How to teach financial mathematics
Year 8 (ages 13 to 14)
This unit applies percentage skills to real financial contexts: simple interest on an investment or loan, discounted sale prices, and tax (GST) added to a price, each following its own two-step calculate-then-adjust pattern.
How to teach it
- Introduce simple interest with the formula I = PRT/100, working through what each letter represents with a real example.
- Teach discount as: find the discount amount first, then subtract from the original price to get the sale price.
- Teach tax the same way but adding instead of subtracting, so students see the shared underlying pattern.
- Use realistic numbers (bank interest rates, common retail discounts, Australia's 10% GST) so the context feels real.
- Review the model: does the answer make sense given the original amount and the percentage involved?
Worked example
Find the simple interest on $2,000 invested at 5% per year for 3 years I = P x R x T / 100 = 2000 x 5 x 3 / 100 = $300
Common mistakes
- Forgetting to divide by 100 when using the simple interest formula or a percentage calculation.
- Using the wrong time period (e.g. months instead of years) without converting first.
- Subtracting a discount when a tax should be added, or vice versa.
- Calculating a percentage of the wrong amount (e.g. finding tax on the discounted price without being asked to).
Frequently asked questions
How do you calculate simple interest?
Simple interest = Principal x Rate x Time / 100, where the rate is a percentage per year and time is in years. $2,000 invested at 5% for 3 years earns 2000 x 5 x 3 / 100 = $300.
How do you find a discounted sale price?
Calculate the discount amount (price x discount percentage / 100), then subtract it from the original price.
How do you find the total price including tax?
Calculate the tax amount (price x tax rate / 100), then add it to the original price.
What year is financial mathematics taught?
In the Australian Curriculum this is a Year 8 skill (AC9M8N05): using mathematical modelling for practical problems with rational numbers and percentages in financial contexts.
Practise with free worksheets
Printable worksheets with answer keys that are never wrong.