Numeracy, Financial Literacy, and Financial Decision-Making

gadgetmind

Interesting yet depressing.

Hit the download link on the right.

http://services.bepress.com/numeracy/vol5/iss1/art2/

How can schools allow someone to leave without being able to do basic compound interest calculations? Even if you can't cope with powers, you can just use repeated multiplication!

seriousDFW

Being able to calculate compound interest is grade C at GCSE. There is a significant number of students who are unable to achieve this level, for a variety of reasons, including learning difficulties, poor parenting, poor teaching, bad behaviour etc.

It may seem easy to you but don't assume it's easy to teach this to everyone - it isn't!

opinions4u

seriousDFW wrote: »

Being able to calculate compound interest is grade C at GCSE. There is a significant number of students who are unable to achieve this level, for a variety of reasons, including learning difficulties, poor parenting, poor teaching, bad behaviour etc.

It may seem easy to you but don't assume it's easy to teach this to everyone - it isn't!

I don't think the assumption is that it's easy for everybody.

But it is teachable.

seriousDFW

opinions4u wrote: »

I don't think the assumption is that it's easy for everybody.

But it is teachable.

Ok, let me rephrase. ANYTHING is 'teachable' but not everything is 'learnable' by everyone.

The OP said "How can schools allow someone to leave without being able to do basic compound interest calculations?". Schools do try to teach children as much as possible, but compound interest is low on the priorities when they can't multiply, manipulate fractions, find percentages of amount, plus a hundred other topics/skills which are below the level of compound interest.

jamesd

We're probably both of well above average capability in that area and that can distort our perception of what normal is, in part due to the ability of those we associate with.

To know that you need to use repeated multiplication you need to first know the difference between compound and simple interest so that you know that multiplication is required.

This is in part why people routinely come here asking questions where we have learned or can easily calculate the answer and in part why the guides that Martin and his team produce can be helpful in directing people down more correct paths than they might otherwise use.

It's also part of why I quite often mention specific funds rather than sticking to sectors. The extra level of indirection and the confusion of the large number of choices can induce paralysis, while getting people started with something can overcome it.

This is one of the challenges for teachers, me in my own work, IFAs and those who answer questions here. The cognitive ability and experience of the questioner needs to be judged to help to know how to pitch the answer and the best answer will vary with the questioner.

JamesU

seriousDFW wrote: »

It may seem easy to you but don't assume it's easy to teach this to everyone - it isn't

Pay ALL your debt off by Xmas 2012 #050
£10,722 £8,577 20.39%
How do you get to the answer 20.39%?

JamesU

BLB53

I think a lot of the problem rests with the fact that its somehow OK to admit to having problems with numeracy, sort of a joke that you can have a laugh about - on the other hand being unable to read or write carries a lot more social stigma and is something to hide.

The other problem is that there are not as many good maths teachers in schools who can inspire their pupils to learn with confidence. I suspect a lot of teachers probably struggle themselves with numeracy.

As for personal finance education....

cepheus

gadgetmind wrote: »

Interesting yet depressing.

Hit the download link on the right.

http://services.bepress.com/numeracy/vol5/iss1/art2/

How can schools allow someone to leave without being able to do basic compound interest calculations? Even if you can't cope with powers, you can just use repeated multiplication!

Compound interest? Half of adults are not even nearly at that level. See this thread and prepare to be really shocked!

A new charity, National Numeracy, found that 49 per cent of working-age adults in England are so bad at maths that they have no more than the skills expected of a nine to 11-year-old and would struggle with graphs and charts.

About half of these adults – a quarter of the working population – have only the abilities expected of a seven to nine-year-old and might struggle to pay household bills

Read more: http://www.thisismoney.co.uk/news/article-2108989/Nation-maths-dunces-17-million-adults-fail-tests-set-primary-schoolchildren.html#ixzz1nwyQAeDv

https://forums.moneysavingexpert.com/discussion/3826709

seriousDFW

JamesU wrote: »

Pay ALL your debt off by Xmas 2012 #050
£10,722 £8,577 20.39%
How do you get to the answer 20.39%?

JamesU

No idea. Just checked and should be 20.01%.

Obviously a silly arithmetic error, but thanks for pointing it out - I will add it to the list of reasons I shouldn't be a teacher anymore! To be honest, I won't need many more before I call it quits anyway.

Maths teachers are no weaker in general than any other type of teacher. Maths as a subject however has bigger obstacles to overcome, not least the aforementioned lack of social stigma attached to being poor with numeracy.

JamesU

seriousDFW wrote: »

I will add it to the list of reasons I shouldn't be a teacher anymore! To be honest, I won't need many more before I call it quits anyway.
Maths teachers are no weaker in general than any other type of teacher. Maths as a subject however has bigger obstacles to overcome, not least the aforementioned lack of social stigma attached to being poor with numeracy.

Sorry, could not resist the irony with the calculation given the topic under discussion. Seriously though, things look pretty grim given the simplicity of the questions in Cepheus's link, something very wrong with the current education system by the looks of it.

JamesU

pqrdef

On the Beeb, Julia Somerville interviewed the numeracy spokesperson and started by admitting that she didn't get maths O-level. Obviously this didn't do her career much harm.

If she's worried about her compound interest, I expect she just asks somebody else. It's not like it comes up every day.