UNIT 4 - REAL LIFE DECISIONS
Review:
 Complete questions 1 – 3 to assess your rounding skills
 Complete questions 4, 5 to review your skills at working with percents
 Complete questions 6, 7, 8 to review your skills at working with averages
 Complete questions 9 to review your skills at working with deductions
 Complete questions 10 and 11 to review your skills with graphing.
 Complete questions 12 and 13 to review your skills with time
Section 4.1 – Owning a Vehicle
For this section, you will likely find it very helpful to use the finance function on your graphing calculator. This can be accessed by pressing the “apps” button, selecting “finance”, and then selecting “TVM Solver”.
When using TVM Solver, use the following list of terms
 FV is the future palue of the loan (which will be 0 as the loan should be paid off)
 P is the present value (or the total value of the loan, including taxes)
 I% is the interest rate of the loan. This should be stated in the question.
 N is the number of compounding periods. This will be the number of years for the loan, multiplied by the number of compounding periods per year. The questions should state how many times per year the loan compounds. Typically, this is every month (12 times per year)
 P/Y and C/Y are the number of payments and compounding periods per year. If a loan is compounded monthly, this will be 12. C/Y and
P/Y should typically be the same.
 At the bottom, you will see PMT: END BEGIN. This refers to when the payments are made. Unless told otherwise in the question, keep payments on “END”.
You may wish to print off this page so you can reference the part above as you work.

First, look up the following words “lease” and “depreciation”. They are located on pages 170 and 172.
Do your best to answer the questions on page 170 to 171. This should get you thinking about some of the questions related to owning a car. In addition, this should begin to familiarize you with researching cars and insurance.
In Math 20-3 you should have been introduced to the formula below that is used to calculate compound interest:
𝐹𝑉 = 𝑃(1 + 𝑖) 𝑛 , where:
FV is the future Value
P is the present value
i is the interest rate
n is the number of compounding periods.
When calculating a lease, you can use the same formula. You might want to be careful of the following things however:
 When you input the interest rate (i) into the formula, divide it by
12. i should really be your interest rate PER COMPOUNDING
TERM. Since a lease compounds monthly (or 12 times per year), you need to divide this number by 12.
 When you input the number of compounding periods (n) into the formula, multiply it by 12. The number of compounding periods
(n) refers to the number of times that your interest is calculated.
This is done every month, for every year of your lease. Therefore you take the number of years of the lease, and multiply it by 12.
If you have a calculator that calculates interest, it will have the formula above built in. When entering the values for i and n make sure you likewise multiply the number of terms (n) by 12 and divide the interest rate (i)by 12. The calculator is a helpful tool for calculating compound interest, however you will need to understand the formula to properly use the calculator.
If you would like to review using the compound interest formula above, watch the following videos:

1) Calculating basic compound interest: a basic understanding of compound interest with calculations that compound annually (every year): http://www.youtube.com/watch?v=VyReAhTBvOw
2) Calculating compound interest with calculations that compound more than 1 time per year: http://www.youtube.com/watch?v=z8Qvp-
3ARjM . Note, when you have interest that is compounding more often than once per year, you will need to know how to alter i and n in your formula.
Go over the examples on pgs. 172-174 to ensure you understand this.
Using the compound interest formula can be tricky, even with the help of a calculator. If you have watched the videos above and still don’t understand it, email me at geoff.rosenstein@hfcrd.ab.ca
.
Assess your understanding by completing questions 1 - 7 on pg. 175.
You will need access to the Internet for some of these questions. You are free to use your phone or a computer.
Read over page 177, and the solutions on page 178 & 179. This should familiarize you with calculating costs associated with buying a new vehicle.
After that, try the questions on page 180 to 182. This may seem like a lot of questions, but once you have the hang of using your calculator, you can solve them fairly quickly.
Work through the examples on page 183 to 185. Then try the problems on pgs. 186 and 187.
Section 4.2 – Operating a Vehicle
Part 1: Initial Costs
Write down the definitions and concepts associated with terms fixed
costs and extended warranty (on page 192). Keep it in your notes for easy reference.

Go over the questions on page 192, as well as the solutions. Consider section entitled “Your Turn”, at the bottom of page 193.
Practice: Complete questions 1b, 2, 3, 4, 5, 7
Part 2: Ongoing Costs
Read the definition and concepts associated with variable cost (page
196)
Go over the problems given on pages 196 and 197. Go over the solutions and ensure it makes sense to you.
Try questions 5 on pg. 199
Try page 200 (questions 2-4)
Section 4.3 – Operating a Small Business
Part 1: Revenue and Expenses
Familiarize yourself with this chapter’s terms: expenses, revenue and
profit (pg. 202 - 203). Jot down the relevant info for these terms into your notes, so you can use them later.
Go over the examples on pages 204 to 206 to familiarize yourself with problems relating to Revenues and Expenses.
Try questions 2, 4, 6 on page 207
Part 2: Calculating Net Income
Familiarize yourself with the following terms from page 209:
 Loss
 Net Income
 Also, you should add the term Gross Income, which is the amount of money you earn before taxes.
 Break-Even Point
Write the definitions and related ideas in your notes.

Go over the examples and the solutions on pages 209 to 211.
Try questions 3, 4, 6, 7, 9, 10 on pgs. 212 - 214.
Discuss question 3-8 in pg. 215 with a random person (or random people) in the room. 
Pages 216 and 217 list the skills, and examples of each skill you should know for unit 4, in math 30-3. Check that you understand them all.
Then try the practice test on page 218 and 219.
Complete the Chapter Project (on page 220). Submit this to be marked as a project for the course.
You can now write your unit test for this chapter. Please contact me to let me know that you’re ready to write your test.
Good Luck!
Mr. R