Maths Year 11A CH 3 - Maths Quest Maths A Year 11 For Queensland

5_61_08071_MQA11Qld2E Ch03 Page 65 Monday, July 14, 2008 3:01 PM
Spending
money
3
syllabus ref
efer
erence
ence
Strand:
Financial mathematics
Core topic:
Managing money 1
• Spending money
In this cha
chapter
pter
3A Discount
3B Profit and loss
3C Budgeting
3D Cost of services
3E Credit cards
3F The exchange rate
66 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 fort-
nightly pay of $985 was deposited into her bank
account on Friday, 24 January. Less than two weeks
later her account balance was $28. Karla could not
believe that she had spent over $950. Where did it
all go? She sat down and wrote out all the things
she had spent money on, and how she had parted
with it. Much had been spent at retail stores buying
groceries, clothes, books and CDs. She had paid for
her purchases in cash. Perhaps,
she thought, she should get a
credit card, but she found that
there were service charges for
credit cards, as well as interest.
Perhaps she could buy more
when there were discounts. She
wondered whether she should
have a budget. Clearly, she
needed a better understanding of
the details of handling her hard-
earned money, or it was just
going to leak away.
Discounts, credit card charges, the costs of ser-
vices and budgeting are topics that affect us all and,
like Karla, we owe it to ourselves to understand how these work so that we can make
the best use of our money.
These and other related topics will be discussed in the following sections of this
chapter.
1 Calculate 7.5% of $450.

eBook plus
2 Increase $220 by 8%.
Digital docs:
SkillSHEET 3.1 3 Reduce $360 by 15%.
Finding a percentage of a
quantity
4 After receiving a pay rise
SkillSHEET 3.2
Increase or decrease by a of 10%, Jaime’s wage was
percentage $396. What was her wage
SkillSHEET 3.3 before the pay rise?
Ratio
5 Fifty-five litres of
detergent cost $66. What
will sixty litres of
detergent cost?
Chapter 3 Spending money 67

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. If
expressed as a percentage of the original price, it is called a percentage discount.
Discount = Original price − Sale price
Discount
Percentage discount = --------------------------------- × 100%
Original price
WORKED Example 1
A vacuum cleaner is discounted from $180
to $126. Find the percentage discount.
THINK WRITE
1 Find the discount in dollars. Discount = Original price − Sale price
= $180 − $126
= $54
Discount
2 Write the formula for the percentage % discount = --------------------------------- × 100%
discount. Original price
54
3 Substitute the values of the discount % discount = --------- × 100%
and the original price into the formula 180
and evaluate. = 30%
4 Write the answer. The vacuum cleaner was discounted by 30%.
When the original price and the percentage discount are known, there are two methods
of 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 find
the discount in dollars and hence the sale price, use method 1. If the actual amount of a
discount is not needed, use method 2 (which gives the sale price straight away).
WORKED Example 2
Find the sale price on a $42 kettle after a 12.5% discount has been applied.
THINK WRITE
Method 1
1 Find the discount in dollars. Discount = 12.5% of $42
12.5
= ---------- × 42
100
= $5.25
2 Find the sale price by subtracting the Sale price = Original price − Discount
discount amount from the original = $42 − $5.25
price. = $36.75
Method 2
1 Express the sale price as a percentage Original price = 100%, Discount = 12.5%
of the original price. Sale price = 100% − 12.5%
= 87.5%
2 Find the sale price in dollars. Sale price = 87.5% of the original price
87.5
= ---------- × 42
100
= $36.75
Sometimes we are given a discount and the sale price and need to find the original
price, as shown in the following example.
WORKED Example 3
After a 20% discount, a kilogram of scotch fillet steak costs $16.00. Find the original price
and the amount of money saved per kilogram.
THINK WRITE
1 Identify the unknown. Let the original price be x.
2 Express the sale price as a percentage Original price = 100%, Discount = 20%
of the original price in terms of x. Sale price = Original price − Discount
= 100% − 20%
= 80%
So sale price = 0.8x
3 Form an equation by equating an 0.8x = $16.00
expression for the sale price with the x = $16.00 ÷ 0.8
sale price in dollars and solve for x. = $20.00
4 Find the amount saved. Amount saved = Original price − Sale price
= $20.00 − $16.00
= $4.00
5 Write the answer. The price of 1 kg of scotch fillet steak before
the sale was $20.00. The amount of money
saved per 1 kg is $4.00.

