Mathnasium Discusses Spring Tulips and Profit

Many years ago, we sowed our garden with an undisciplined grab-bag of bulbs. Our reward each Spring is a dizzying array of mixed blossoms. It's always a surprise what appears.

Today, we often associate tulips with Holland. However, tulips originated in the Ottoman Empire (presently-day Turkey) and was imported into Holland in the 16th century. The enterprising Dutch turned them into a huge industry -- let's see how. Solve this word problem model and compare your answer with ours after the video.

It costs Hank $23 to buy tulip bulbs for his garden. With those bulbs, he grows 160 tulips. He sells each tulip for 85¢. How much money does Hank make in profit?

Back to our observation that our bulbs appear different each year. The Dutch grew their industry to enormous valuation by breeding new bulbs. This is done by hybridizing, crossing bulbs with desired traits, and selecting offspring that have inherited the "right" mix of traits; and selling them with fancy names. Gregor Mendel in the 19th century described the math behind this approach. However, without constant selection for the "best" offspring, our bulbs have interbred and multiplied into a motley of varieties; none of which are worth naming. But we're just happy to see pretty colors. So we can understand why in the 1600s, when people first encountered the novelty of these beautiful flowers, they created a financial speculation in bulb trading. This caused one of the first financial market crashes in 1637 when "tulip bubble" burst. A cause that destroyed the tulip market was a viral infection that caused tulips to uncontrollably mutate in color and twisted deformations; and speculators and producers could not meet their financial contracts. Today, Holland is still the leading global bulb producer. And the result of that disastrous disease are some beautiful mutations that breeders have carefully selected and enhanced.

And have we learned from financial speculative mania?

Have we learned from financial speculation mania? There is good historical evidence that the financial market experiences an upheaval roughly every 7 years. Those that learn their history will hopefully be spared from repeating it. By the way, we're about 7 years from the last huge 2008 financial market meltdown.

And back to our problem. Extra multi-step problem solving is commonly requested for our students; and fortunately Mathnasium has an extensive set of teaching materials that explain each step to a solution. In this problem, we'll explain that profit means the difference between proceeds from sale, and the original cost. We're given the original cost, and hence we have to find the sales proceeds. Since 1 tulip yields 85 cents, then 2 tulips will yield twice as much, and 3 tulips 3 times as much. This should lead the student to understand that the sales proceed should be 160 tulips x 85 cents/tulip = 13,600 cents = $136.00. Hence the profit is $136 - $23 = $113.

That's a handsome profit and if Hank thinks he can make this kind of money next year, he may speculate by borrowing money to buy more bulbs. He could certainly make quite a sum even after paying off his loan. However, if a calamity affects his growing tulips, or if customers are no longer interested in tulips, then he may not be able to cover his loan. If his lender needs to be repaid, but Hank can't repay, then Hank will have caused a minor financial collapse. What havoc do you think a few thousand Hanks could cause?

References:
http://www.flowermeaning.com/t...
anthro.palomar.edu/mendel/mendel_1.htm
www.bbc.com/culture/story/2016...
io9.gizmodo.com/5905247/the-virus-that-destroyed-the-dutch-economy

Contact:
Ruby Yao and Benedict Zoe, Mathnasium of Fort Lee
201-969-6284 (WOW-MATH), fortlee@mathnasium.com
246 Main St. #A
Fort Lee, NJ 07024
Happily serving communities of Cliffside Park, Edgewater, Fort Lee, Leonia, and Palisades Park.