What does inflation really mean? Enter the amount your group was given at the beginning of class ($100) in the space above the chart below. Then use the Inflation Calculator at bls.gov/data/inflation_calculator.htm to calculate the difference in buying power that amount of money represented over several decades in comparison with 1990, 2000 and 2012. Enter the amount of money you were assigned at the beginning of the class in the calculator, then input the years according to the chart and see how the values change over time. Note: You can look up even more current inflation tables using the same tool.
Amount of money I have: $100
Year Starting Value Buying Power in 1990 Buying Power in 2000 Buying Power Today
1920 $100 $653.50 $861.00 $1,173.61
1930 $100 $782.63 $1,031.14 $1,405.52
1940 $100 $933.57 $1,230.00 $1,676.59
1950 $100 $542.32 $714.52 $973.95
1960 $100 $441.95 $581.76 $792.98
1970 $100 $336.86 $443.81 $604.95
1980 $100 $158.62 $208.98 $284.86
What happened to the numbers on your chart? Why did they change the way they did? What does this say about the value of a dollar and inflation?
The numbers on my chart increased in buying power, but decreased as the years passed. They changed the way that they did because of financial situations back then when our currency system was still undeveloped. The value of a dollar now means way less than it did back in the 1900s due to inflation.
We all have to pay taxes to help fund government programs. But how will they affect your financial future? Read the scenario below and do the math to find out.
Scenario: Courtney is a senior in college and just started her first job as a sales associate. At her new job, she expects to make about $24,000 per year. She is excited to receive her first paycheck, which is given every two weeks. Courtney learns that 15% of her gross pay will be withheld for federal income tax, 4% for state income tax and 6% for Social Security and Medicare taxes. Help Courtney figure out what her take home, or net pay is, and how much she will pay in taxes each paycheck.
A. How much money will Courtney pay in taxes each paycheck?
Federal: $138.45
State: $36.92
Social Security and Medicare: $55.38
B. What is Courtney’s net pay? In other words, how much money does Courtney take home from each paycheck after paying all taxes?
Courtney’s net pay is $230.75.
C. Based on your knowledge of taxes, to which programs, services and accounts do you think the money withheld from Courtney’s paycheck will go?
I believe the money withheld from Courtney’s paycheck will go to schools, prisons, or any government funding.
Amount of money I have: $100
Year Starting Value Buying Power in 1990 Buying Power in 2000 Buying Power Today
1920 $100 $653.50 $861.00 $1,173.61
1930 $100 $782.63 $1,031.14 $1,405.52
1940 $100 $933.57 $1,230.00 $1,676.59
1950 $100 $542.32 $714.52 $973.95
1960 $100 $441.95 $581.76 $792.98
1970 $100 $336.86 $443.81 $604.95
1980 $100 $158.62 $208.98 $284.86
What happened to the numbers on your chart? Why did they change the way they did? What does this say about the value of a dollar and inflation?
The numbers on my chart increased in buying power, but decreased as the years passed. They changed the way that they did because of financial situations back then when our currency system was still undeveloped. The value of a dollar now means way less than it did back in the 1900s due to inflation.
We all have to pay taxes to help fund government programs. But how will they affect your financial future? Read the scenario below and do the math to find out.
Scenario: Courtney is a senior in college and just started her first job as a sales associate. At her new job, she expects to make about $24,000 per year. She is excited to receive her first paycheck, which is given every two weeks. Courtney learns that 15% of her gross pay will be withheld for federal income tax, 4% for state income tax and 6% for Social Security and Medicare taxes. Help Courtney figure out what her take home, or net pay is, and how much she will pay in taxes each paycheck.
A. How much money will Courtney pay in taxes each paycheck?
Federal: $138.45
State: $36.92
Social Security and Medicare: $55.38
B. What is Courtney’s net pay? In other words, how much money does Courtney take home from each paycheck after paying all taxes?
Courtney’s net pay is $230.75.
C. Based on your knowledge of taxes, to which programs, services and accounts do you think the money withheld from Courtney’s paycheck will go?
I believe the money withheld from Courtney’s paycheck will go to schools, prisons, or any government funding.