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7th grade · Math · Unit 22 of 22

Taxes, Net Worth & Interest

Taxes, budgets, net worth and interest

What your child practices

Personal financial literacy: your child finds sales tax and income tax, names the parts of a budget, builds a net worth statement from assets and liabilities, uses a family budget to find the wage a family needs, compares simple and compound interest, and compares sales, rebates and coupons.

Texas Essential Knowledge and Skills (TEKS) teks student expectation: 7.13(A); 7.13(B); 7.13(C); 7.13(D); 7.13(E); 7.13(F) · sales and income tax, budgets, net worth, family budgets, simple and compound interest, and sales, rebates and coupons

How we explain it

Children can open this short lesson before they practice.

  1. Sales tax is a percent added to a price; income tax is a percent taken from wages.
  2. Net worth = assets (what you own) − liabilities (what you owe).
  3. Compound interest earns interest on past interest, so it grows faster than simple interest.

Example: Assets are $9,000 and liabilities are $3,500. What is the net worth? Net worth = assets − liabilities. 9,000 − 3,500 = 5,500. Answer: $5,500

Taxes, Net Worth & Interest in Texas

In the Texas Essential Knowledge and Skills (TEKS), this is unit 22 of 22 in 7th grade Math, after Tips, Discounts & Interest.

Gradelings describes a child's practice on this unit as Beginning, Approaching, Meeting or Exceeding (Four practice steps). That reflects practice, not a report-card mark: the teacher decides the mark.

Source: Texas Education Agency (TEA)

Sample questions

A taste of this unit. In the app, questions change every time and get easier or harder to match your child.

  1. Question 1

    Which belongs in the savings part of a budget?

    • rent
    • money set aside for college and retirement
    • groceries
    • a phone bill

  2. Question 2

    Ana earns $500. Her income tax rate is 10%. How much income tax does she pay?

    • $50
    • $450
    • $5
    • $100

  3. Question 3

    $200 earns 10% a year for 2 years. How much more does compound interest earn than simple interest?

    • $2
    • $0
    • $42
    • $20

  4. Question 4

    Taxes, housing and food in a budget are…

    • assets
    • savings
    • expenses
    • income

  5. Question 5

    Which is a liability?

    • a savings account
    • a credit card balance
    • a bike you own
    • cash

  6. Question 6

    Store A: a $80 bike at 25% off. Store B: the same bike for $65. Which is cheaper?

    • they cost the same
    • Store A
    • Store B

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