8th Graders as Traders and Bankers - Essay Example

Analyze Lesson Plan Analyze Lesson Plan Titus Rock Manickam Order No. 209215 03 March 2008 Analyze Lesson Plan Introduction We are in the stage of world economy when management of finance is gaining equal importance to principles of accounting and banking. The proliferation of information and communication technology with children and young adults comprising huge consumer targets for entertainment, telecom and fast food industries necessitates individuals to learn at an early age the lessons of assets and liabilities, income and expenditure, payment and receipt, profit and loss, principal amount, interest and percentage, and loans, assets and liabilities and so on. Unfortunately, the reality is today a child knows how to browse the net, but does not understand mathematics of the same magnitude, causing an intellectual imbalance and conflict of interests that is neither good for the individual or the society he lives in. Banks, financial institutions and even corporations are turning out schemes aimed at children to boost their saving habits and business acumen. Parents and schools must take advantage of these schemes as part of their curriculum. These help the child understand facts and figures better, edifying his mental capacity. (Britannia Building Society). Teaching the 8th graders By and large, the 8th grade students fall into the age group of 12-14 years. Except for a small percentage of say ten percent each of the brilliant students and students with learning disabilities, the larger segment of students comprise the normal, average pupils for whom learning is routine and sometimes even a bane. Nevertheless, these normal, average students have no major problem putting in the right amount of efforts to secure good, respectable results. The only possibility of something going wrong is when either something or someone becomes cause for negative attitudes to set in. In such cases, mathematics becomes the first subject to become casualty because it requires a great deal of positive concentration on the part of the student. That is why children with emotional problems face difficulties in comprehending mathematical problems. The problem could be quickly and effectively remedied by a considerate teacher through counseling and care. 8th graders as traders and bankers The concept of budget planning, interest, and percentage may appear meaningless and abstract unless it is bound together with the relative important aspects of savings and responsible spending. The student may quickly bond with the concept if it is conveyed as something personally relevant and important to him. Otherwise, she or he may dismiss it as something applicable only to traders and bankers. They may not feel the significance of building a good foundation by grasping this concept. Moreover, the responsibility for parents and teachers to inculcate principled spending habits on their children has increased with the modern day marketing trends to attract young people. (Madhu T). Use of illustrations and methods The 8th graders are on the threshold of the business world where integers, decimals and fractions are part of daily lives. The concept of budget planning, interest, and percentage follow the backdrop of integers, decimals, fractions, whole and natural numbers among other concepts and theories such as geometry. Illustrations, methods of problem solving and practice are the normal means of understanding mathematics. Examples The introduction of budget planning, interest and percentage will make sense to the students if it is done as a concept of daily use in homes and companies. Children will quickly realize what the concept is all about if the teacher explains the way parents run households. From there, the concept must be applied to how traders and businessmen run their trade. Solutions to elementary percentages involving whole numbers, decimals and fractions must be taught and enough problems given to student for practice so that they are thoroughly conversant with the uses and applications of percentages. For instance, examples such as: 1) Convert the following into percentages: (i) 0.07 (ii) 1.07 (iii) 0.17 (iv) 1.17 (v) 0.007 Answers: 7%, 107%, 17%, 117%, 0.7% 2) Convert the following into percentages: (i) (ii) 1/3 (iii) (iv) 1/5 (v) 1/8. Answers: 50%, 33.33%, 25%, 20%, 12.5%. On the second or third day, move over to situational exercises, such as: 1) A trader's annual earning was $ 10,000. His tax liability is 5%. What was his actual total income Answer: 10,000 - 500 = $ 9,500. 2) A fruit seller made total annual profit of $ 50,000. He was taxed @ 10% on the amount over and above $ 30,000. What was the tax amount Answer: 50,000 - 30,000 = 20,000. 10% of 20,000 = $ 2,000. 3) A vegetable vendor's annual income totaled $ 54,000. He was taxed @ 10% on the amount over and above $ 30,000. The vendor invested $ 4,000 on total tax-free 5-years government bond scheme during the financial year. What was his total tax liability Answer: (54,000 - 30,000) - (4,000) = 20,000. 10% of 20,000 = $ 2,000. 4) An engineer's total annual income is $ 60,000. His tax liability is 15% on the amount above $ 35,000. During the financial year, he invests $ 5,000 in a mutual fund scheme which gives him tax rebate of 20% on the invested amount. What was the total tax amount paid by the gentleman Answer: (60,000 - 35,000) - (20% of 5,000) = 24,000. 