remember
remember
1. Discount = Original price − Sale price
Discount
2. Percentage discount = --------------------------------- × 100%
Original price
3. Sale price = Original price − percentage of the original price
= (100% − percentage discount) of the original price
3A Discount
WORKED 1 Find the percentage discount for each of the following items.
Example
1 a A dress, discounted from $80 to $60
b A watch, discounted from $365 to $185
eBook plus c A clock, discounted from $47 to $34
d A lamp, discounted from $59 to $42
Digital doc:
SkillSHEET 3.4
e A coffee table, discounted from $270 to $239
Expressing one f A set of kitchen knives, discounted from $49 to $36
quantity as a
percentage of another g A cordless phone, discounted from $119 to $89
h A tablecloth, discounted from $25 to $18
i A bookshelf, discounted from $70 to $63
j A scientific calculator, discounted from $30 to $24
2 Below are some items from a Home Shopper direct marketing brochure.
a b
MAGIC BLENDER SANDWICH TOASTER

Blends drinks, sauces, grinds coffee, Toasted sandwiches to go, Easy clean.
chops nuts. 12 Month Warranty. 12 Month Warranty.
Retail $69.95 Retail $59.95
HOME SHOPPER’S PRICE $59.90 HOME SHOPPER’S PRICE $47.00
c d
TEFLON–BASED IRON RETRO–TOASTER

Light weight, easy glide iron. Your choice of colours, automatic
12 Month Warranty. variable control. 12 Month Warranty.
Retail $99.95 Retail $49.95
HOME SHOPPER’S PRICE $78.95 HOME SHOPPER’S PRICE $42.50
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 direct
ii the percentage discount.
3 This advertising brochure states that all man-

chester (sheets and towels) is discounted by
up to 30%. Find the real percentage discount
for each item. Comment on your findings.
a Single sheets
b Double sheets
c Queen sheets
d Single quilt cover
e Double quilt cover
f Queen quilt cover
g King quilt cover
4 Healthway is promoting sav-

ings in its health and beauty Health & beauty
products.
For each of the items shown COSTS LESS at Healthway
at right, find:
i the original price Delig
& ht
Delight
Brigh
a
HAI
R
b c
CO
t
ii the percentage discount.
LO
Delight Condtio
UR
Delight $
& ner
399 957
Bright
Shampoo
545
$ Save $ Save
200ml 1.00 46c
Save up to 99c
Hair Colour Varieties Hand cream
Vitamin d Multi e Horseradish f

C V it a m in & G a r lic
399 1499 7 49 86c
$ Save $ Save $ Save
66c 2.00
100s 75s 50s
WORKED 5 Copy and complete the following table.

Example
2
Original Sale
price Discount Discount price
Item ($) (%) ($) ($)
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 1--3- %
g Washing machine 564 25%
h Car 7500 50%


6 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 bought
a 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 clothes
b the amount she had to pay after the 15% discount was applied
c the amount of money Elena was able to save on these purchases by shopping on
that day.
7 multiple choice
The calculation that could not be used to find the sale price of a $64 item after a
discount of 12.5% is:
12.5 × 64 12.5 × 64 87.5 × 64
A ---------------------- B 64 – ---------------------- C ----------------------
100 100 100
D 7
--- of 64 E 64 − 1
--- × 64
8 8
8 multiple choice
The ring that will cost $78 after a discount of 33 1--- % is:
3
A a friendship ring, normally $104
B a mother of pearl ring, normally $130
C a sapphire ring, normally $260
D a Russian band ring, normally $117
E a ruby ring, normally $234
WORKED 9 After a discount of 15%, a jar of Kenya Gold coffee costs $10.15. Find:
Example
3
a the original price
b the amount saved on each jar.
10 A Byer shareholder has a special card which allows a 5% discount on any purchase
made 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 prices
of all items in the store by 12.5%. She calculated the new prices and attached new tags
to 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 would
need them again. She decided to add 12.5% to the sale prices. If the shop assistant
proceeds in this manner, will she get back to the original prices? Explain your answer.
Profit and loss

