In a recent article on CNBC, "Math-Challenged Americans More Likely to End Up in Foreclosure," reported the findings of "Numerical Ability Predicts Mortgage Default," from the Proceedings of the National Academy of Sciences.

The article reported the two big messages of the research. "First, numerical ability heavily correlates to mortgage default, even controlling for a lot of other things. Second, defaults were not driven by the mortgage choices people make. Their mistakes come somewhere else."

"To support their findings, the researchers examined actual mortgage payment data obtained from the Federal Reserve, and then surveyed mortgage holders to assess their math skills. Each were asked a series of five questions (see below) and then assigned to one of four "buckets.""

"Roughly 1 in 7 test-takers couldn't answer two questions correctly, and landed in the lowest bucket. That group was four times more likely to be in foreclosure than consumers who landed in the top bucket by answering all five questions correctly."

"In 1988, mathematician John Allen Paulos in is book, "Innumercy," argues that being a math dummy in America is not frowned upon, like illiteracy. In fact, it can be socially desirable."

He wrote, "the same people who cringe when words such as imply and infer are confused react without of trace of embarrassment to the most egregious of numerical (errors)." He tells of an acquaintance who heard a weathercaster report a 50 percent chance of rain on Saturday and on Sunday and concluded that there must be a "100 percent chance of rain that weekend."

**MATH SKILLS TEST**

1. In a sale, a shop is selling all items at half price. Before the sale, a sofa costs $300. How much will it cost in the sale?

2. If the chance of getting a disease is 10 per cent, how many people out of 1,000 would be expected to get the disease?

3. A second-hand car dealer is selling a car for $6,000. This is two-thirds of what it cost new. How much did the car cost new?

4. If 5 people all have the winning numbers in the lottery and the prize is $2 million, how much will each of them get?

5. Let's say you have $200 in a savings account. The account earns 10 percent interest per year. How much will you have in the account at the end of two years?

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