15% of 24,000 = $ 3,600. Allow the students to practice extensively by creating similar problems without solutions. Personal applications Now that the student is familiar with the general concept, he or she must have the opportunity to apply the concept to his/her personal situations. An average student gets money from parents as pocket money or towards an errand, possibly as babysitter, a newspaper boy, etc. However, a student normally does not earn taxable income. His income is totally tax free. But he can earn interest on his savings. Until the child reaches an age, statutorily 18 years, when he or she responsibly handles finance, the parents must begin inculcating the value of pennies and pounds in the child. (Lori Hendrickson). Saving calculations It is not uncommon nowadays to come across parents who complain that their child is overspending. What does he with all the pocket money he receives, wondered a mother. And he keeps coming back for more! Based on the amount of money the students receives during a specific time, say, a month, he may spend all the money, he may save some money, or he may overspend. If he decides to save money for a purpose, he is in better position to carry out various calculations to reach the target amount. Hence, problems based on savings, incentives to savings, games based on money management like monopoly and online games (not gambling), serve the purpose of generating interest and eagerness to learn. (Enidhi). I have given below specimen of some problems: 1) Tom receives $ 10 as pocket money every Wednesday and another $ 10 for mowing the lawn every Saturday. Furthermore, his father contributes an amount equal to what he saves each year. He also adds 15% as bonus reward on the total amount Tom saves each year. Tom saves the full amount he gets for mowing the lawn. How much does Tom accumulate as savings annually Answer: Tom's total annual savings = 52 x 10 = $ 520. Tom's father contributes $ 520. The total amount adds up to 520 + 520 = $ 1040. Tom's father also adds 15% as bonus reward. Therefore, the bonus amount = 1040 x 15% = $ 156. The total amount Tom saves and receives is 1040 + 156 = $ 1196. 2) Alice wants to learn the guitar and the fees for learning the guitar is $ 250. She decides to enroll for the guitar classes after the school exams which will be held in three months. She receives weekly pocket money of $ 15. He mother has promised her 50% of the fees amount. Assuming she has 12 weeks to collect her share, how much Alice must save every week to reach the target amount Answer: As her mother has promised her half of the fees amount, Alice has to collect the balance 50% of 250 = $ 125. She must save 125 12 = $ 10.42 every week to reach her target amount of $ 125. Teaching by animation It is not practical to teach children the methods of budget planning, interest and percentage by using difficult accounting terms and expressions. It is more effective to take the route best understood by children - cartoons. Use lively instances and characters to build mathematical situations where accounting principles could be easily presented. (It's a Habit Co. Inc.). Getting the big picture Getting financial education early in life is more important and relevant than ever before. The debate on micro and macro economics is taking centre-stage for the only reason that individuals have the means to tap their potential and extend their horizon by keeping tabs on their assets and liabilities, income and expenditures. Today, the potential to access local and online sources to increase business and income is very strong. It is also growing. In the circumstances, it is important that children be sufficiently trained and disciplined to maintain close watch on their balance sheet and future targets. This is a part of budget planning, interest and percentage. Even if their bank balance is maintained under the guardianship of their parents, it is good idea to train them how to tap their hidden talents and abilities to build their assets. Mathematics is a great subject to begin training the child on the issue of saving and making money. This is critically important in the present age when discipline is an essential factor from the point of view of advancing technology and social, economic, environmental and security challenges. (Savings habit 'lost at young age'). Sources: Britannia Building Society, Children's Savings and Investments, http://www.britannia.co.uk/c_savings/product/children/. Madhu T, Times of India, Times Business, Investing, Learning Lessons, Teaching Teenagers the value of money is tough, p.23. www.timesofindia.com. Enidhi, Cultivating the Savings Habit in Children, http://desicritics.org/2008/02/07/004230.php. Lori Hendrickson, Families can help children develop a savings habit, University of Minnesota Extension Service, 12 May, 2005, http://www.extension.umn.edu/extensionnews/2005/savingshabit.html. It's a Habit Co. Inc., News, Products, Teaching children to save money, http://www.itsahabit.com/. Savings habit lost 'at young age,' BBC News, Business, http://news.bbc.co.uk/1/hi/business/3858843.stm. Read More