Sunday 4 November 2012

John’s Blog No.100 – Pensions – Simple Arithmetic

A diversion this week; we are all scared of mathematics and as a result avoid using it wherever possible, even though it is an essential part of everyday living. This arises from the pedantic and rigorous way they are taught which is part of the mind training aspects of the subject.
There is however a lighter and simpler side to the subject of arithmetic in the world of estimates, approximations, rounding up and down, percentages and fractions and a certain quirkiness of the figures which make them easy to use and remember.
For example the ten percent rule for unit conversion; a metre is one yard or 36” + 10%; a kilogram is 2lbs +10%; 4 pints are 2 litres + 10%, all of which makes conversion simpler and mentally possible. So if something is priced in lbs, double it add 10% to get the kilogram price; 500ml less 10% is a pint; all one needs to remember is the 10% rule and whether you need to double or halve it.
Many items are sold by length, add 10% to the yard price to get the cost per metre, or take off 10% for cost per yard; the number 454 also crops up; 1lb is 454 grams; 1 gallon is 4.54 litres; a square metre is 10 sq feet, a cubic metre is 33 cu ft; 1” is roughly 2.5cm, so a foot is 30cm etc.
A 25kgm bag of potatoes weighs 55lbs, roughly a cwt; 1ml (cubic centimetre) weighs 1 gm, a litre of water weighs 1kgm or 1cubic metre weighs 1 tonne and many things have a similar density and can be assessed in the same way, e.g. potting compost and even sand and gravel, useful when lifting things.
Rough estimating is another example, particularly in mortgage and HP payments; a loan for so many years at an given interest is on average half the interest over the full term, so a loan of £80,000 for 20 years at 6% would have interest of £80,000 x 20 x 3/100 = £48,000 giving a total of £128,000 divided by 20 = £6,400 per year or £533 pm.
Rounding up and down is another good estimating tool and it is surprising how all the odd amount balance out; one only worries about the whole numbers (or 1,000’s/ millions) and can quickly total up a column of numbers, even mentally or check a bill. Don’t worry to be precise.
Stores tend to knock off the odd penny to make it look cheaper, round it up and you can keep a rough check of the total; £2.99 + £4.99 + £7.49 is 3+5+8 - 53p giving £14.47. In these hard pressed days it is useful to check your shopping bill as you go round, to decide whether you can afford the odd item.
Percentages and fractions are another area not to be afraid of; everyone gives discounts these days in sales, special offers or total amount spent; 50% off is half the price, a further discount comes off this reduced price i.e. 10% is only 5% off the original price. For percentages divide by 100 or convert to a rough fraction if you prefer.
Of course in this computer age we all tend to become lazy and rely on someone else; however I always check. Mistakes occur, in stores the computer price often changes before shelf end price or offers finish or even ignore them altogether. Insurance renewals often go up by large amounts, after they have persuaded you in; to avoid moving every year check and query and it is often reduced.
Increasingly it is buyers beware and it is useful to be able to estimate on the spot to check whether it is a good or fair deal, prices are often increased to be discounted; pack quantities are reduced for special offers and it pays to be able to check even roughly. I have often seen reduced items dearer than standard shelf ones!
Arithmetic can be simplified and figures are not something to be afraid of, they can be a challenge or a even a game and improve and lighten a shopping expedition, you just need to grasp the nettle.                                                  

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