Maths A - Chapter 3

3

In thisIn this chachapterpter3A Discount3B Profit and loss3C Budgeting3D Cost of services3E Credit cards3F Foreign exchange

syllabussyllabusrrefefererenceenceStrand:Financial mathematics

Core topic:Managing money 1• Spending money

Spending money

MQ Maths A Yr 11 - 03 Page 63 Wednesday, July 4, 2001 2:35 PM

64

M a t h s Q u e s t M a t h s A Ye a r 1 1 f o r Q u e e n s l a n d

Introduction

Karla is now earning better money. Her first fortnightlypay of $985 was deposited into her bank account onFriday, 24 January. Less than two weeks later heraccount balance was $28. Karla could not believe thatshe had spent over $950. Where did it all go? She satdown and wrote out all the things she had spentmoney on, and

how

she had parted with it. Much hadbeen spent at retail stores buying groceries, clothes,books and CDs. She had paid for herpurchases in cash. Perhaps, shethought, she should get a creditcard, but she found that therewere service charges for creditcards, as well as interest.Perhaps she could buy morewhen there were discounts. Shewondered whether she shouldhave a budget. Clearly, she neededa better understanding of the detailsof handling her hard-earned money,or it was just going to leak away.

Discounts, credit card charges, the costs of servicesand budgeting are topics that affect us all and, likeKarla, we owe it to ourselves to understand how thesework so that we can make the best use of our money.

These and other related topics will be discussed in the following sections of thischapter.

1

Calculate 7.5% of $450.

2

Increase $220 by 8%.

3

Reduce $360 by 15%.

4

After receiving a pay rise of 10%, Jaime’s wage was $396. What was her wage beforethe pay rise?

5

Fifty-five litres of petrol cost $49. What will sixty litres of petrol cost?

SkillSH

EET 3.2

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C h a p t e r 3 S p e n d i n g m o n e y

65

Discount

The first thing that Karla decided to do was to get more for her money. Consequently,she decided to buy discounted items wherever possible.

A

discount

is an amount of money by which the price of an item is reduced. Ifexpressed as a percentage of the original price, it is called a

percentage discount

.Discount

=

Original price

−

Sale price

Percentage discount

=

×

100%

When the original price and the percentage discount are known, there are two methodsof finding the sale price.

Method 1

1. Find the discount in dollars (by finding the percentage of the original price).2. Subtract the discount from the original price.

Sale price

=

Original price

−

percentage of the original price

Method 2

1. Treat the original price as 100%.2. The sale price is then represented by (100%

−

% discount).Sale price

=

(100%

−

percentage discount) of the original price

The choice of method depends on the problem. If the problem requires you to findthe discount in dollars and hence the sale price, use method 1. If the actual amount of adiscount is not needed, use method 2 (which gives the sale price straight away).

DiscountOriginal price---------------------------------

A vacuum cleaner is discounted from $180 to $126. Find the percentage discount.

THINK WRITEFind the discount in dollars. Discount = Original price − Sale price

= $180 − $126= $54

Write the formula for the percentage discount.

% discount = × 100%

Substitute the values of the discount and the original price into the formula and evaluate.

% discount = × 100%

= 30%Write the answer. The vacuum cleaner was discounted by 30%.

1

2Discount

Original price---------------------------------

354

180---------

4

1WORKEDExample


66


Sometimes we are given a discount and the sale price and need to find the originalprice, as shown in the following example.

Find the sale price on a $42 kettle after a 12.5% discount has been applied.THINK WRITEMethod 1

Find the discount in dollars. Discount = 12.5% of $42

= × 42

= $5.25Find the sale price by subtracting the discount amount from the original price.

Sale price = Original price − Discount= $42 − $5.25= $36.75

Method 2Express the sale price as a percentage of the original price.

Original price = 100%, Discount = 12.5%Sale price = 100% − 12.5%

= 87.5%Find the sale price in dollars. Sale price = 87.5% of the original price

= × 42

= $36.75

1

12.5100----------

2

1

2

87.5100----------

2WORKEDExample

After a 20% discount, a kilogram of scotch fillet steak costs $9.60. Find the original price and the amount of money saved per kilogram.THINK WRITE

Identify the unknown. Let the original price be x.Express the sale price as a percentage of the original price in terms of x.

Original price = 100%, Discount = 20%Sale price = Original price − Discount

= 100% − 20%= 80%

So sale price = 0.8xForm an equation by equating an expression for the sale price with the sale price in dollars and solve for x.

0.8x = 9.60x = 9.60 ÷ 0.8

= $12Find the amount saved. Amount saved = Original price − Sale price

= $12 − $9.60= $2.40

Write the answer. The price of 1 kg of scotch fillet steak before the sale was $12. The amount of money saved per 1 kg is $2.40.

12

3

4

5

3WORKEDExample


C h a p t e r 3 S p e n d i n g m o n e y 67

Discount

1 Find the percentage discount for each of the following items.a A dress, discounted from $80 to $60b A watch, discounted from $365 to $185c A clock, discounted from $47 to $34d A lamp, discounted from $59 to $42e A coffee table, discounted from $270 to $239f A set of kitchen knives, discounted from $49 to $36g A cordless phone, discounted from $119 to $89h A tablecloth, discounted from $25 to $18i A bookshelf, discounted from $70 to $63j A scientific calculator, discounted from $30 to $24

2 Below are some items from a Home Shopper direct marketing brochure.

a b

cd

Next to each item is the retail price and the Home Shopper’s price. For each item,find: i the discount amount in dollars when the goods are purchased directii the percentage discount.

remember1. Discount = Original price − Sale price

2. Percentage discount = × 100%

3. Sale price = Original price − percentage of the original price= (100% − percentage discount) of the original price

DiscountOriginal price---------------------------------

remember

3AWORKEDExample

1

MAGIC BlenderBlends drinks, sauces, grinds coffee, chops nuts.12 Month Warranty. Retail $39.95Home Shopper’s price $29.90Home Shopper’s price $29.90

SANDWICH ToasterToasted sandwiches to go. Easy clean.12 Month Warranty. Retail $29.95Home Shopper’s price $22.90Home Shopper’s price $22.90

TEFLON–Based IronLight weight, easy glide iron.12 Month Warranty. Retail $39.95Home Shopper’s price $22.90Home Shopper’s price $22.90

RETRO–ToasterYour choice of colours, automatic, variable control.12 Month Warranty. Retail $39.95Home Shopper’s price $32.00Home Shopper’s price $32.00


68 M a t h s Q u e s t M a t h s A Ye a r 1 1 f o r Q u e e n s l a n d

3 This advertising brochure states that all manchester (sheets and towels) is discounted by up to 30%. Find the real percentage discount for each item. Comment on your findings.a Single sheetsb Double sheetsc Queen sheetsd Single quilt covere Double quilt coverf Queen quilt coverg King quilt cover

4 Healthway is promoting savingsin its health and beauty products.For each of the items shown at right, find:

i the original priceii the percentage discount.

