Business news for kids of all ages primary, middle, and high school.

Business fun facts!

Six out of 10 teens consider learning about managing money their top priority.

The median American household income is less than $50K a year. However, most of the teens think that they will be earning three times more than the current American household median income when they get a job!

An average outstanding balance on college going kid credit card is over $2000!

Drop in oil prices brings relief among investors . Oil prices dropped over $17 per barrel or by 11% from a high of over $146 per barrel last week to $129 per barrel this week. Why? Most experts believe that surprise increase in US oil inventories due to slowing economy helped the oil prices to drop this week. Banking sector fared well this week after repeated assurances by the US government officials that Fannie Mae (Ticker FNM) and Freddie Mac (Ticker FRE) are not going to fail and both have more than enough funds for the home loan (mortgage) business. JPMorgan (Ticker JPM), Merrill Lynch (Ticker MER), and Citigroup (Ticker C) all reported better than expected results. Most experts believe that banking industry is still not out of the woods yet. The good news from major companies like, United Technologies(Ticker UTX), Harley-Davidson(Ticker HOG), Honeywell (Ticker HON), Johnson & Johnson(Ticker JNJ), International Business Machines Corporation (IBM), Mattel(Ticker MAT), and others all exceeded second quarter financial estimates confirming that US economy outside of banking sector is not that bad. However, technology giants, Google (Ticker Goog) and Microsoft’s (Ticker MSFT), both disappointed the investors. The DOW closed up 394 points, or 3.5%, the S&P500 was up 19 points, or 1.5% and NASDAQ up 20 points, or 0.9%, for the week ending July 18^th. Year-To-Date (YTD) S&P500 is -14.1%, DOW is -13.3% and NASDAQ is -13.9%.

Consumer Price Index (CPI) jumps 1.1% in June . According to the US Labor Department, the Consumer Price Index (CPI), measure of retail prices, jumped 1.1% in June after increasing 0.6% in May. The jump of 1.1% is the largest one-month increase since 1982! Consumer prices rose at an annual rate of 7.9% in the second quarter after increasing at a 3.1% rate in the first quarter of 2008. This brings the year-to-date annual rate to 5.5 percent. Many experts believe that the main cause for the CPI increase in June is due to surge in oil prices. With no end in oil price increases, inflation remains a major worry for the Fed Chairman, Ben Bernanke. The continuous rise of CPI can cause inflationary situation which Feds will have to watch closely.

Professor's Corner
Starting a Lemonade Stand Company Last week we discussed details of the week-12 and we asked you to calculate your profit distribution based on the information that we provided below. Some of you asked us to delay the answers, therefore we will discuss the final answers next week. The information below is the same as last week. This how the week-12 worked out – . SALES – You sold 120 lemonades this week. You also decide to keep your friend to help out for the week. . PRICE - Now that there is no competition left and the sales are going great, you had a decision to make - keep the price at $0.50 per cup or raise the price to $0.75 or $1.00 per cup? You decided to raise the price from $0.50 per cup to $0.65 per cup. CUSTOMERS – You are the only game in town left. Your competition “Jack & Jill Lemonade” is closed and you are serving a larger customer base. . PRODUCT AND SERVICES – You are keeping the quality of lemonade good. . COST – Your decision to raise price was influenced by the increased cost. For example, you had to hire your friend at $10 a week to help with the increased work load. Hiring your friend increased your cost and therefore reduced your profits. . You had planned do this business during your summer break. You have been doing it for the last 12 weeks. If you decide to close the lemonade business at the end of this week how will you share your profits? . Answers will be given in coming weeks, however, here are the key data for you to calculate your own profits. . 1. You started with $100 and at the end of 12 weeks you now have $390.75. This is a big pot of money. Is this all your money? Of course not, so who do you share this money with and how? 2. FIRST PAY YOUR LOANS (OR DEBT) - It is always good to build a good credit history - pay your debts first. Remember, your parent loaned you $35 at 12% annual interest. 12% annual rate translates into a daily interest rate of 12%/365. You used $35 for 12 weeks or total of 96 days (12 weeks X 7days per week). So how much is the interest amount you must pay with the principal of $35? Interest amount (I) = Principal loan amount (P) X Annual Interest rate (R) X Number of days for loan (T) ÷ total days in a year (Y). . 3. SECOND YOU PAY THE EQUITY HOLDERS or SHAREHOLDERS - Remember, your five good friends who agreed to pay $5 each, a total of $25 to help you start the lemonade business. After you have paid of the loans, now it is the time to share the rest of the profits with your friends (the Equity or shareholders), but how? After you have paid off your loans the left amount $390.75 – $35.97 = $354.78 will be shared with the rest of money providers on a prorata basis, in other words proportional to how much each initially invested. In this case, the total initial investment was $65. Of the $65, your savings of $40 was 62% and five friends contribution of $25 was 38% of the total investment. Therefore the monies will be shared 62% and 38% to you and your friends respectively. . Let us see what yor answers are. Keep up the good work! This is how your Week-12 numbers look –	Calculate your profits Answers will be provided later
Learn more about... What is Credit History? Why is it important to have a good credit history? Volume 12. What is Economy, Business, Workers, Goods, Services, Stock, DOW, S&P500, and NASDAQ in Volume 16. Does it pay to study hard? Volume 17. What is Currency and Foreign Currency Exchange rate? Volume 14. What is stronger or weaker currency? Volume 20. What does the dollar slide mean? Volume 32. How does money grow in a bank? Volume 21. What is Fed Funds rate and Discount rate? Volume 22 What does the interest rate cut mean for you? Volume 23. How to read stock information? Volume 25. What is "Black Monday"...Crash of 87"? Volume 31. Who are CEO, CFO, Shareholders, and the Board of Directors? What is SOX? Volume 33 What does "$4.95 + Tax" means? Volume 47. What is a Recession? What is a Depression? Volume 48. What is Mergers & Acquisition (M&A)? What is a Merger? Volume 49. What is ADR? Volume 62. What does buying back of shares means? Volume 63. Why is consumer confidence so important? Volume 64.

Jul 14-18, 2008

Weekly Stock Market

Market - Stocks Up!

Index

Change

Last

DOW

Up 394

11,497

S&P500

Up 19

1,261

NASDAQ

Up 20

2,283

Year-To-Date (YTD) S&P500 is -14.1%, DOW is -13.3% and NASDAQ is -13.9%.

**Foreign Exchange Rate**

**$1 is equal to**
Currency	Change	Last
Euro (€)	0.00	0.63
Yen (¥)	0.90	106.95
Pound (£)	-0.00	0.50
Yuan ()	-0.02	6.82
Rupee (Rs.)	-0.06	42.74
Canadian (C$)	-0.00	1.01

**Your Favorite Stocks**
Company	Bought one stock in Jan-08	This week stock is?	Your gain or loss?
	$31.84	$30.90	-$0.94
	$51.57	$51.60	$0.03
	$58.10	$60.44	$2.34

Resources

Teaching Kids Entrepreneurship

We use multiple information resources, such as, websites, companies, stock exchanges, newspapers, text books, and others.