This is a level 3 and 4 number activity from the Figure It Out series. It relates to Stage 6 and 7 of the Number Framework.

A PDF of the student activity is included.

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find 1/3 of a money amount

use addition and subtraction to solve money problems

use multiplication to solve money problems

**Number Framework Links**

These activities are appropriate for students who are very comfortable working at stage 6 and for those who are at stages 7 and 8. The activities involve the reading, addition, subtraction, multiplication, and division of dollar amounts and whole numbers. (See the table of NDP material on page 4.)

A calculator

FIO, Level 3-4, Financial Literacy: Granny’s Gift, Paying the Bills, pages 26-27

A classmate

#### Activity One

*Financial understanding*

In this activity, Sione develops a weekly budget to help him predict and plan for his regular expenses. Financial planning is important for personal and business financial success.

Sione needs to identify, assess, and manage the risks of additional expenses in his flat. Students are often very interested in the adult world of paying bills and other living expenses. Having some real bills on hand to show students will make this activity more real.

As an extension, the students might be interested in hunting for a flat for Sione in the newspaper or on the Internet. It needs to have three bedrooms to accommodate Sione and his two flatmates. Suggest that they work out the initial payment for each person, including bond (for example, the equivalent of 4 weeks’ rent), rent in

advance, and any fees to an agency. The total may amaze them!*Mathematics and statistics*

Question 1 focuses on utility bills. Sometimes it’s hard to navigate the information on a bill because it shows past balances and payments as well as those that are current. Usually, the most important information is in bold font. On this bill, the opening balance is $0.00, which means the last bill was paid in full. $148.33 is the

current charge, and $133.50 is the discounted charge. Flatmates usually share power bills equally. The extra cost for each person for paying this bill late would be $14.83 ÷ 3 = $4.9433333, which rounds up to $4.95.

Students may need to discuss this question with you to understand the issues raised in the Answers.

Question 2 focuses on a weekly budget. Rent, food, and transport are basic expenses. The students may also be interested in discussing whether or not Sione needs any kind of insurance (such as medical or contents insurance). For question 2b, the students will have already worked out that Sione’s share of the power and

phone bills for 1 month is $44.50 + $15 = $59.50. When budgeting, rounding up is appropriate because sometimes bills are slightly more and it is financially better to overbudget than to underbudget. Rounding the bills to $60 per month is sensible because it’s easy to divide by 4 to estimate a weekly allowance. (Note that a

month has slightly more than 4 weeks. Allowing $15 per week will generate a “bonus” $15 every 3 months, which will provide some cushioning for any extra-large bills.)

A useful template for Sione’s budget in question 2c is:

After compiling a weekly menu and making a shopping list, students could visit a supermarket (after school hours or online) to find the total cost for the week. Students also need to consider consumables such as toilet paper, dishwashing liquid, and soap, although these items don’t need to be purchased every week.**Extension****Mathematics and statistics**

Students may wish to imagine Sione has his own car instead of relying on the bus to get to university. He would need to include weekly petrol costs plus an estimate of the weekly costs incurred with owning a car. To calculate this, they need costs for insurance, registration, warrant of fitness, and servicing, divided over the 52

weeks of the year. Students may also wish to add to this the possible costs of maintenance, such as having to replace tyres.

#### Activity Two

*Financial understanding*

This activity emphasises that you sometimes have to sacrifice the things you want in order to buy the things you need. People make different financial decisions because they have different preferences. For example, Sione is prepared to save and wait for his laptop rather than getting it immediately and committing to a hire purchase

agreement.*Mathematics and statistics*

Question 2a is a good opportunity to use tidy numbers and halving.**Extension***Financial understanding*

Most students are very motivated to complete an extra investigation in the form of a flatting assignment. Given a specified income (for example, $28,000) they can calculate income tax, find a flat in the newspaper or on the Internet, and complete their own budget for a week or a month. In small groups, students can look for a flat

and plan meals. Imagining the location of “work” to be in the vicinity of the school makes it easy to calculate transport costs and provides a limitation to the location of the flat. The students need to be reminded that they would have to pay adult fares for bus travel and entertainment such as movies!

**Social Sciences Links**

Achievement objectives:

• Understand how formal and informal groups make decisions that impact on communities (Social Studies, level 4)

• Understand how the ways in which leadership of groups is acquired and exercised have consequences for communities and societies (Social Studies, level 4)

Students could investigate the following: How do people in flats organise themselves (that is, so that bills get paid, food gets cooked, supplies get bought, the house gets cleaned)? Do they need a leader? If they did have someone in charge, how might that work? What consequences might there be as a result?

Other Cross-curricular Links

Technology achievement objective:

• Technological Products: Understand the relationship between the materials used and their performance properties in technological products (Technological Knowledge, level 3)

Students could discuss the relative merits of buying cheap or second-hand equipment (for example, whiteware or a communal DVD player) to save on costs. Should people who are flatting include in their budget a sum for replacement costs?

#### Answers to Activity

**Activity One**

1. a. $44.50. ($133.50 ÷ 3)

b. $4.95. ($14.83 ÷ 3, rounded)

c. Sione’s name is on the bill. Discussion will vary regarding the risks, but if one or both of the other flatmates left without paying their share, Sione might have to pay it all (he couldn’t expect new flatmates to pay past costs). If Sione refused to pay more

than his share, the electricity company could cut the power off and, later on in his

life, refuse to take Sione on as a customer. d. Sione and Asif: $15 each; Peter: $35. (They share the line rental equally, but Peter has to be responsible for his own toll calls.)

2. a. Discussion will vary. Regular expenses will include rent, food, transport, and

probably entertainment.

b. Approximately $15. ($44.50 + $15 = $59.50 per month.) He will need to allow a

bit more for higher power bills in winter.

c. Budgets will vary. A budget for Sione should include $15 for power and phone,

$90 rent, $18 transport, and at least $50 on food and household consumables (toilet

paper, dish-washing liquid, and so on). This only leaves him about $27 for savings,

entertainment, and clothing, although he may also have a student allowance.**Activity Two**

1. a. $2,950.20. ($81.95 x 36; note that the advertisement in the window on page 27

has different terms from those for Sione’s laptop.)

b. No. The guarantee is for only 2 years, and 36 months is 3 years.

c. $1,151.20. ($2,950.20 – $1,799.00)

d. Discussion will vary. Advantages include:

He will save himself $1,151.20 over 3 years; he can sell the laptop whenever he wants to (for example, to get a later model after 1 year) because he owns it; he doesn’t have to allow for $81.95 a month in his budget.

Disadvantages: He has to pay the cost all at once instead of spreading it out. He hasn’t got the use of that money for other things.

2. a. 1 years. ($1,799 – $500 = $1,299. $1,299 ÷ $20 = 64.95 [weeks]. For easy

calculation purposes, you could round this amount to $1,300.00: $1,300.00 ÷ $20

= 65 [weeks]. 65 weeks is 1 year and 3 months.)

b. Answers will vary. Sione might have friends or relations with computers; he may able to budget for renting time on a computer in a shop or library (including the cost

of printing out his work). He can use a university computer for free but has to pay

printing costs and for Internet use.**Reflective question**

Answers will vary. You might advise them to make a budget and stick to it! They could start by making a list of their regular bills and see how much of their income they use to pay them and when in the month they fall due (if all the bills fall in the same week, that makes it very hard to budget); you might discuss wants versus needs; you might suggest they keep a log of all their expenditure for a month to see

where their money is going.