5 Copy and complete the following table.

Item

Original price

($)Discount

(%)Discount

($)

Saleprice

($)

a Microwave oven 300 10%

b Furniture set 2030 5%

c Mirror 40 30%

d Necklace 1560 12.5%

e Refrigerator 760 20%

f Stereo system 480 33 %

g Washing machine 564 25%

h Car 7500 50%

Health & beautyCOSTS LESS at Healthway

Health & beautyCOSTS LESS at Healthway

HAIRCOLOURCondtioner

DelightDelight&Bright

Shampoo

Delight

Delight&Bright

Hair Colour Varieties

$957 Save1.00

Hand cream

$545 Save46c

100s

$399 Save66c

50s

$749 Save86c

75s

$1499 Save2.00

200ml

$399Save up to 99c

Vitamin

CCMulti

Vitamin

Horseradish

Garlic&

a b c

d e f

WORKEDExample

2

13---


C h a p t e r 3 S p e n d i n g m o n e y 696 A department store announced a 15% discount on every purchase for one day only.

Elena decided to use the opportunity to buy new clothes for her daughter. She boughta dress normally priced at $29, a 3-piece shorts set (normally $30), pedal pushers(normally $16), an embroidered top (normally $18) and sandals (normally $26). Find:a the total cost of the clothesb the amount she had to pay after the 15% discount was appliedc the amount of money Elena was able to save on these purchases by shopping on

that day.

7The calculation that could not be used to find the sale price of a $64 item after a dis-count of 12.5% is:

8The ring that will cost $78 after a discount of 33 % is:A a friendship ring, normally $104B a mother of pearl ring, normally $130C a sapphire ring, normally $260D a Russian band ring, normally $117E a ruby ring, normally $234

9 After a discount of 15%, a jar of Kenya Gold coffee costs $10.15. Find:a the original priceb the amount saved on each jar.

10 A Byer shareholder has a special card which allows a 5% discount on any purchasemade at Byer’s supermarkets (excluding items that are already on sale).a What is the total cost of goods purchased by the shareholder who, after producing

the card, pays $166.25. (There are no sale items included.)b What is the amount saved?

11 Before the beginning of a winter sale, a shop assistant was asked to reduce the pricesof all items in the store by 12.5%. She calculated the new prices and attached new tagsto the goods. At the end of the sale she was asked to put the old prices back. Unfortu-nately, the shop assistant had thrown the old tags away as she did not think she wouldneed them again. She decided to add 12.5% to the sale prices. If the shop assistantproceeds in this manner, will she get back to the original prices? Explain your answer.

A B C

D of 64 E 64 − × 64

mmultiple choiceultiple choice

12.5 64×100

---------------------- 64 12.5 64×100

----------------------– 87.5 64×100

----------------------

78--- 1

8---

mmultiple choiceultiple choice13---

WORKEDExample

3



Profit and lossWhen an item is sold for more than it cost, the difference is said to be profit. It iscustomary to express profit as a percentage of the cost price:

Profit = Selling price − Cost price

Percentage profit = × 100%

Loss = Cost price − Selling price

Percentage loss = × 100%

When the cost price and percentage profit/loss are known and we need to find theselling price, there are two methods that can be used (see the following example).

ProfitCost price------------------------

LossCost price------------------------

Find the percentage profit on an item that was bought for $30 and later sold for $38.

THINK WRITE

Identify the cost price (CP) and the selling price (SP).

CP = $30; SP = $38

Write the formula for the profit.(SP > CP)

Profit = SP − CP

Substitute the values of CP and SP into the formula and evaluate.

Profit = $38 − $30= $8

Write the formula for the percentage profit. Percentage profit = × 100%

Substitute the values of profit and CP into the formula and evaluate.

Percentage profit = × 100%

= 26.67%

1

2

3

4Profit

CP-------------

58

30------

4WORKEDExample

Find the percentage loss if an item was bought for $220 and sold later for $180.

THINK WRITE

Identify the cost price (CP) and the selling price (SP).

CP = $220; SP = $180

Write the formula for the loss. (SP < CP)

Loss = CP − SP

Substitute the values of CP and SP into the formula and evaluate.

Loss = $220 − $180= $40

Write the formula for the percentage loss. Percentage loss = × 100%

Substitute the values of the loss and CP into the formula and evaluate.

= × 100%

= 18.18%

1

2

3

4LossCP

-----------

540

220---------

5WORKEDExample



Finally, there are cases when the selling price and the percentage profit (or loss) areknown and we need to find the CP. The next example shows how to deal with suchproblems.

A shopkeeper buys jumpers from a wholesaler for $22 each and wants to make a profit of 20% per jumper. What should be the selling price of a jumper to provide this profit?

THINK WRITE

Method 1Find the profit in dollars. Profit = 20% of CP

= 20% of $22

= × 22

= $4.40Find the selling price by adding the profit to the cost price.

SP = CP + Profit= $22 + $4.40= $26.40

Method 2Treating the cost price as 100%, express the selling price as a percentage of the CP.

CP = 100%; profit = 20%SP = (100 + 20)%

= 120% of CPSubstitute the values of the CP and substitute.

SP = 120% of $22

= × 22

= $26.40

1

20100---------

2

1

2

120100---------

6WORKEDExample

A retailer sells a TV set for $732, making herself a profit of 22%. Find the wholesale price of the TV set.

THINK WRITE

Identify the unknown. Let the CP be x.Express the SP as a percentage of the CP in terms of x.

CP = 100%Profit = 22%SP = (100 + 22)% = 122%So SP = 122% of CP

= 1.22 × CP= 1.22x

Form an equation by making the expression for the selling price equal to $732.

1.22x = 732

Solve for x. x = 732 ÷ 1.22x = 600

Write the answer. The wholesale price of the TV set was $600.

12

3

4

5

7WORKEDExample



Profit and loss

1 Find the percentage profit (to 2 decimal places) for each of the following items.

Item CP ($) SP ($)

a Tracksuit 80 139.95

b T-shirt 16 22.50

c Tennis shoes 49.95 89.95

d Tank top 6 9

e Swimsuit 38 59

f Short socks 2 5.95

g Training pants 20 29

h Tennis skirt 22 36

remember1. Profit = Selling price (SP) − cost price (CP)

2. Percentage profit = × 100%

3. Loss = CP − SP

4. Percentage loss = × 100%

ProfitCP

-------------

LossCP

-----------

remember

3B

Mathca

d

Profit and loss

WORKEDExample

4


C h a p t e r 3 S p e n d i n g m o n e y 732 The following goods were sold at a garage sale. Find the percentage loss for each of the

items, correct to 2 decimal places.

3 A shopkeeper buys 20 kg of cooking chocolate for $50 and sells it in 500 g packets at$3 each. Find the profit made and express it as a percentage of the cost price.

4 Alex had a collection of 5 Betallica CDs, which hepurchased over a period of time at $29.95 each.A friend offered to pay $70 for the whole set.Find the loss in dollars and express it as apercentage of the cost price.

