Everyday we are bombarded with information. Some of it is visual, some verbal, and some mathematical in nature. But due to a real lack of understanding about math, some people born after Gen X, likely don’t quite understand things like statistics, and hence tend to ignore them. Don’t believe me? Then take a look at some stats. The Conference Board of Canada says that 55% of Canadian adults have inadequate numeracy skills, and that overall Canada earns a grade of “C”. Countries that achieve an “A” include Japan and Finland, a “B”, Germany, Sweden, etc. I mean we get the same grade for problem solving skills and literacy. Not a really great outlook.

It’s likely because of this that people don’t understand the math they see on tv or the internet. It’s actually probably one of the reasons inflation has been such a shock to people. I mean the current inflation rate is 6.9%, which historically is not as high as they seen between 1977 and 1983 when it was 12.9%. But I digress, let’s look at some simple math.

Let’s talk about coffee. Let’s say you like to drink a Cortado, and it costs $4.00. If a student buys just one coffee a day it would cost them $5 after tax and tip. If they only have one coffee each weekday, that’s $20 a week, or $1,040 a year. Not chump change. If they average one coffee a day, that’s $1,825. Add a baked treat in and it might add another $4, so $9 per day. By itself it seems like a small amount, but added up, it’s a lot of money. A basic lack of understanding about quantities means that it is hard to extrapolate out, $5 doesn’t seem like much until it is viewed as a yearly cost. It is no different with other items. Take milk for example – if you buy two 2-litre cartons of milk a week, at $5 each, that means you spend $520 a year *just* on milk. It is hard to budget if you don’t really understand math.

If you can’t understand basic milk-math, then things like mortgages become even more challenging. Let’s look at the world of increasing mortgages. If someone took out a 25-year mortgage for $500,000 in 2020, with a fixed 3-year term, they would have paid 3.94%. Doing the calculations on this isn’t even that challenging, because there are an abundance of calculators – but you have to be able to decipher the calculations. A 3-year term means that the 3.94% holds for the term period, after which it might go up or down. If payments are made monthly, there are 36 payments during this period.

Mortgage payment per month: $2,613.86
Principal payment: $37,577.11
Interest payment: $56,521.97

So after the three years, the principal will have reduced to $462,422.89. If the interest rate were to stay the same, over the course of the 25 years the principal would have been paid back, and $284,158.99 would have been paid in interest. So the entire loan would have cost $784,158.99. None of this is challenging math, but if you don’t understand yearly coffee costs, this will be challenging. However as prime interest rates go up, so do bank rates. That same 3-year rate is now 6.04%, which means people are going to pay more every month. But for some reason it’s a shock to people. Monthly costs for the next 3-year term are now somewhere in the vicinity of $3,149.24 (on the remaining principal). To add to that, if the interest rate goes up, more of the monthly payment goes towards the interest, and less to the principal. It’s basic math, but so many people seem to struggle with it.

The classic example is on those TV shows where fledgling entrepreneurs go to get an investment. A lack of understanding about numbers, and a certain amount of ego makes some people believe their company is worth way more than it actually is. Classic examples are people who ask for $300,000 for 5% of their business, valuing the company at a cool $6 million. Then they get asked what their sales were in the past year and they say $50,000. So they are asking for an investment in a company that has sold little yet is deemed to be worth a lot. Now if we calculate the price/sales multiple, we get $6M/$50k, or 120 times last years sales. Very few companies are going to sell $50k of products one year and $3M the next. Of course some people want investments based on future potential, which in most cases isn’t at all realistic. But the point here is that people always think they can ask for a lot of money, and that’s partly because they really just don’t understand the math.

Many Canadian students have mediocre math skills, so it’s no wonder they don’t understand the most basic calculations. Why are these students passing through the elementary system with such poor skills? Part of the reason is the use of discovery or experiential learning, whereby students are encourage to explore various ways to solve a problem. The reality, is that these approaches just don’t work for the particular problems they are experiencing, because their working memories get overwhelmed, and as a result they don’t have the basic tools to solve more complex problems in an easy way. I’m talking in part about times tables. They should be rote-learned, because they provide the basic knowledge to easily solve more complex problems.

Sure rote-learning is tedious, but what happens now is 4×6 becomes 4+4+4+4+4+4, which is inherently inefficient. Worse is when students use their fingers to work out a basic math problem. Traditional math teaching worked – ask the generations of people who could do math in their heads. Imprinting the 12 times tables in long-term memory is important – using other techniques likely means the problem has to solved from scratch every time. The other problem of course is that some teachers teaching math cannot actually do math themselves.