When an item is sold for more than it cost, the difference is said to be profit. It is
customary to express profit as a percentage of the cost price:
Profit = Selling price − Cost price
Profit
Percentage profit = ------------------------ × 100%
Cost price
Loss = Cost price − Selling price
Loss
Percentage loss = ------------------------ × 100%
Cost price
WORKED Example 4
Find the percentage profit on an item that was bought for $30 and later sold for $38.
THINK WRITE
1 Identify the cost price (CP) and the selling CP = $30; SP = $38
price (SP).
2 Write the formula for the profit. Profit = SP − CP
(SP > CP)
3 Substitute the values of CP and SP into the Profit = $38 − $30
formula and evaluate. = $8
Profit
4 Write the formula for the percentage profit. Percentage profit = ------------- × 100%
CP
8
5 Substitute the values of profit and CP into the Percentage profit = ------ × 100%
formula and evaluate. 30
= 26.67%
WORKED Example 5
Find the percentage loss if an item was bought for $220 and sold later for $180.
THINK WRITE
1 Identify the cost price (CP) and the selling CP = $220; SP = $180
price (SP).
2 Write the formula for the loss. Loss = CP − SP
(SP < CP)
3 Substitute the values of CP and SP into the Loss = $220 − $180
formula and evaluate. = $40
Loss
4 Write the formula for the percentage loss. Percentage loss = ----------- × 100%
CP
40
5 Substitute the values of the loss and CP into = --------- × 100%
the formula and evaluate. 220
= 18.18%
When the cost price and percentage profit/loss are known and we need to find the
selling price, there are two methods that can be used (see the following example).

WORKED Example 6
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 1
1 Find the profit in dollars. Profit = 20% of CP
= 20% of $22
20
= --------- × 22
100
= $4.40
2 Find the selling price by adding the SP = CP + Profit
profit to the cost price. = $22 + $4.40
= $26.40
Method 2
1 Treating the cost price as 100%, CP = 100%; profit = 20%
express the selling price as a percentage SP = (100 + 20)%
of the CP. = 120% of CP
2 Substitute the values of the CP and SP = 120% of $22
substitute. 120
= --------- × 22
100
= $26.40
Finally, there are cases when the selling price and the percentage profit (or loss) are
known and we need to find the CP. The next example shows how to deal with such
problems.
WORKED Example 7
A retailer sells a TV set for $732, making herself a profit of 22%. Find the wholesale price
of the TV set.
THINK WRITE
1 Identify the unknown. Let the CP be x.
2 Express the SP as a percentage of the CP CP = 100%
in terms of x. Profit = 22%
SP = (100 + 22)% = 122%
So SP = 122% of CP
= 1.22 × CP
= 1.22x
3 Form an equation by making the expression 1.22x = 732
for the selling price equal to $732.
4 Solve for x. x = 732 ÷ 1.22
x = 600
5 Write the answer. The wholesale price of the TV set was $600.
remember
remember
1. Profit = Selling price (SP) − cost price (CP)
Profit
2. Percentage profit = ------------- × 100%
CP
3. Loss = CP − SP
Loss
4. Percentage loss = ----------- × 100%
CP
3B Profit and loss

WORKED 1 Find the percentage profit (to 2 decimal places) for each of the following items.
Example
4 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