5 A shopkeeper at the Southbank Marketsbuys sheepskin moccasins from thewholesaler at the following prices: chil-dren’s sizes — $12 per pair; adults’sizes — $17 per pair, and extra-largesizes — $19 per pair. If the shopkeeperwants to make a 20% profit, what should bethe sale price for each type?

6 Michael buys a car for $12 000. It depreciatesat a rate of $900 per year. If Michael wants hislosses to be no more than 30% of the cost price,after how many years from the purchase doeshe have to sell the car?

7 By selling a collection of coins for $177, Igormakes a profit of 18%. What was the originalcost of the collection?

8 A retailer has purchased a particular style ofjumper which is proving to be unpopular. Afterattempting to sell them for two consecutive sea-sons, the retailer decides to put them on sale at$15 each to recover part of the cost. Find thewholesale price of each jumper if the retailer suf-fers a 40% loss.

Item CP ($) SP ($)

a Cutlery 40 8

b Two bedside lamps 100 22

c Vase 35 5

d Toaster 19.95 1.50

e Electric kettle 42 6

f Set of golf clubs 150 45

g Set of building blocks 16 4

h Five paperback books by Sydney Sheldon

60 2.50

WORKEDExample

5

WORKEDExample

6

WORKEDExample

7


74


1

A tennis racquet is discounted from $240 to $180. Calculate the percentage discount.

2

A pair of running shoes is advertised at $140. What does a customer pay if a 25%discount is applied.

3

After bargaining with the salesperson, Sue has the price of a computer reduced from$1200 to $1050. Express this reduction as a percentage of the original price.

4

A carton of drinks is marked at $28. If all stock is reduced by 15%, calculate the costof the drinks.

5

A shopkeeper buys a 12-kg case of tomatoes for $20. If he sells all of the tomatoes for$2.50 per kg, calculate the percentage profit.

6

Karen pays $12 each for fake name brand watches. When she sells them she wants tomake an 80% profit. What price should she sell these watches for?

7

Michelle buys and sells second-hand skateboards. She makes a 40% profit on eachsale. If she sells a skateboard for $56, what did she originally pay for the skateboard?

8

John paid $50 for a dozen trophies. If he sells them for $14 each, calculate the per-centage profit.

9

P-Mart make 30% on all their sales. If they pay $600 for a dining suite, what priceshould they sell it for to make the desired profit?

10

Hans sells a restaurant for $198 000. He calculates that he has made a 10% profit onthe buying price. What did he pay for the restaurant originally?

Dealing in diaries

Just before Christmas a shopkeeper purchased a box of 50 diaries for $120.

1

Find the cost price of each diary.

2

If he sold 30 diaries before Christmas at $5 each, calculate the profit that he would make.

3

Find the percentage profit.

4

If, after Christmas, the shopkeeper sold the remaining diaries for $1 each, find the percentage loss on each of these diaries.

5

After the shopkeeper had sold the leftover diaries (at $1 each), find the total profit that he made.

6

Express the total profit as a percentage of the cost price.

7

Find the profit that the shopkeeper could have made had he managed to sell all of the diaries before Christmas (at $5 each).

8

What was his loss (in dollars) by not selling all of his diaries before Christmas?

9

Express the loss as a percentage of the potential profit.

1in

vestigation

investigation

MQ Maths A Yr 11 - 03 Page 74 Friday, July 6, 2001 1:56 PM


BudgetingKarla wants to go to New Zealand for her holidays next year;but if she saves only $28 each pay, she will certainly nothave enough money to go. Although she is to receive a payrise, she realises that she still does not know how muchshe will need to save. She understands that a budget willhelp her, so decides to look into the principles ofbudgeting in more detail.

A budget is a table containing an estimate of incomeand expenditure. A personal (or family) budget can helpyou to:1. ensure that you do not spend more than you earn2. estimate the amount of money that you can save3. control your expenses and perhaps cut some of them

in order to save more4. decide what you can and what you can’t afford.

A personal budget helps you to make various financialdecisions. The expenses in the personal (or family) budget canbe divided into two major categories: fixed (or unavoidable) expenses and variableexpenses. Fixed expenses may include rent or mortgage, medical insurance, car regis-tration and other regular payments that must be paid and can’t be varied. Variableexpenses include food, entertainment, clothing and other items that can be controlled orvaried. To reduce some expenses in order to save more money, one would look intovariable expenses.

A weekly, monthly or yearly budget can be prepared. Expenses may be weekly (suchas food), monthly (health insurance), quarterly (electricity bills) or yearly (carregistration). Depending on the budget duration, all expenses should be converted toweekly, monthly or yearly amounts. The following table of conversion is helpful inbudget preparation.

It should be understood that budgets give only an approximation of the real-lifesituation, as they are based on estimates and do not include unexpected expenses.

Purpose Convert from Convert to Operation

Weekly budget Monthly cost Weekly cost × 12, then ÷ 52

Yearly cost Weekly cost ÷ 52

Monthly budget Weekly cost Monthly cost × 52, then ÷ 12

Yearly cost Monthly cost ÷ 12

Yearly budget Weekly cost Yearly cost × 52

Monthly cost Yearly cost × 12



Karla’s monthly budget.

Use the table to resolve each of the following.a Calculate the total of the fixed expenses. Note that Karla views health insurance, house

contents insurance and car insurance as important expenses, and their regular pay-ments are fixed.

b Calculate the total of the variable expenses.c Calculate the amount available for saving.d If Karla wishes to take a vacation and travel to New Zealand (estimated cost $3500),

for how long does she have to save?e Suggest some possibilities for cutting expenses in order to save enough money for the

New Zealand holiday one month sooner.

Income Expenses

Salary after tax $2050Dividends from shares $23

Rent of 1-bedroom flat $520Electricity $70Phone $40Health insurance $30House contents insurance $10Car registration $27Car insurance $42Petrol $35Food $110Clothing $150Entertainment $150Sport $100Miscellaneous $40

Total: $2073 Total: $1324

THINK WRITE

a Identify the fixed expenses and add them up.

a Fixed expenses:Rent $520Health insurance $30House contents insurance $10Car registration $27Car insurance $42

Total = 520 + 30 + 10 + 27 + 42 = $629b Calculate the total of variable expenses

by subtracting fixed expenses from the total.

b Total of variable expenses= total expenses − total of fixed expenses= 1324 − 629= $695

c Calculate monthly savings by subtracting expenses from the income.

c Monthly savings= monthly income − monthly expenses= 2073 − 1324= $749

8WORKEDExample



The Australian budgetBudgets can be prepared for individuals, families and small organisations. However, there is also a budget for each country. Investigate the last Australian budget.

