F. Financial Literacy · Financial Decisions: Interest, Borrowing, Appreciation, Depreciation and Budgets

Financial Decisions: Interest, Borrowing, Appreciation, Depreciation and Budgets: Unit Review

A1 A2 F1.1 F1.2 F1.3 F1.4About 40 minutes

Learning goals

I can explain how past and current financial situations, with their context, can inform decisions.
I can identify appreciation and depreciation and use straight-line and curved graphs to answer questions.
I can compare how interest rates, length of time, the way interest is calculated and down payments change the cost of a purchase, using appropriate tools.
I can modify budgets shown in different displays and give a rationale.

Words to know

inflation
A general rise in prices over time.

compounding period
How often interest is calculated and added: annually, semi-annually, quarterly, monthly or daily.

down payment
Money paid up front so less is borrowed.

depreciation
A decrease in value over time.

appreciation
An increase in value over time.

rationale
A clear reason that justifies a decision.

Let's review!

In this unit you learned from past and current financial situations, compared compounding periods, saw how interest rates, borrowing time, the way interest is calculated and down payments change the cost of a purchase, built spreadsheets and code to compare options, identified appreciation and depreciation and read their graphs, and modified budgets shown in different ways. Then you put it all together in one big decision.

This review has a few questions from every lesson. Try each one, then press Show answer. All prices and rates are examples.

The four specific expectations of this strand all support one big goal: making informed financial decisions.

The main formulas from this unit. Knowing when to use each one matters more than memorizing it.

Learning From Past Financial Situations: Inflation and Interest Rates

The CPI was 137.0 in 2020 and 157.1 in 2023. Estimate the 2023 cost of something that cost $40 in 2020.

Your pay rises 4% in a year when prices rise 6.8%. What happens to your purchasing power?

A variable-rate debt of $8 000 has its rate rise from 3% to 6%. How much more interest builds up per month?

Using Your Current Situation to Make Informed Financial Decisions

A $960 laptop lasts 4 years. What is its cost per month?

Weights 3 (cost) and 1 (style). An option scores 2 on cost and 5 on style. What is its weighted total?

Give one context factor and one math factor you would consider before buying a bike to ride to school in Ontario.

Compound Interest and Compounding Periods

Find i and n for 5% compounded semi-annually for 6 years.

Find the amount: $3 000 at 6% compounded quarterly for 2 years.

Find the effective annual rate of 8% compounded monthly.

How the Interest Rate and the Length of Borrowing Change the Cost

A $9 000 loan at 7.5% for 36 months has payments of $279.96. Find the total interest.

The same loan over 60 months has payments of $180.34. Find the total interest and compare.

Find the first month's interest on $9 000 at 7.5% compounded monthly.

Down Payments and the Total Cost of a Purchase

Find the minimum down payment on an $800 000 home (rules as of 2025).

A $24 000 car with a 15% down payment: find the down payment and the loan.

Why might someone not put every dollar of savings into a down payment?

Comparing Ways Interest Is Calculated: Loans, Credit Cards and "Pay Later" Offers

Find the interest on a $1 500 add-on loan at 10% for 1 year.

Find the fee on a $200 payday loan at $14 per $100.

You pay your full credit-card balance by the due date. How much interest is charged on new purchases?

Using Spreadsheets and Code to Compare Borrowing Options

A row starts at $2 000, the rate is 12% per year (1% a month) and the payment is $150. Find interest, principal and end balance.

Write the PMT formula for $9 000 at 7.5% for 36 months.

Why should the rate cell be written $B$1 in a formula you copy down?

Appreciation and Depreciation in Real Life

A phone drops from $900 to $360. Find the percent depreciation.

A card rises from $25 to $40. Find the percent appreciation.

You owe $15 000 on a car worth $13 000. What is this called, and how big is it?

Straight-Line Depreciation and Appreciation: Linear Graphs

V = 2400 − 300t. Find the value after 5 years.

When is V = 2400 − 300t worth $0?

An item is worth $1 000 new and $640 after 3 years (straight-line). Write its equation.

Percent Appreciation and Depreciation: Curved Graphs

V = 20 000(0.8)ᵗ. Find V after 3 years.

Is this table linear or percent: 500, 550, 605, 665.50?

A $400 000 home appreciates 3% a year. Estimate its value after 10 years.

Budgets Displayed in Different Ways

Find the circle-graph angle for 30%.

Write $650 a month as a weekly amount.

Budget $300, actual $345. Find the variance.

Modifying Budgets When Circumstances Change

Take-home pay of $2 400 falls 10%. What is the new pay, and how much must the budget shrink?

Rent of $1 200 rises 2.5%. Find the new rent.

Write a short rationale for cutting entertainment rather than food after a price increase.

Putting It All Together: Should Sam Buy a Car?

A car costs $248.38 a month in loan payments plus $535 in other costs. What is the monthly cost of owning it?

Why should resale value be subtracted when finding the net cost of a car over 4 years?

Name the four kinds of math Sam used to decide.

Just for fun

This unit had a lot of interest. Luckily it was the good kind, the kind you earn by reviewing.

How to use this review

Try every question before opening the answer.
Mark any question you missed, then go back to that lesson's worked examples and practice.
For calculation errors, re-do the question slowly with a calculator, writing each step.
When you can do the review without help, try the Challenge questions in each lesson.
Take the quiz below last. Aim for at least 8 out of 10.

Check your understanding

Quiz

The CPI rose from 141.6 to 151.2 in one year. About what was the inflation rate?

What is the opportunity cost of buying a $1 100 phone instead of a $450 one?

$1 000 at 6% for 5 years. Which gives the most?

Same loan amount and rate, longer term. What happens?

Minimum down payment on a $450 000 home (rules as of 2025)?

A payday loan charges $14 per $100 for 14 days. About what is that per year?

V = 1500 − 300t describes…

V = 32 000(0.85)ᵗ describes a car that…

A $1 050 expense on a $3 000 income: what is its circle-graph angle?

10.

Income drops by $300 a month. Which modification is balanced and reasonable?

For parents and teachers

How to use the review results:

Mistakes with CPI, inflation or comparing raises with price increases → revisit Learning From Past Financial Situations.
Trouble explaining a choice, or ignoring context → Using Your Current Situation to Make Informed Financial Decisions.
Wrong i or n, or wrong compound amounts → Compound Interest and Compounding Periods.
Judging loans by the monthly payment, or errors with the payment formula → How the Interest Rate and the Length of Borrowing Change the Cost.
Leaving the down payment out of the total cost, or errors with Canada's minimum down payment → Down Payments and the Total Cost of a Purchase.
Trusting a stated rate, or fee-per-$100 errors → Comparing Ways Interest Is Calculated.
Spreadsheet formula or code questions → Using Spreadsheets and Code to Compare Borrowing Options.
Percent change with the wrong denominator, or negative equity → Appreciation and Depreciation in Real Life.
Equations and graphs with a constant dollar change → Straight-Line Depreciation and Appreciation.
Using 0.15 instead of 0.85, or mixing up linear and percent tables → Percent Appreciation and Depreciation.
Angles, percents, weekly vs. monthly amounts, variances → Budgets Displayed in Different Ways.
Unbalanced modifications or weak rationales → Modifying Budgets When Circumstances Change.

All rates, prices and rules in this unit are examples or were current in 2025 or 2026; real ones change, so encourage your teen to check current figures when making real decisions.