WORKED 2 The following goods were sold at a garage sale. Find the percentage loss for each of the
Example
items, correct to 2 decimal places.
5
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 60 2.50
by Sydney Sheldon
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 he
purchased 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 a
percentage of the cost price.
WORKED 5 A shopkeeper at the Southbank Markets
Example
6
buys sheepskin moccasins from the
wholesaler at the following prices: chil-
dren’s sizes — $12 per pair; adults’
sizes — $17 per pair, and extra-large
sizes — $19 per pair. If the shopkeeper
wants to make a 20% profit, what should be
the sale price for each type?
6 Michael buys a car for $12 000. It depreciates
at a rate of $900 per year. If Michael wants his
losses to be no more than 30% of the cost price,
after how many years from the purchase does
he have to sell the car?
WORKED 7 By selling a collection of coins for $177, Igor
Example
7
makes a profit of 18%. What was the original
cost of the collection?
8 A retailer has purchased a particular style of
jumper which is proving to be unpopular. After
attempting 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 the
wholesale price of each jumper if the retailer suf-
fers a 40% loss.
1
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 cost
of 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 to
make 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 each
sale. 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
percentage profit.
9 P-Mart make 30% on all their sales. If they pay $600 for a dining suite, what price
should 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 on
the buying price. What did he pay for the restaurant originally?
t i gat
es Dealing in diaries
io
ion v
in
n inv
t i gat
es 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.

Budgeting
Karla wants to go to New Zealand for her holidays next year;
but if she saves only $28 each pay, she will certainly not
have enough money to go. Although she is to receive a pay
rise, she realises that she still does not know how much
she will need to save. She understands that a budget will
help her, so decides to look into the principles of
budgeting in more detail.
A budget is a table containing an estimate of income
and expenditure. A personal (or family) budget can help
you to:
1. ensure that you do not spend more than you earn
2. estimate the amount of money that you can save
3. control your expenses and perhaps cut some of them
in order to save more
4. decide what you can and what you can’t afford.
A personal budget helps you to make various financial
decisions. The expenses in the personal (or family) budget can
be divided into two major categories: fixed (or unavoidable) expenses and variable
expenses. 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. Variable
expenses include food, entertainment, clothing and other items that can be controlled or
varied. To reduce your expenses in order to save more money, you would look at
reducing your variable expenses.
A weekly, monthly or yearly budget can be prepared. Expenses may be calculated
weekly (such as food), monthly (health insurance), quarterly (electricity bills) or yearly
(car registration). Depending on the budget duration, all expenses should be converted to
weekly, monthly or yearly amounts. The following table of conversion will help you in
preparing a budget.
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
We need to understand that budgets give us only an approximation of the real-life

situation, as they are based on estimates and do not include unexpected expenses.
WORKED Example 8
Karla’s monthly budget.
Income Expenses
Salary after tax $2050 Rent of 1-bedroom flat $520
Dividends from shares $23 Electricity $70
Phone $40
Health insurance $30
House contents insurance $10
Car registration $27
Car insurance $42
Petrol $35
Food $110
Clothing $150
Entertainment $150
Sport $100
Miscellaneous $40
Total: $2073 Total: $1324
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.
THINK WRITE
a Identify the fixed expenses and add them a Fixed expenses:
up. Rent $520
House contents insurance $10
Car insurance $42
Total = 520 + 30 + 10 + 27 + 42 = $629
b Calculate the total of variable expenses b Total of variable expenses
by subtracting fixed expenses from the = total expenses − total of fixed expenses
total. = 1324 − 629
= $695
c Calculate monthly savings by c Monthly savings
subtracting expenses from the income. = monthly income − monthly expenses
= 2073 − 1324
= $749
THINK WRITE
d Calculate the number of months required d To save $3500 at the rate of $749 per month:
to save for the holiday. 3500 ÷ 749 = 4.67 or approximately
5 months
e 1 Identify the number of months e To save one month sooner than
within which the money is to be calculated in part d means 5 − 1 = 4
saved. months
2 Calculate the amount required to be Monthly savings needed = 3500 ÷ 4
saved monthly. Monthly savings needed = $875
3 Calculate the extra amount which is Extra monthly savings needed
to be saved per month. = $875 − $749
= $126
4 Suggest cuts in variable expenses. Cuts could be made as follows:
Phone bills: cut from $40 to $30
gives $10
Clothing: cut from $150 to $80 gives
$70
Entertainment: cut from $150 to
$104 gives $46
This gives 10 + 70 + 46 = $126, which is
the required extra saving.
t i gat
es The Australian budget
io
ion v
in
n inv
t i gat
es Budgets 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?
remember
remember
1. 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.
3C Budgeting
WORKED 1 The table below shows the monthly budget for a couple with one school-aged child.
Example
8
Income Expenses
Combined monthly salary Mortgage repayments $1100