1 Who prepares the budget?

2 What is the budget’s period?

3 What is/are the source/s of income?

4 What are the items in the expenditure section (that is, where does the money go)?

5 Was there any deficit in the last budget?

THINK WRITE

d Calculate the number of months required to save for the holiday.

d To save $3500 at the rate of $749 per month:3500 ÷ 749 = 4.67 or approximately5 months

e Identify the number of months within which the money is to be saved.

e To save one month sooner than calculated in part d means 5 − 1 = 4 months

Calculate the amount required to be saved monthly.

Monthly savings needed = 3500 ÷ 4Monthly savings needed = $875

Calculate the extra amount which is to be saved per month.

Extra monthly savings needed= $875 − $749= $126

Suggest cuts in variable expenses. Cuts could be made as follows:Phone bills: cut from $40 to $30 gives

$10Clothing: cut from $150 to $80 gives

$70Entertainment: cut from $150 to $104 gives $46

This gives 10 + 70 + 46 = $126, which is the required extra saving.

1

2

3

4

inve

stigationinvestigatio

n

remember1. A budget is a table that contains an estimate of income and expenditure.2. The two major categories of expenses are fixed and variable expenses.3. Both budget and expenses can be calculated weekly, monthly, quarterly or

yearly. Depending on the budget, all expenses should be recalculated for the same time interval.

remember



Budgeting

1 The table below shows the monthly budget for a couple with one school-aged child.

Use the table to calculate the following:a the total of fixed expensesb the total of variable expensesc the total monthly savingsd the time needed for the family to save enough for a trip to Bali (estimated cost $3000).

2 List as many variable expenses as you can that are missing from the budget in question 1.

3 A university student who lives with her parents has the following expenses: she paysher parents $50 per week for board and food; a monthly ticket for public transport costsher $63; she spends on average $40 a month on books and stationery; her single healthinsurance premium is $24 a month; entertainment and snacks cost her about $55 amonth; the university enrolment fee takes $300 a year and she also needs clothes andaccessories which cost approximately $15 per week.a Prepare a monthly budget if the student’s income consists of Austudy (which is

$116 per week) plus birthday and Christmas presents ($250 a year).b Calculate the amount of money that she can save per month.

Income Expenses

Combined monthly salaryafter tax $3800

Mortgage repayments $1200Rates $75Building insurance $20Contents insurance $15Electricity $120Gas $25Telephone $50Car registration $35Car insurance $50Health insurance $60School fees $110Food $160Clothing $60Entertainment $100Sport $75Miscellaneous $120Household needs and repairs $20Petrol $55

Total: $3800 Total: $2350

3CWORKEDExample

8


C h a p t e r 3 S p e n d i n g m o n e y 794 Using the figures in the table below, prepare an expenditure side of a weekly budget.

5 The student in question 3 is offered a part-time job in the university cafeteria, whereshe will be able to earn $66 per week.a Calculate her total monthly savings if she accepts this position.b Our student is considering moving in with her friends. By doing so she will save the

$50 per week that she is paying to her parents in board and food, but she will haveto pay $100 per month for her share of the rent. She will also have to contribute$45 per month for electricity and phone bills and $60 per week for food. With thenew job can the student afford to move out of home? Support your answer withappropriate calculations.

6 Prepare your personal monthly budget (or your family budget if you do not have anyincome). Are there any possibilities for cutting some of the expenses?

7 Members of a welfare group are discussing the budget for the next year. Their incomewill come from three sources: a government subsidy of $4200; annual membership feesof $25 per person and profits from the various events. They estimate that the auctionwill bring in $400, profits from the food stalls (at the picnic and the three local fairs)will be $230 each time and profits from the two concerts will yield about $1800 each.They also estimate that about 650 people will renew their membership. The money willbe spent as follows: rent of the premises at $500 a month; publishing the newsletter$240 per quarter; expenses of $180 associated with each Sunday School for 40 weeks ayear; electricity and phone bills at $220 a month; public liability and contents insur-ance, $1860 per year. Advertising will cost $30 per month and stationery $250 per year.After buying a new computer (for about $3500) and allowing $2000 for unexpectedexpenses, the rest of the money will be spent on charity.a Prepare a yearly budget for the welfare group.b Calculate the amount of money left to use for charity.c Express your answer to b as a percentage of the annual income.

Item Cost and period

Rent $600 per month

Food $90 per week

Electricity $420 per 3 months

Gas $40 per 2 months

Phone $360 per 3 months

Car registration $430 per year

Car insurance $500 per year

Health insurance $175 per 3 months

Contents insurance $125 per year

Clothes $100 per month

Entertainment $80 per month

WorkS

HEET 3.1



Cost of servicesAn important part of being able to prepare a personal budget is to understand howvarious organisations charge for their services.

The following questions are designed to help you investigate the cost of services,such as electricity and gas charges, water and council rates and the costs of using atelephone.

The club’s end-of-season break-upWork in groups of three.Karla is a member of the committee of her local netball

club and she has been asked to organise food and drinks for the club’s breakup. It is to be a BBQ held at the

club grounds. Everyone who attends will be asked to pay a certain amount and the club will supply food and drinks.

Last year about 100 people attended and the number is expected to be the same this year.

Your task:1 Help Karla plan a menu, indicating what

each person could be expected to eat and drink.

2 Prepare a shopping list with definite, specific quantities and prices.

3 Suggest to the committee a cost per person that should cover expenses plus 10%.

inve

stigationinvestigatio

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Cost of services

Study the electricity bill shown below and answer the following questions.

1 a What is the total amount to be paid?b When should this bill be paid?c How does this bill compare with the bill from the previous quarter?d On what dates were the meter readings taken?e What is the average daily cost of electricity?f If the Beales want to prepare a weekly budget, what amount should they allocate

to the cost of electricity?g How does the average daily kWh usage compare with the same period last year?

2 The bill records two different types of consumption — Tariff 11 (used for lights,toasters etc.) and Tariff 33 (used for hot water systems and other devices whose powerconsumption can be restricted to off-peak times).

3D



a How many kWh in Tariff 11 were used in the quarter?b What was the most recent Tariff 11 meter reading?c What GST was charged on the Tariff 11 consumption?d What is the cost of the Tariff 11 supply before GST is added?e Calculate the cost of Tariff 11 supply (in cents per kWh) if it is charged at a flat rate.

3 a Estimate the consumption, in kWh, of Tariff 11 supply for the February quarteraccount last year.

b Estimate the consumption, in kWh, of Tariff 33 supply for the February quarteraccount last year.

c Estimate the cost of last year’s bill, if the rates charged were the same as thosecharged this year. (Include GST.)

4 Study the gas bill shown below for the February quarter and answer the followingquestions.


C h a p t e r 3 S p e n d i n g m o n e y 83a What is the value of the bill?b How does this bill compare with last quarter’s?c How does this bill compare with the bill for the same quarter last year?d What is the average daily cost of gas consumption?e What would you estimate the yearly cost of gas consumption?f If Jane is to make a monthly budget, how much should she allow for gas?

