PPL - Predict and Plan Overview

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Predict and Plan

Introduction

Entrepreneurship is on the rise! People everywhere are opening their own businesses or start-ups. There are many perks in being your own boss, but it comes with a lot of responsibility as well. In this module, you’ll discover how to model and interpret supply and demand to figure out the best price to set for your product or service. You’ll also take a look at expenses and revenue so that you are able to interpret the sales of a business to determine how to reach the maximum profit. All of these concepts are important as a business owner or just as a consumer!

Click on the book icon in the upper right corner to view the key terms for this module.

Lesson Preview

In this module, we will study the following topics:

Supply and Demand: Learn how to interpret the supply and demand of a business.

Correlation: Take a look at how data can provide a trend which you can use to predict future sales! 

Expenses, Revenue, & Profit: Discover how businesses make sure they are reaching their maximum profit. 

Budgeting: Explore ways to budget your money to avoid debt and save for the future.

Key Terms

The following key terms will help you understand the content in this module.

  • Annual Expenses - Expenses that occur once a year.
  • Average Monthly Expenditure - The sum of monthly expenditures divided by the number of months.
  • Budget - A financial plan and a list of all planned expenses and revenues; it is a plan for saving, borrowing and spending.
  • Correlation - An association between two variables.
  • Correlation Coefficient - Represented by r, it is a number between -1 and 1, inclusive, that is used to judge how closely a line fits the data.
  • Demand - The quantity that consumers (as a whole) want.
  • Equilibrium - Where the functions of supply (what is available to be sold) and demand (the quantity that consumers want to buy) intersect.
  • Expenditure - Any item you spend money on.
  • Expense - An outflow of money to another person or group to pay for an item or service.
  • Expense Summary - Allows you to compare amounts that you spend to the amounts that you budgeted.
  • Line of best fit - A line that approximates the points on a scatterplot which can be used to show a trend and make predications; also called a linear regression or least squares line.
  • Linear Regression Line - A line that approximates the points on a scatter plot which can be used to show a trend and make predications; also called a line of best fit or least squares line.
  • Maximum Profit - The greatest difference between revenue and expense.
  • Negative Correlation - When the value of one variable decreases as the other variable increases.
  • Nonlinear Function - A function that has a graph that is not a straight line.
  • Parabola - The shape of the graph of a quadratic function.
  • Positive Correlation - A relationship where the value of one variable increases as the other variable increases.
  • Profit - The positive difference obtained when expenses are subtracted from revenue.
  • Revenue - The income a business receives from selling a product.
  • Scatterplot - A graph that shows the relationship of bivariate data using points on the coordinate grid.
  • Supply - The quantity of an item available to be sold.

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