Level 3 BTEC Foundation Diploma Business/Law/Finance Past Paper PDF

Level 3 BTEC Foundation Diploma Business/Law/Finance Unit 3: Personal and Business Finance L E SS O N 1 – T H E F U N C T I O N A N D R O L E O F M O N E Y Break Time – 30 minutes STARTS AT RETURN AT  Ground Rules Do not use your mobile phones unless you have been asked by a teacher...

Level 3 BTEC Foundation Diploma Business/Law/Finance Unit 3: Personal and Business Finance L E SS O N 1 – T H E F U N C T I O N A N D R O L E O F M O N E Y Break Time – 30 minutes STARTS AT RETURN AT  Ground Rules Do not use your mobile phones unless you have been asked by a teacher Wear your lanyards at all times  Learning outcomes – before our break Identify the functions and role of money Analyse how individuals can use money to their advantage Analyse the impact of using money inappropriately Evaluate different money management strategies. Unit Introduction Externally Assessed Written Examination consisting of two parts. PART A: Personal Finance (1/3 of the total marks) PART B: Business Finance (2/3 of the total marks). 100 marks available in the test. Assessment date: January Functions of Money Unit of Account List of Currencies Means of Exchange Facts about Money Store of Value Legal Tender Unit of Account Unit of Account is where a monetary value is placed on an item/service. The price of the good/service can be seen to determine the quality and purpose of the item. The price charged is known as the ‘Unit of Account’ £200,000 50p Means of Exchange Money allows us to trade, as we receive goods and services in exchange for money. What would happen if money was not accepted by a business?  Store of Value Money does not lose its value over time, so it maintains its value. If you save a sum of money in a bank account for several years, the value of the balance does not decrease. The average house price in 1977 was £9,737. The average house price now is £305,000. If money does not lose its value, why have house prices risen do dramatically in around 30 years?  Legal Tender Money is a legally recognised form of payment. A countries‘ currency is accepted for all forms of payment, no matter what is being purchased. How do I know if a banknote is legal tend er? Role of Money Everyone in the country, regardless of their background or occupation, will use money. The role money plays in people’s lives can be dramatically different depending on circumstances. Personal Attitudes People have vastly different attitudes to money. If I gave you £1000, to be used in any way you like, how would you spend it? People from an affluent background will have a different view of money to people from a deprived background, why is this? Life Events Life events can be planned or unplanned. Life events often require a significant amount of money, including; Marriage Accidents Having a Family External Influences An external influence is something you cannot control. An example of this is the economy; Changing interest rates Inflation Government action e.g. Brexit Taxation What are the potential implications of these on individuals and Life Stages What is the role of money in the following people’s lives? Task Create a table and research stages and complete the missing sections on the financial needs and implications Life stage for each. Financial needs Implications Childhood Limited needs Mainly reliant on parents May want to buy sweets Adolescence Young adult Middle age Old age Life stage Financial needs Implications Childhood Limited needs Money received from presents Mainly reliant on parents may be spent May want to buy sweets May be encouraged to save Adolescence Want to be more independent Still partially reliant on pocket Slightly less reliant on parents as money want to socialise away from family May be willing to save in order to make bigger purchases Young adult University or starting a career May take a student loan Looking to be more independent Borrow money to pay for car Buying a car or renting a flat Need money to support self and others Eligible for credit/debit cards Middle age Support family Saving account for specific Start saving for children’s future purpose Look to improve own lifestyle Paying a mortgage Spend on luxuries Planning future via pensions and retirement plans Old age Fewer dependents Mortgage payments stop or May downsize become lower income as reliant on Fewer financial needs pension. Here is an exam question about life stages and money. Write an answer to this question. We will then combine our answers and create a class model answer. Here is an exam question about unmanageable debt. Think about your own answer, then share with one other person to create your answer. When you have joint answer share this with another pair We will then look at every group’s answers and come up with a model answer.  Learning outcomes – before our break Identify the functions and role of money Analyse how individuals can use money to their advantage Analyse the impact of using money inappropriately Evaluate different money management strategies. Break Time Be back and ready to start by 12/18/2024 24  Learning Outcomes– 2nd half List a range of payment methods used personally or by businesses. Analyse the advantages and disadvantages associated with a range of payment methods. Evaluate the most suitable payment method(s) for a selected product or service.  