5 The following figure shows the reverse side of the gas bill.

You will notice that the amount of gas consumed is given in Megajoules (MJ) and iscalculated indirectly from the meter readings. An ‘MJ factor’, which depends onquantities such as temperature and pressure, is used to convert from the meter read-ings to Megajoules.a What is the difference between the meter readings?b Explain how the consumption, in MJs, is calculated from the difference between

meter readings.c How much GST is charged in this bill?d What is the rate, in cents per MJ, of

the cost of the first 1710 MJ?e Using the rates given in the bill,

calculate the cost of 6000 MJ (excluding GST).

6 In the May quarter last year the average daily consumption of gas was 70 MJ. If there were 91 days in this quarter, calculate the:a total gas consumption for the quarterb total cost of this gas (excuding GST)c GST payable on this cost of gasd total cost of gas for this quarter.

7 In the August quarter last year the average daily consumption of gas was 85 MJ. If there were 93 days in this quarter, determine the total cost of gas for this quarter, including GST.



Questions 8 to 11 refer to the Brisbane City Council Rates notice shown below.



8 a What amount is to be paid, if the bill is paid before 13th June?b What amount is to be paid, if the bill is paid after 13th June?c Why is Mr Ratepayer’s bill subsidised?d Calculate the bill to be paid if the subsidies and remissions were not given.e Estimate Mr Ratepayer’s yearly rates bill.f If he is planning a monthly budget, how much should he allocate for rates?

9 a How much water is used in the quarter?b What is the cost, in cents per kL, of water?c How much water would he expect to use in a year?



10 If Mr Ratepayer’s water meter readings were845 987

calculate his water bill for this period. Include the water service charge.

11 a What was the increase in the valuation of the property from 01 July 1998 to 01July 1999?

b Express this increase as a percentage of the original valuation.

12 The first page of a telephone bill issued by Telstra is shown below.

a Explain how the total of thisbill was calculated from thecomponents shown.

b What percentage of the totalbill does the service chargerepresent?

c Is there any concessionavailable for the telephonebill?

d If the service charge isalways constant, what wasthe total of the previous bill,assuming that the Flexi-Planwas not yet introduced?

Telstra BillTelstra Corporation LimitedACN 051 775 556Account number

Opening Balance We received

93 � Flexi-Plan balance 8.40 cr

91 � Call charges to 23 June 116.51

92 � Service and equipment to 23 June 42.45

Total of this bill $150.56

Item Account Summary Your Reference 07 5551 0000 $

Balance Total of this bill

Bill number Date of issue Bill enquiries

Total amount payable

$150.55

30 Jun 01

Payment to be made by

T 000 123 123-2

$0.00

MS A SAMPLE10 SAMPLE STREETSAMPLEVILLE 0000

$0.00 $0.00 $150.56

000 0000 034 25 June 01 13 20 00

Calling Patterns Compared With Last Bill

Local Calls up by $8.75

STD Calls up by $4.06

Calls to Mobiles up by $2.00

June-00 Oct-00 Mar-01 June-01

$200

$160

$120

$80

$40

$0

Same TimeLast year

Total Bill


C h a p t e r 3 S p e n d i n g m o n e y 8713 Page 3 of the Telstra bill is shown below.

a According to the service summary, how many metered calls were made and whatwas the cost of each call?

b What percentage of the service and equipment charge does the rent of the telephonerepresent?

c If a family buys a telephone valued at $89 and hence stops renting one fromTelstra, in how many months will the savings from not paying rental cover the costof the new phone?

d Use the itemised STD Calls section to find the afternoon rate for calling Marysville.

e Study the Calls Direct to Mobiles itemised section and complete the followingstatement: ‘Judging from the bill it is reasonable to assume that the off peak rate isapplied to any calls to mobiles made after pm.’

Local Call Saver 15

69 Plan fee 23 Mar to 23 June 0.00

71 Discount 8.40 cr

Plan balance $8.40 cr

Total Flexi-Plan balance $8.40 cr

Item Flexi-Plan Details $

Telephone Service 07 5551 0000

Flexi-Plan/Concession discounts $8.40 cr

Call charges

51 Metered calls 23 Mar to 23 June 404 units at $0.25 each 101.00

57 STD to 23 June 8 calls 6.51

58 Calls direct to Mobiles to 23 June 9 calls 9.00

Service and equipment

2 1 Telephone Handset Rental

Rent in advance 23 Mar to 23 June 2.50 7.50

1 1 Telephone Line Rental

Rent in advance 23 Mar to 23 June 11.65 34.95

Total for 07 5551 0000 $150.56

Item Service Summary $

STD CallsDate Time Place Number Rate Min:Sec $Telephone Service 07 5551 0000

27 23 Mar 02:54 pm Marysville 03596 Afternoon 2:30 0.5725 23 Mar 08:13 pm Warburton 03585 Economy 1:51 1.2826 23 Mar 06:54 pm Marysville 03596 Economy 1:05 0.2324 02 Apr 03:32 pm Marysville 03596 Economy 1:35 0.2821 03 Apr 01:04 pm Warburton 03585 Afternoon 2:39 1.4822 02 May 10:01 pm Marysville 03596 Economy 1:09 0.2419 07 May 02:17 pm Warburton 03585 Economy 4:12 1.5420 09 May 10:34 am Marysville 03596 Economy 7:42 0.89

STD CallsDate Time Place Number Rate Min:Sec $Telephone Service 07 5551 0000

45 23 Mar 08:13 pm Mobile 0411309 Off Peak 0:17 0.5046 23 Mar 04:39 pm Mobile 0411309 Peak 0:47 1.2548 06 Apr 12:33 pm Mobile 0411309 Peak 0:42 1.0047 10 May 02:59 pm Mobile 0411309 Peak 0:43 1.0050 07 May 01:33 pm Mobile 0411309 Peak 1:44 1.2544 08 May 12:35 pm Mobile 0411834 Peak 4:19 2.2549 21 May 08:37 am Mobile 0411309 Off Peak 0:07 0.5037 23 Mar 06:42 am Mobile 0411309 Peak 0:20 0.5043 03 May 07:36 pm Mobile 0411690 Off Peak 0:36 0.75

Item

Item

STD Calls - Itemised $

Calls To Mobiles - Itemised $

Page 3



Credit cardsKarla has decided that it is time for her to obtain a credit card.

A credit card will allow her to purchase goods and services withoutpaying for them on the spot. They can also be used for obtaining cashadvances, paying bills and making purchases over the phone or on theInternet.Common credit cards used in Australia include MasterCard, Visa,

Bankcard, Diners Club and American Express.When applying for a MasterCard, Visa or Bankcard, a customer is

given a choice of having either an interest-free period(usually up to 55 days) for a small annual fee (around$22), or no fee payable and no interest-free period(with the interest rate usually being lower for thesecond option). Each cardholder is offered a certain

limit of credit.A monthly statement showing all transactions for the

previous month is issued for every cardholder. Uponreceiving a monthly statement, a customer may decide to pay the bank in full by thedue date indicated on the statement and hence not have to pay any interest with aninterest-free period card. Alternatively, the customer may choose to make the minimumpayment only. In this case interest will be charged on the unpaid balance. Theminimum payment is usually a certain percentage of the unpaid balance or a certainfixed amount — whichever is larger. Variations in interest rates occur from time to timeand cardholders are notified of these changes in advance.

