Level 6: Percent tools and credit

Ratio, rates and money · level 6 of 8 · rough age 13-14 (a guide for parents; anyone can start anywhere)

In level 5 you reasoned with proportions and met interest for the first time. In this level one tool, the multiplier, turns every percent problem into a single multiplication or division: changes in a row, going backwards to a price before tax, and percent changes of percents. Repeating the same multiplier gives compound interest, and with it you can see why credit card debt grows so fast, compare real offers fairly, and measure what inflation does to money.

Lesson	You will be able to
Multipliers	Turn any percent increase or decrease into one multiplication, read a multiplier backwards, and explain why discount and tax can go in either order
Successive changes and reverse percent	Combine changes in a row, prove that up and down by the same percent always loses, and find a price before tax or a discount
Percent and percentage points	Tell percentage points from percent, read relative and absolute risk, and handle percents over 100 and percents of percents
Compound interest	Build a year-by-year table, use \(A = P(1 + i)^n\), and compare compound with simple interest on a graph
Credit and debt	Follow a credit card balance month by month, explain why minimum payments take years, and why paying in full matters
Comparing options	Find break-even points, compare buying, leasing and renting, read fine print, and model depreciation and appreciation
Inflation	Use a price index to convert between years, find an inflation rate, and tell when savings lose buying power

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