Working individually, you are required to list as many methods of payment which you can think of. DIFFEREN T WAYS Time allocation: 5 minutes TO PAY You will then need to share your ideas with the rest of the class. Time allocation: 10 minutes  There are many different ways to pay for goods and services Each method has advantages and disadvantages, but a lot is down to personal preference A2 Whatis your preferred method of DIFFEREN payment? T WAYS How many different methods do you TO PAY use on a regular basis? How might the answers to the previous 2 questions differ for an elder generation? How have methods changed over time?  You will now need to analyse the advantages and disadvantages associated with each payment method ACTIVITY identified in the previous task. 2 Use the table available in Teams  WAYS TO PAY Method Advantages Disadvantages Cash Confidence, widely accepted, small Risk of loss or theft, physical denominations, easy to control transactions only, inappropriate expenditure for large items of expenditure Debit card Secure, widely accepted, can Need to monitor spending and withdraw cash from various places bank balance, if overspend can be costly Credit card Allows you to defer and spread Interest is charged on the payment, widely accepted, used outstanding balance, can online or in store encourage over spending WAYS TO PAY Method Advantages Disadvantages Cheque Secure method of payment, Maybe charged for each widely accepted, appropriate cheque processed, costly if for postal transactions cheque is not honoured due to insufficient funds Electronic Quick method of payment, Need to be carefully set up to transfer transfer is almost instant, can ensure the transfer goes to the be done remotely e.g. by right place mobile app Direct Ensures regular payments are Amount taken will vary making debit not missed budgeting difficult, need to be re set up if bank details change, taken automatically WAYS TO PAY Method Advantages Disadvantages Standing Secure method of Money taken regardless of order payment, ensures regular balance, must be reset or payments are not missed cancelled if anything changes Pre-paid Can only spend up to the Can be difficult to monitor cards amount uploaded, secure balance, can be used by method of payment, can others without permission, only be used for specific may involve a fee to purpose purchase the card in the first instance WAYS TO PAY Method Advantages Disadvantages Charge Secure method of payment, May incur annual or card avoids long term debt monthly fees, has to be paid in full regardless of funds Store May reward frequent May encourage debt, card shoppers, additional benefits interest will be charged on such as events or discounts, balances not paid off at the can choose how much to pay end of a month, can open each month above a for multiple stores! minimum amount, spread cost of spending Mobile Convenient, increasingly Still developing, relies bankin popular upon the customer having g a mobile device Method Advantage Disadvantage Contactless card Gaining in popularity. Often only accepted for Secure method of making relatively small transactions. payments. Still not widely accepted as seen as new technology BACS Faster payment allows almost Faster payment is not offered instant transfers that are by all banks or branches and guaranteed within 2 hours. the customer may therefore Can be can be accessed in have to default to ordinary several ways including in a payments which may take 3 branch, over the telephone and days to transfer. online. A limit is set on the amount No additional costs that can be transferred in any single transaction. CHAPS Transfers can be made the Normally there is a fixed same day assuming charge per transaction instructions are received prior regardless of the amount to a set time. transferred. There is no limit on the amount that can be transferred in a single transaction  Banker’s Automated Clearing Services (BACS) Directtransfer of money from one bank account to another, may take a few days DIFFEREN Faster Payments Services (FPS) T WAYS TO PAY Direct transfer of money from one bank account to another, guaranteed BETWEEN within 2 hours but may be quicker BANKS ClearingHouse Automated Payment Systems (CHAPS) Same day transfer of funds from one bank account to another of any amount  What payment method(s) would be most suitable for the following purchases that someone may need to make: House mortgage payments ACTIVITY Car Washing machine Computer £1,200,000 specialist piece of equipment Insurance  Over to you……… Name the four functions of money What is the definition of money? How would you rate your attitude to money? What factors influence your attitude to risk? What is the difference between BACs, FPS and CHAPs? You are to produce an information sheet on one side of A4 about contactless payments. You will need a brief explanation followed by a list of advantages and disadvantages. Look at the articles below – click on them to open the link  Lesson Objectives Identify the functions and role of money Analyse how individuals can use money to their advantage Analyse the impact of using money inappropriately Evaluate different money management strategies. List a range of payment methods used personally or by businesses. Analyse the advantages and disadvantages associated with a range of payment methods. Evaluate the most suitable payment method(s) for a selected product or service.