childsmath Question #1 Adding a fixed amount at the end of an interest period (say at the end of a year) is an example of a

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2 Poll Results childsmath Math 2UU3 Poll Results Mathematics and Statistics Question #1 Adding a fixed amount at the end of an interest period (say at the end of a year) is an example of a Question #2 Depreciation is loss of value of some object. For instance, the value of a car that we bought depreciates over time. 1 of :45 PM

3 Poll Results Question #3 One of these rates is APR (annual percentage rate), and the other is EAR (effective annual rate). Which one is EAR? Question #4 The APR is 24%. Interest has been compounded semi-annually, quarterly, and monthly. Which one is interest compounded quarterly? Question #5 Interest on a credit card is based on the APR. What compounding is used? 2 of :45 PM

4 Poll Results Question #6 Average daily balance on a credit card is computed by adding up balances at the end of each day of a billing period and dividing by the number of days in the billing period (billing period is usually a month). Question #7 Which of the following determine(s) the monthly payment on a mortgage? 3 of :45 PM

5 Poll Results Question #8 A subprime mortgage is a mortgage offered at an interest rate which is lower than what a bank pays to borrow money. Question #9 Amortization is the time agreed upon to completely pay off a mortgage. Mortgage term is the same as amortization. 4 of :45 PM

6 Poll Results Question #10 The total amount of interest paid on a mortgage is positively correlated with the amount of monthly payment. 5 of :45 PM

7 Inflation: Measure of the loss of value of money over time due to the increase in prices of goods and services, or loss in our purchasing power (i.e., how much we can buy) Usually measured over a one year period (janjan, sept-sept, dec-dec, or based on yearly averages) How is inflation calculated? Using CPI = consumer price index High school student (5 <=age<=19) monthly pass: 2016 $ $ Due to inflation? 2

8 Avocado toast index conventional grumpy wisdom, most recently articulated by Australian tycoon Tim Gurner, who made international headlines this month for blasting young home buyers for their spending habits. The 35-year-old property developer told the Australian edition of 60 Minutes that when he was saving for his first home, he wasn't buying smashed avocado for $19 and four coffees at $4 each 3

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10 Consumer price index = weighted average of the basket of goods and services which enter the calculation with the following weights 5

11 Each component in the previous slide = further weighted average of sub-components for instance: food = weighted average of food eaten at home and food eaten out Historic CPI, base: 100 = year Source: Stats Canada 6

12 Historic CPI, base: 100 = year 2002 Source: inflationcalculator. ca/historical-ratescanada/ High school student (5 <=age<=19) monthly pass: 2016 $ $ adjusted for inflation: $87.05 so there was a true increase in the price 7

13 Using an inflation calculator (link is on our home page) Note: CPI, and thus inflation, depend on the calculation method used: The tables (3 and 4 slides back) is from Stats Canada CPI calculated as average over 12 months in the calendar year The inflation calculator from Bank of Canada compares CPI s from September of one year to September of another 8