Below are two extracts from Commonwealth Bank brochures outlining part of theircredit policy.

Source: Commonwealth Bank. Credit Cards — Check Out Our Credit Card Advantages. Valid as at 10 May 2001.

Statement of the cost of credit: In accordance with section 158(1)(b) of the Consumer Credit Code, we make the following statement of the cost of credit for the purposes of section 140(3) of that Code:

As at 10 May 2001, the annual percentage rates for our standard credit cards are:

MasterCard/Visa/Bankcard 15.90%(up to 55 interest free days with an annual fee)

MasterCard/Visa/Bankcard 14.25%(no interest free days with no annual fee)

Fees and charges are payable.

The above annual percentage rates may change.

Please call us on 13 2221 from 8am to 8pm, Monday to Friday, or ask at any branch for our up-to-date rates.



Source: Commonwealth Bank. Credit Cards — Conditions of Use — Valid as at 04/01. Subject to change.

For the ‘No interest-free period’ option the interest charged on the outstanding amountof each purchase and cash advance is charged from the date of the purchase (or cash

Gold MasterCard, Visa GoldOn some Gold card accounts we may require a minimum payment each month whilst on others we may require a minimum payment once each six months.Monthly minimum paymentsIf a statement of your card account shows a closing balance of less than $25, the minimum payment is the closing balance.Otherwise, the minimum payment you must make is the greatest of:• the excess of the closing balance over the

credit limit on your card account;• 1.5% of the closing balance (rounded down

to the nearest dollar if the closing balance of your card account is $1,700 or more); or

• $25.

Find the minimum payment due for each of the following balances using the information supplied previously.a $23.40 b $1236.25 c $280.10 d $1560 with the credit limit being $1500

THINK WRITE

a Since the closing balance is under $25, it should be paid in full.

a As $23.40 < $25, the amount due = $23.40

b Since the closing balance is over $1000, calculate 2.5% of it.

b Amount due = 2.5% of $1236.25

= × 1236.25

= $30.91Round down to the nearest dollar. Rounded down to the nearest dollar, the

amount due is $30.c Since the closing balance is above $25

but below $1000, the minimum paymentis $25.

c $25 < $280.10 < $1000Therefore payment due = $25

d Since the closing balance is above $1000, calculate 2.5% of it and round down to the nearest dollar.

d 2.5% of $1560 = × 1560

= 39

Calculate the excess of the closing balance above the credit limit.

The excess of the closing balance above the credit limit = $1560 − $1500

= $60Select the greater of the two amounts. As $60 > $39, the amount due is $60.

1

2.5100---------

2

12.5100---------

2

3

9WORKEDExample



advance) and until the purchase (or cash advance) is repaid in full. The same is true forcash advances, obtained with ‘55 days interest-free period’ cards. An extract from theCommonwealth Bank brochure explains the procedure.

Source: Commonwealth Bank. Credit Cards — Conditions of Use — Valid as at 04/01.

No interest-free days cardsWe charge interest on the outstanding amount of each purchase, permitted transaction and cash advance from the date the purchase, permitted transaction or cash advance is debited to your card account until you repay the purchase, permitted transaction or cash advance.We calculate interest for a statement period in three steps:• first, we average the outstanding balances over the

statement period;• then we multiply the average by the daily percentage

rate applying to your card account; and• finally, we multiply the result we get from the prior step

by the number of days in the statement period.The result we get from the last step is the amount of interest we charge to your card account in the statement period.

When do we debit interest?We debit your card account on the last day of each statement period with the interest we calculated during that statement period up to and including that last day.

For a ‘no interest-free period’ credit card, calculate the interest charged on the average outstanding daily balance of $220 with the interest percentage rate of 13.95% p.a. if the statement covers a 30-day period.THINK WRITE

Calculate the daily percentage rate. Daily % rate =

=

= 0.038 22

Calculate the daily interest charged on the outstanding balance.

Interest = 220 ×

= 0.084 08Find the interest charged over the 30-day period and round-off to the nearest cent.

Total interest for 30 days= 0.084 08 × 30= 2.522 47= $2.52 (to the nearest cent)

1annual % rate

365---------------------------------

13.95365

-------------

20.038 22

100--------------------

3

10WORKEDExample


C h a p t e r 3 S p e n d i n g m o n e y 91For ‘up to 55 days interest free’ credit cards, no interest is charged if the amount is paidin full by the due date which is usually 25 days from the date of the statement. If the closingbalance is not repaid in full by the due date, the cardholder then temporarily loses theinterest-free option. The interest is usually charged on the outstanding balance from theday of the first purchase (that is, it is backdated!) until the outstanding balance is paid infull. Any purchases made before the balance is fully repaid are also added to the total. Sobasically if the balance is not paid in full by the due date, the card is effectively a ‘nointerest-free period’ card, but with the higher interest rate being applied.

For a ‘55 days interest free’ credit card, calculate the amount of interest charged on an outstanding balance of $450 which was repaid 10 days after the due date, given that the first purchase was made on the first day of the 30-day statement period and the annual percentage interest rate was 15%. (Assume that no other purchases were made after the end of the statement.)

THINK WRITE

Calculate the length of time for which the interest is charged, keeping in mind that it is charged from the date of the first purchase and until the balance was repaid.

The number of days from the first purchase to the last day of statement = 30 (as the purchase was made on the first day and the period covers 30 days).The number of days from the date of the state-ment to the due date = 25.The number of days from the due date to the date of actual payment = 10.Total days = 30 + 25 + 10 = 65

Calculate the daily interest rate. Daily interest rate =

= 0.041 096

Find the interest charged on $450 over the period of 65 days and round-off to the nearest cent.

Interest = $450 × × 65

= $12.02

1

215%365-----------

30.041 096

100-----------------------

11WORKEDExample

remember1. The two options for Visa, MasterCard or Bankcard are:

(a) no annual fee and no interest-free period(b) an annual fee and a specific interest-free period.

2. The bank requires a minimum monthly payment which is usually the greater of a certain fixed amount or a specific percentage of the closing balance.

3. For all transactions made with a ‘no interest-free period’ card and for cash advances obtained with an ‘up to 55 days interest-free period’ credit card, the interest is calculated from the date of the first purchase.

