Hi, I'm Mrs. Wheelhouse.

And welcome to today's lesson, which is from our unit of lessons on financial maths education.

I'm really looking forward to exploring some of the ways that we use maths in order to help out with our personal finances.

So let's get started.

By the end of today's lesson, you'll be able to identify situations in which forms of saving and borrowing are suitable.

Now we're gonna use the keyword credit today and it has multiple meanings.

We're gonna cover some of those meanings in this lesson.

Our lesson is broken into two parts.

We're gonna begin by considering credit.

"When money is added to an account, it can be said "that the account has been credited with that amount.

"Laura's sister pays £10 into Laura's account.

Laura says, "Thank you for crediting my account "with £10." Now there's another way we could use the word credit, and you can see it here.

"Laura and Jacob both want to visit the fairground.

"Laura's account is in credit and she can afford to go.

"Jacob's account is also in credit, "but he cannot afford to go." So in other words, they have money in their accounts, but Jacob doesn't have enough.

So what could Jacob do in order to be able to go to the fairground? Pause the video and have a quick discussion now.

Well, Jacob could either save any money he gets so that he could save up to go or he could borrow some money.

Hmm, I think I know which one Jacob's gonna go for.

"Laura, can I borrow some money so I can go to the fairground?" Laura says, "Well that depends.

How good is your credit?" And this is another way of using the word credit.

A credit score is an numerical score reflecting how trusted you are to pay back any money that you borrow.

So the higher your score, the more trusted you are.

People with higher scores are more likely to be able to borrow money as there's a high level of trust.

What I'd like could to do now is do a quick check on different ways the word credit can be used.

So select the correct uses of the word credit.

Pause the video while you read through each of the different options, and then make your choice.

Welcome back.

We should have opted for B and C.

When money is added to an account, it can be said that the account has been credited with that amount.

And a credit rating, or credit score, is a numerical score reflecting how trusted you are to pay back any money that you borrow.

Lucas's younger brother asks to borrow money from Lucas.

"I'll pay you back tomorrow, honest!" "Hang on.

You don't get your pocket money for another four days.

How will you pay me back?" Borrowing money and not paying it back at the agreed time can lower your credit score.

Now remember, if you have a lower credit score, it means you are less trusted, which means you might not be able to borrow money in the future.

Now it's Monday and Lucas's younger brother has £5.

Every Friday, his account is credited with £5, which is his pocket money.

A ticket to the fairground costs £10.

Assuming he cannot borrow the money, on what days this week can he go to the fairground? Now it might just be one day, could be more than one.

Pause the video and have a think about this now.

Welcome back.

What did you say? Well, he can definitely go on the Saturday or the Sunday.

He's got £5.

He gets another £5 on the Friday.

So on the Saturday and Sunday, he's definitely got £10.

Now, depending when he receives the pocket money, he might be able to go on the Friday.

But for example, if he's not paid until late in the evening, he won't be able to go to the fairground.

Let's do a quick check.

Sofia's account is credited with £7 each week.

She wants to buy an art kit costing £36.

Assuming she starts with nothing in her account and she does not borrow any money, how many weeks will it take for her to save enough money? Pause the video and work this out now.

Welcome back.

Well, you should have worked out it'll take six weeks.

After five weeks, Sofia will have £35 in her account, which is not enough.

But after six weeks she'll have £42 and therefore has enough money, so it'll take her six weeks.

Ah, look what's happened now.

Her aunt is going to lent her £20.

Given that that's going to happen, how many weeks will it now take for Sofia to save enough money to buy her art kit? Pause the video and work this out now.

Welcome back.

Well, this time it'll only take three weeks.

After one week, she'll have £27.

After two weeks, she'll have 34 and that's not quite enough, so after three weeks she will have enough 'cause she'll have £41.

Well done if you got that right, It's now time for our first task.

For question one, I'd like you to match the sentence with the correct meaning.

Pause the video and do this now.

Welcome back.

Question two.

Aisha's account is credited with £6 each week.

She wants to buy some clothes costing £55 in total.

Part A, assuming she starts with nothing in her account and she does not borrow any money, how many weeks will it take for her to save enough money? And then part B, her brother gives her £7.

Assuming again, she starts with nothing in the account, how many weeks will it take for her to save enough money? Pause the video and work this out now.

Welcome back.

Question three.

Aisha's account is credited with £6 each week.

She wants to buy some clothes costing £55 in total.

She may be able to borrow some money.

The graph shows how much she will need to borrow.

Part A.

Use the graph to check your answers to question two.

And then in part B, explain whether the graph makes it easier or harder to determine how long Aisha must save for.

Pause the video and do this now.

Welcome back.

Let's go through our answers.