after tax $3800 Rates $75
Building insurance $20
Contents insurance $15
Electricity $120
Gas $25
Telephone $50
Car insurance $50
School fees $110
Food $300
Clothing $60
Entertainment $70
Sport $75
Miscellaneous $40
Household needs and repairs $20
Petrol $125
Total: $3800 Total: $2350
Use the table to calculate the following:

a the total of fixed expenses
b the total of variable expenses
c the total monthly savings
d 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 pays
her parents $70 per week for board and food; a monthly ticket for public transport costs
her $80; she spends on average $45 a month on books and stationery; her single health
insurance premium is $68.55 a month; entertainment and snacks cost her about $90 a
month; the university enrolment fee takes $900 a year and she also needs clothes and
accessories which cost approximately $80 per month.
a Prepare a monthly budget if the student’s income consists of Austudy (which is
$355.40 per fortnight) plus birthday and Christmas presents ($250 a year).
b Calculate the amount of money that she can save per month.

4 Using the figures in the table below, prepare
eBook plus an expenditure side of a weekly budget.
Digital doc:
SkillSHEET 3.5
Item Cost and period
Converting units of
time 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
Petrol $50 per week
Health insurance $175 per 3 months
Contents insurance $125 per year
Clothes $100 per month
Entertainment $80 per month
5 The student in question 3 is offered a part-time job in the university cafeteria, where
she will be able to earn $116 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
$70 per week that she is paying to her parents in board and food, but she will have
to 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 the
new job can the student afford to move out of home? Support your answer with
appropriate calculations.
6 Prepare your personal monthly budget (or your family budget if you do not have any
income). 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 income
will come from three sources: a government subsidy of $4200; annual membership fees
of $25 per person and profits from the various events. They estimate that the auction
will 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 will
be 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 a
year; 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 unexpected
eBook plus expenses, the rest of the money will be spent on charity.
a Prepare a yearly budget for the welfare group.
Digital doc: b Calculate the amount of money left to use for charity.
WorkSHEET 3.1
c Express your answer to b as a percentage of the annual income.
t i gat
es The club’s end-of-season break-up
io
ion v
in
n inv
t i gat
es Work 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%.
Cost of services
An important part of being able to prepare a personal budget is to understand how
various 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 a
telephone.
3D Cost of services
Study the electricity bill shown below and answer the following questions.
1 a If the bill is paid by 10 April, what amount is owing?

b If the bill is paid after 10 April, what amount is owing?
c What is the discount as a percentage?
2 a How does using electricity produce greenhouse gases?
b What amount of greenhouse gas is produced when 10 kWh of electricity is used?
c On average, what amount of greenhouse gas has been produced by the Sample
family, per month, during the period October 2007 to March 2008?
3 In January, the Sample family installed an air-conditioner. This device used energy at
a rate of 3.5 kWh per hour. That is, if it ran for 1 hour it would consume 3.5 kWh of
electricity.
For the month of January,

a estimate the number of hours for which the air-conditioner was operating
b what extra cost did this incur if electricity is charged at $0.1405 per kWh?
4 Study the gas bill shown below for the April quarter, and answer the following questions.
a What is the value of the bill?

b How does this bill compare with last quarter’s?
c What is the average daily cost of gas consumption?
d What would you estimate the yearly cost of gas consumption to be?
e If Sam is to make a monthly budget, how much should he allow for gas?
f Which quarter over the past year shows the highest greenhouse gas emissions?
What is this amount?