4. For interest-free period credit cards, if the closing balance is paid in full by the due date indicated on the statement, no interest is incurred. Otherwise, interest is charged until the balance is repaid.

remember



Credit cards

1 The XYZ Bank requires the minimum payment off credit card balances to be:(a) the closing balance if it is under $25, or (b) the greatest of:

ii(i) the excess of the closing balance over the credit limit, ori(ii) 2.5% of the closing balance (rounded down to the nearest dollar), or(iii) $25.Calculate the minimum payments on each of the following balances.

a $17.50 b $26.49c $147.42 d $785.00e $1326.12 f $2312.58g $3489.60 h $1954.00 with a limit of $1900i $2320.48 with a limit of $2300 j $3080.00 with a limit of $3000

2 For a ‘no interest-free period’ credit card, calculate the interest charged on an averageoutstanding daily balance of $430 with a percentage interest rate of 14.01% p.a. if thestatement covers a 30-day period.

3 An ‘up to 55 days interest free’ credit card holder used his card on 15 March to obtaina cash advance of $365, which he repaid on 20 March. What was the amount of interestcharged on the cash advance at the rate of 15.01% p.a.?

4 Here is some information extracted from a monthly credit card statement:Statement begins: 1 April; Statement ends: 30 April; Payment due date: 25 MayDate Transaction Details Amount03 Apr HBA 180.0008 Apr Myer Indooroopilly 89.0016 Apr Optus 252.2522 Apr Coles Fairfield 112.9030 Apr Sportsgirl City 69.95a Calculate the interest-free period for each of the above transactions.b Complete the following sentence: ‘To make full use of the “up to 55 days interest

free” option, the purchases should be made at the of the statementperiod’.

5 For a ‘55 days interest free’ credit card, calculate the amount of interest charged on anoutstanding balance of $625 which was repaid a fortnight after the due date, given thatthe first purchase was made on the first day of the 30-day period and the annualpercentage rate was 14.98%. (Assume that no other purchases were made after the endof the statement in question.)

6 Study the statement for the ‘55 days interest-free period’ credit card which follows andanswer these questions.a What is the length of the period of time covered by this statement?b What was the closing balance of the previous statement?

3EWORKEDExample

9

WORKEDExample

10

WORKEDExample

11


C h a p t e r 3 S p e n d i n g m o n e y 93c Did the payment of the previous statement balance incur any interest charges?

Explain your answer.d Explain how the minimum amount due was calculated.e Explain how the amount of available credit was calculated.

7 The closing balance for the statement in question 6 was repaid in full on 20 June. Findthe amount of interest charged, if:a no further purchases were made until that dateb a further $300 was spent on 31 May.

Date

29 Apr

30 Apr

3 May

8 Apr

4 May

4 May

5 May

Reference Number

74900052MENTAJ

89101123XYZ

FIZ3456ROGERDUTY

72345670J4U00ABCD

12345678GOODILUV

789108ABCD1234

7654321XYZWRST

MS ILA NORMAN32 BROWN STREETBUNDABERG Q 4670

MS ILA NORMAN

Transaction Details

Payment received - thank you

Interest charges

Goverment duties - last month

Travel Wide Melbau

Books & Musical World Carlton AU

SCUD Shoes Noble Park AU

Groovy Music Nth Mlbourne AU

Amount (A) $

22.10-

2.50

0.32

296.18

47.00

128.00

176.00

2345 6789 1234 9299

1 OF 1

2345 6789 1234 9299

$0.00 $22.10 + $650.00 - $22.10 + $650.00Overdue/Over limit Opening Balance

Available credit $350Credit limit $1000

Daily percentage rate .04136Annual percentage rate 15.100

New charges Payments/refunds Closing Balance

8 APRIL 2001

5 MAY 2001

30 MAY 2001

30 MAY 2001

SPECIMEN STATEMENT ONLY – USED FOR PURPOSE OF ILLUSTRATION. Valid as at 05/01.



TAXI

The exchange rateWhen Karla visits New Zealand she will not be able to use Australian currency (forexample to hire a taxi or buy food). She first has to convert Australian dollars (A$) toNew Zealand dollars (NZ$). How many NZ$ can she buy with one A$? This variesfrom day to day according to what is called the exchange rate. A table showingexchange rates for all major currencies is shown below.

Karla takes her Australian currency to a bank (preferably after prior arrangement)and they will sell her New Zealand dollars. Using the table above, we see that they willsell her NZ$1.2659 for every A$1 she hands over.

YOUR DOLLARBuying Selling

$1A eq: $ US .............................. 0.5885............. 0.5829$1A eq: £ Sterling ....................... 0.3897............. 0.3827$1A eq: Austrian schil. .................... 8.74................. 8.52$1A eq: $ Canada....................... 0.8691............. 0.8500$1A eq: Danish Krone................. 4.7340............. 4.8174$1A eq: EUR............................... 0.6346............. 0.6196$1A eq: $ Fiji ............................... 1.2483............. 1.1935$1A eq: Finland Markka.............. 3.7729............. 3.6852$1A eq: French franc .................. 4.1624............. 4.0657$1A eq: Ger. d-mark ................... 1.2412............. 1.2122$1A eq: Greek drachma.............. 213.92............. 208.59$1A eq: $ Hong Kong ................. 4.6236............. 4.5094$1A eq: India r’pee.................... On App............On App.$1A eq: Indonesia r/piah............. 5364.0............. 4885.0$1A eq: £ Ireland ........................ 0.4998............. 0.4881$1A eq: Italian lira ....................... 1229.0............. 1199.0$1A eq: Japan yen........................ 64.37............... 63.13$1A eq: Malay ringgit ................ On App............On App.$1A eq: New Taiwan $.................. 18.30.........................$1A eq: Dutch gilder ................... 1.3985............. 1.3658$1A eq: $ New Zealand .............. 1.2877............. 1.2659$1A eq: Norway kroner ............... 5.2129............. 5.0657$1A eq: Papua NG kina ............ On App.............. 1.3155$1A eq: Philippine peso ............ On App.............. 25.729$1A eq: $ Singapore ................... 1.0293............. 0.9940$1A eq: $ Solomons ................... 2.9599............. 2.6311$1A eq: Sth. Africa rand.............. 4.1083............. 4.0056$1A eq: Sth. Korea wan.............. 867.10.........................$1A eq: Spain pesetas................ 105.59............. 103.12$1A eq: Sri Lanka r’pee ............ On App................ 39.36$1A eq: Sweden krona ............... 5.3905............. 5.2594$1A eq: Swiss franc .................... 0.9836............. 0.9611$1A eq: Thailand baht................... 24.19............... 21.90$1A eq: Vanuatu valu ................... 80.22............... 77.27

If Karla exchanges A$400 for NZ$, how much will she get?

THINK WRITE

Use the selling price in the table. The bank will sell NZ$1.2659 for A$1Multiply by 400. A$400 is worth NZ$1.2659 × 400Write the answer. Karla will receive NZ$506.36

123

12WORKEDExample



The exchange rate

Use the table of exchange rates on page 94.1 Convert A$100 to each of the following currencies.

a US dollars b UK poundsc Italian lira d French francs

2 Convert each of these amounts to Australian dollars.a 220 US dollars b 320 UK poundsc 400 EUR (Euros) d 400 000 Indonesian rupiah

3 Angie plans to visit Tokyo on business. She changes A$800 into Japanese yen.a How much does she receive in yen?b If the trip is suddenly cancelled and she changes the yen she has back to A$, how

much will she have?c How much money has she lost because of this ‘double’ exchange?