So, "My account is in credit" Means there is money in my account.

"I have a good credit score" Means I can be trusted to pay back what I borrow.

And, "My account has been credited with £32" Means money has been added to my account.

Question two, part A.

It will take Aisha 10 weeks to save enough money.

After nine weeks, she only has £54.

So it must take her 10 weeks so she has £60, which is more than the £55 that she needs.

Part B, her brother gives her £7 so how many weeks will it now take? It'll take her eight weeks.

You can see that after eight weeks she has exactly £55 in her account, which is what she needs.

And then question three.

For part A, I said to use the graph to check your answers to question two.

Here we can see what Aisha's been given.

In other words, what she's borrowed.

And then how many weeks it took for her to save up to get her clothes.

So for the first line we can see it took 10 weeks.

And then if she's been given £7, we can check, yep, that leaves up to eight weeks.

So does it make it easier or harder? Well, the graph is very quick to use and the rounding was very simple, but remember, we're not seeing exact answers so we had to round up quite a bit there.

So for example, when we saw that it was more than three weeks, we had to round up to four.

It's now time for the second part of our lesson, and that's on borrowing.

When we know how much something costs and there's no time pressure, it's possible to save money in order to buy the item.

But what happens when there is a limited amount of time? It's November and Sam's coat has just torn.

Oh no.

Sam doesn't have enough money to buy a new coat right now.

It will take Sam three months to save enough money to buy the new coat that they want.

So it's not a case of buying a coat that will do, it's a case of Sam wanting to buy a particular coat.

Now, why might waiting for that coat that Sam really wants not be a good idea? Pause the video and have a quick discussion now.

Welcome back.

Did you say something like this? "The weather may have changed.

Three months is quite a long time and a coat may no longer be needed.

The shop or shops might also stop selling that coat." So what are Sam's options? Well, they could save for the coat, but it might not be available or needed in three months time.

They could borrow some money to buy the coat or they could just buy a cheaper coat that can be afforded right now, but it may not be the one that Sam really wants.

So in Sam's situation, they may have to borrow money.

This was not planned for as the coat tearing was not expected.

Now, unplanned borrowing may mean that Sam has to pay the money back in a way that is not ideal.

Let's do a quick check.

So that Sam can buy the coat they want, two different people offer to lend Sam the money.

Sam's uncle says, "I'll lend you £40, but you must pay me back within four weeks." And Sam's cousin says, "Well, I'll lend you £40, but you must pay me back within eight weeks." Write down reasons for and against each offer, and you can discuss your answers if you want before you write them down.

Pause the video and do this now.

Welcome back.

Let's start with Sam's uncle.

Well, you could have said that the money will be repaid quicker so we're not in debt for so long, but that could also be a negative.

Repaying so quickly means we can't be saving our money for other things.

Now, for Sam's cousin, you could have said, well, the longer timeframe means I don't have to pay back too much in one go.

But equally, we do have to repay fairly quickly so money can't be saved or used on other things over that period of time.

It's now time for our final task.

Question one, Sofia gets £10 a week pocket money.

A video game is coming out that costs £49, 99 pence, and she wants to buy it.

Explore the different options for affording it.

Option one, she saves her pocket money every week.

Option two, borrows £50 from her parents when the game comes out and using all her pocket money every week to pay her parents back.

Or option three, borrowing £50 pounds from her parents when the game comes out and paying back half her pocket money every week.

Part A, what are the advantages and disadvantages in each case? Pause the video and work this out now.

Part B, for each option, how long would it take to pay back the money? Pause and work this out now.

It's time to go through this.

So part A, what are the advantages and disadvantages for each option? Well, for option one, Sofia won't owe any money to anyone if she saves her pocket money every week, and that's good.

But she can't be spending her saved money on anything else.

So she's a bit limited there.

Option two, that's great because she doesn't have to worry about saving up.

However, she can't spend her money on anything else for a very long time afterwards.

And for option three, well this is good because she doesn't have to worry about saving her money now and she still has some money that she can spend after buying the game.

However, she will owe money and this will limit how much she can spend.

Part B, how long would it take to pay back money? Well, for option one won't take any time at all because Sofia didn't borrow any money.

For option two, it's going to take her five weeks to pay back what she's borrowed.

And for option three it will take 10 weeks to pay back what she borrowed.

Let's sum up what we've looked at today.

The word credit has multiple meanings.

For example, my account is in credit.

I have a good credit score and my account has been credited with money.

Sometimes it is better to save for something rather than borrowing money in order to afford it.

However, this is not always practical and we need to think about what the consequences are of borrowing that money.

Well done, you've worked really well today and I look forward to seeing you for more lessons in the future.

Goodbye for now.