Cogito
Consumer Math · Chapter 7 · Lesson 3
Identity Theft and Scams
Recognising an offer designed to fool you.
12 problems · about 20 minutes · TEKS M.M.7.C
What this lesson teaches
The student identifies common financial scams and the arithmetic that exposes them.
- Scams manufacture urgency and demand irreversible payment methods.
- No legitimate investment guarantees a high return.
- Annualise every quoted rate; a small fee can be a 390% loan.
Warm Up
Straightforward practice. Get the method working first.
5 problems15% per two weeks over 26 periods. Annualised rate in percent?
Answer 390
Why 390%.
What should you do when an incoming caller asks for account details?
Answer Hang up and call the institution on its published number.
Why Call back on a number you looked up yourself.
A $20 fee to borrow $100. Period rate in percent?
Answer 20
Why 20 ÷ 100.
20% per two weeks, 26 periods. Annualised rate in percent?
Answer 520
Why 20 × 26.
10% per month, 12 periods. Annualised rate in percent?
Answer 120
Why 10 × 12.
Build It Up
The same ideas with more to keep track of.
3 problemsDoes a legitimate investment guarantee a high return? 1 yes, 0 no.
Answer 0
Why Risk and return move together.
A caller demands payment in gift cards. Scam? 1 yes, 0 no.
Answer 1
Why That payment cannot be reversed.
How many two-week periods are in a year?
Answer 26
Why 52 ÷ 2.
Stretch Yourself
Mixed problems. Work out what kind of question it is before you start.
4 problemsWhich are warning signs of a scam?
Answer Urgency and pressure to decide immediately; Payment demanded in gift cards; A guaranteed high return
Why One of these is what a legitimate offer looks like.
5% per week, 52 periods. Annualised rate in percent?
Answer 260
Why 5 × 52.
The Fee: A $15 fee to borrow $100. What percentage is that for the period?
Answer 15 %
Why 15%.
The Annual Rate: 15% per two weeks. Annualised rate in percent, using 26 periods?
Answer 390 %
Why 390%.