4 Holly travels to Germany. She changes A$660 into German marks (deutschmarks,or DM).a How many German marks does she have?b When in Germany she spends DM 480. How many marks does she have left?c If she changes these back to Australian dollars, how much will she have?

5 During an economic crisis in 1998, Indonesia experienced severe inflation. In oneweek, on Monday, A$1 would have bought 9500 rupiah whereas on Thursday A$1would have bought 10 900 rupiah. On holidays in Indonesia at this time, Joelexchanged A$120 and paid for a camera on Monday. How much would he have savedif he had waited to make the transaction on Thursday (assuming the marked price didnot change).

If Karla exchanges NZ$350 for A$ when she returns, how much will she get?

THINK WRITE

Use the buying price in the table. The bank will buy NZ$1.2877 for A$1Divide 350 by 1.2877. NZ$350 is worth A$350 ÷ 1.2877Write the answer. Karla will receive A$271.80

123

13WORKEDExample

remember1. When you exchange A$ for other currencies the bank sells you the other

currency. Therefore:multiply by the selling price

2. When you exchange other currencies for A$ the bank buys the other currency from you. Therefore:

divide by the buying price

remember

3FWORKEDExample

12

WORKEDExample

13

WorkS

HEET 3.2


96


1

What are the two types of expenses in a budget?

2

Car insurance costs $440 per year. Write this expense as a weekly amount.

3

John’s after-tax pay is $1800 per fortnight. Express this as a yearly amount.

4

Consider the following readings of an electricity meter:June 44 500 kWhSeptember 47 610 kWhCalculate the electricity consumption for this quarter.

5

If credit card interest is calculated using an annual rate of 18%, what is the daily rateof interest that is charged?

6

What date is 55 days after March 10?

7

On a credit card statement, what does a figure of $540.65 in the ‘Closing Balance’mean?

8

When converting Australian dollars to other currency, which value should be used —buying or selling?

Questions

9

and

10

refer to the following:Buy Sell

Pounds sterling 0.3327 0.3127

9

Convert 25 Australian dollars to UK pounds.

10

Convert 50 UK pounds to Australian dollars.

2



Discount• Discount = Original price − Sale price

• Percentage discount =

• Sale price = Original price − percentage of the original price= (100 − percentage discount)% of the original price

Profit and loss• Profit = Sale price − Cost price

• Percentage profit =

• Loss = Cost price − Selling price

• Percentage loss =

Budgeting• A budget is a table containing an estimate of income and expenditure.• Expenses can be fixed and unavoidable, or variable.• Savings can be made by reducing variable expenses.• All entries in the budget table should be calculated for the same time period as the

budget itself (that is, weekly, monthly, quarterly or yearly).

Credit cards• For ‘Up to 55 days interest-free period’ cards, the closing balance should be paid in

full by the due date (usually 25 days from the date of the statement). Otherwise, interest is charged until the balance is repaid.

• For ‘No interest-free period’ cards, interest is calculated from the date of purchase and until the balance is repaid.

• The bank requires a minimum monthly payment. The amount is shown on the monthly statement.

Exchange rate• The rate at which international currencies may be exchanged varies on a daily

basis.• To change Australian dollars into another currency, multiply by the selling price.• To change a foreign currency into Australian dollars, divide by the buying price.

summaryDiscount

Original price--------------------------------- 100%×

ProfitCost price------------------------ 100%×

LossCost price------------------------ 100%×



1 If the original price of a ‘Patches’ doll is $40, determine its selling price after a discount of 12.5% is applied.

2 A pair of Italian-made shoes was discounted from $180 to $150. Calculate the percentage discount.

3 The price on a 5-piece cookware set is reduced by 15% to $212.50. What was the price of the set before the discount?

4 Copy and complete the following table.

5 If the cost price of a microwave is $210 and the percentage profit is 22%, what is its selling price?

6 Selling a damaged rug at $125 will incur 37.5% loss. What was the cost price of the rug?

ItemCost price

($)Percentage

discountDiscount

($)Selling price

($)

a 200 12%

b 150 142.50

c 98 9.80

d 16.25 113.75

e 20% 332.80

f 33 % 76

CHAPTERreview

3A

3A

3A

3A

13---

3B

3B


C h a p t e r 3 S p e n d i n g m o n e y 997 Calculate the percentage profit or loss for each of the following:

a a 3-piece lounge room suite: CP $1500, SP $2700b a 50-mL bottle of French perfume: CP $58, SP $130c last season’s dress: CP $40, SP $25d a damaged toy set: CP $18, SP $10.

8 Rose has listed her major expenses as follows:

a Prepare a weekly expenditure budget for Rose. (Put all amounts to the nearest dollar.)

b Calculate the approximate amount that she can save per year if her average weekly take home pay is $470.

9 Gas is charged at 0.6935c per megajoule (MJ) for the first 4000 MJ used and 0.8839c per MJ thereafter. Find the cost of using 6000 MJ (to the nearest cent).

Item Cost Period

Rent $434 Monthly

Electricity $130 Quarterly

Gas $60 Every 2 months

Phone $300 Quarterly

Car registration $420 Yearly

Car insurance $450 Yearly

Contents insurance $155 Yearly

Health insurance $40 Monthly

Food $100 Weekly

Sport $30 Weekly

Entertainment $20 Weekly

Clothes $120 Monthly

Holidays $1200 Yearly

3B

3C

3D


100


10

An electricity bill consists of a charge for consumed electricity and the service-to-property charge. The rates for consumption are $0.1186 for the first 1020 kWh and $0.125 per kWh thereafter. The service charge is constant at $35. Calculate the total charge if the current reading of the meter shows 56 230 while the previous reading was 53 250.

11

The minimum balance owing on a credit card account is taken to be the larger of $25 or 2.5% of the balance owing, or the excess of the closing balance over a credit limit. If the closing balance was $1440 with a credit limit of $1400, determine the minimum balance due.

12

An ‘up to 55 days interest-free period’ credit card was used for purchases which after the 30-day interval totalled $1400.

a

Find the minimum amount due if the current credit limit on this card is $2000 and the bank requires the largest of $25, 2.5% of the outstanding balance or the excess above the credit limit.

b

If the balance was paid 10 days after the due date (which was 25 days from the statement date), what was the interest at 16% p.a. from the start of the 30-day interval?

13

Ben is in a difficult situation. He needs to convert US$100 to UK pounds and the only way this can be done is to convert the US$ to A$ and then change the A$ to UK pounds. What amount will he have in UK pounds? Use the table on page 94.

3D

3E

3E

testtest

CHAPTERyyourselfourself

testyyourselfourself

3

3F

MQ Maths A Yr 11 - 03 Page 100 Monday, September 24, 2001 7:12 AM

Economy & Finance

Maths A - Chapter 3