600 B. Principal amount: 2,000 Interest Rate: @ 10% per annum/year Based on this work out the following: Value after: Interest Principal plus Interest Total 10% of $2,000 One year $2,000 + $200 $2,200 10/100[.1] x 2,000 = $200 Five years $200 x 5 = $1,000 $2,000 + $1,000 $3,000 Eight years $200 x 8 = $1,600 $2,000 + $1,600 $3,600 Ten years $200 x 10 = $2,000 $2,000 + $2,000 $4,000 Twelve years $200 x 12 = $2,400 $2,000 + $2,400 $4,400 Angela Ballas – Answers ~3~
    • A Budget: What is it? - PowerPoint Part D Rule of 72 How many years will it take to double your money at...?: It will take.... 5% per year 72/5 = 14.4 years 7% per year 72/7 = 10.28 (10.3) years 9% per year 72/9 = 8 years 10% per year 72/10 = 7.2 years 13% per year 72/13 = 5.55 years Part E Compound Interest Using the calculator at: http://www.calculator-tab.com/ You have $1000 at a rate of 5%pa for one year You have $1000 at a rate of 5%pa for 3 years A=1,000(1+5%)1 A=1,000(1+5%)3 A=1,000 x (1+0.05)1 A=1,000 x (1+0.05)3 A=$1,050 A=$1,157.63 You have $1000 at a rate of 10%pa for 1 year You have $1000 at a rate of 10%pa for 3 years A=1,000(1+10%)1 A=1,000(1+10%)3 A=1,000 x (1+0.1)1 A=1,000 x (1+0.1)3 A=$1,110 A=$1,331 You have $2000 at a rate of 5%pa for 1 year You have $2000 at a rate of 5%pa for 3 years A=2,000(1+5%)1 A=2,000(1+5%)3 A=2,000 x (1+0.05)1 A=2,000 x (1+0.05)3 A=$2,100 A=$2,315.25 You have $5000 at a rate of 10%pa for 1 year You have $5000 at a rate of 10%pa for 3 years A=5,000(1+10%)1 A=5,000(1+10%)3 A=5,000 x (1+0.1)1 A=5,000 x (1+0.1)3 A=$5,500 A=$6,655 Angela Ballas – Answers ~4~