BOAT BUYING ANSWERS

The dinghy is for sale in a boat shop for $2700 but by paying cash Greg can save 20%.

20% of $2700

20 ÷ 100 x 2700 = 540

2700 – 540 = 2160

The cash price is $2160

Greg will also need oars and safety gear which will cost 0.05 times the price of the dinghy (the before sale price of $2700).

0.05 x 2700 = 135

The oars and safety gear cost $135

Because some of his friends use Greg’s boat they agree to split the price in a ratio of 2:7 with Greg paying the larger share.

Greg’s share is 7/9 of the price.

7 ÷ 9 x 2160 = 1680

Greg’s share of the price is $1680

Greg works part time for 15 hours a week. He is paid $19.50 per hour before tax.

15 x 19.50 = 292.5

Greg earns $292.5 per week

Greg pays 22% tax to the Government.

22% of 292.5

22 ÷ 100 x 292.5 = 64.35

292.5 – 64.35 = 228.15

After paying tax, Greg gets to keep $228.15 per week.

Greg has to use his weekly money for other expenses as well and can only afford to save ¼ of his income after tax.

1 ÷ 4 x 228.15 = 57.0375

Greg saves $57.04 per week.

Because Greg also works as a professional fisherman he might be able to get the GST (15%) that is already part of the price for the boat (plus oars and safety gear) taken off and only pay the price before GST was added.

Excellence Question

Because he has been working very hard Greg’s boss is thinking about giving him a 7% raise. If he gets this, Greg can save all of the extra money after tax each week as well as the amount he would normally save.

Excellence question

Total Cost of Dinghy

$1 680 Greg’s share of dinghy cost

$135 Oars and safety gear

1680 + 135 = 1815

$1 815 Total cost

Time to save

$1 815 Total cost

$57.04 Savings per week

1815 ÷ 57. 04 = 31.82

It will take 32 weeks for Greg to save up enough to buy the dinghy.