1.8 Personal finance
Money management
Everything on money management that can come up in the WJEC GCSE Mathematics and Numeracy, in all three units. Each skill below has the method, the mistake that costs the most marks, a worked example, and free practice marked the way WJEC marks it.
Practise money management free
A worked example
Mortgages · [3 marks]
The Hughes family borrow £180,000 on a mortgage. They pay £750 every month for 25 years. How much more do they pay back than they borrowed?
- M125 × 12 = 300 payments
- M1300 × £750 = £225,000
- A1£225,000 − £180,000 = £45,000
The exam skills (4)
Payslips
- Add up all the deductions (tax, National Insurance, pension).
- Net pay = gross pay − deductions.
- Give the answer in pounds and pence.
Watch out: Taking off only the tax.
Mortgages
- Number of payments = years × 12.
- Total paid = payments × monthly amount.
- Extra paid = total paid − amount borrowed.
Watch out: Forgetting to multiply the years by 12.
Budgeting
- Add up everything spent.
- Take it away from the income to find what is left.
- Percentage = left ÷ income × 100.
Watch out: Finding the percentage spent when the question asks for what is left.
AER and APR
- AER (Annual Equivalent Rate) is for savings: how much you earn in a year.
- APR (Annual Percentage Rate) is for borrowing: the yearly cost of a loan, including fees.
- Higher AER is better for saving; lower APR is better for borrowing.
Watch out: Mixing them up. Savers look at AER, borrowers look at APR.
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