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 is
calculated indirectly from the meter readings. A correction factor and a heating value
are used to convert the meter readings to megajoules.
a What is the difference between the meter readings?
b Explain how the consumption, in megajoules, is calculated from the difference
between meter readings.
c What is the supply charge for 90 days? What is this as a rate per day?
d What is the cost of gas as a rate in cents per megajoule?
e Using the cost-of-gas rate given in the bill, calculate the cost of 6000 MJ
(excluding GST and other charges).
f How is the third party charge of $5.67 calculated?
6 In the October quarter last year, the
average daily consumption of gas
was 50 MJ. If there were 92 days in
this quarter, calculate the:
a total gas consumption for the
quarter
b total cost of this gas (excluding
GST and other charges)
c supply charge and third party
charge
d total gas charges, including the
supply charge, the third party
charge and GST.
7 In the January quarter last year
the average daily consumption of
gas was 42 MJ. If there were 91
days in this quarter, determine
the total gas charges for this
quarter, including the supply
charge, the third party charge
and 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 by 1st February?

b What amount is to be paid, if the bill is paid after 1st February?
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 was used during the measurement period?

b What is the cost of water consumption?
c What is the value of the water access charge?
d Calculate the total water charges for the period.
e Estimate how much water would be used in a year.
10 If Mr Ratepayer’s water readings were 2178 to 2245 instead, calculate his water bill
for the period. Include the water access charge.
11 If the Average Rateable Value (ARV) increased from $280 000 to $310 000, what
increase would this result in for:
a the General Rates charges?
b the Environmental Management and Compliance Levy?
c the total rates bill?
Questions 12 and 13 refer to the telephone bill issued by Optus shown below.
12 a How many local calls were made during this period?
b How many calls to mobile phones were made during this period?
c If an extra 42 local calls were made during the period, how much would this have
added to the total bill?
13 a In the summary-of-charges section,

$2 was included under ‘Other
charges and credits’. Why is this
amount charged?
b The Line rental/Network access cost
of the Optus Fusion $69 plan is
$62.73. Why is it not $69?
c The phone plan is called the Optus
Fusion $69 plan and it costs $71.20.
Why is it not $69?
Credit cards
Karla has decided that it is time for her to obtain a credit card.
A credit card will allow her to purchase goods and services without paying for them
on the spot. They can also be used for obtaining cash advances, paying bills and
making purchases over the phone or on the Internet.
Common credit cards used in Australia include MasterCard, Visa, Diners Club and
American Express.
When applying for a MasterCard or Visa, a customer is given a choice of having
either an interest-free period (usually up to 55 days) for a small annual fee (around
$30), or no fee payable and no interest-free period (with the interest rate usually being
lower for the second 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. Upon receiving a monthly statement, a customer may decide to pay
the bank in full by the due date indicated on the statement and hence not have to pay
any interest with an interest-free period card. Alternatively, the customer may choose to
make the minimum payment only. In this case interest will be charged on the unpaid
balance. The minimum payment is usually a certain percentage of the unpaid balance
or a certain fixed amount — whichever is larger. Variations in interest rates occur from
time to time and cardholders are notified of these changes in advance.
Annual rates
As of 1 May 2008, the annual
percentage rates for the
Commonwealth Bank’s
standard credit cards have been:
• 19.64% for MasterCard and
Visa (up to 55 interest-free
days with an annual fee)
• 18.24% for MasterCard and
Visa (no interest-free days with
no annual fee).
Minimum payments
For the examples and exercises in this
chapter, minimum credit card account
payments are calculated as follows.
Balance less than $25
If the closing balance of the statement
is less than $25, then the minimum
payment is the same as the closing
balance.
Balance more than $25
Where the closing balance is greater than $25, the payment
to be made is the greater of:
1. $25, or
2. 2% of the closing balance (rounded down to the nearest dollar).
This means that the payment is 2% of the closing balance if the balance exceeds $1250.
Note: If the closing balance is greater than the credit limit of the card, then the
minimum payment must also include the excess of the balance over the credit limit.

WORKED Example 9
Find the minimum payment due for each of the following balances using the information
supplied previously.
a $23.40 b $1836.25 c $280.10 d $1960 with the credit limit being $1900
THINK WRITE
a Since the closing balance is under $25, it a As $23.40 < $25,
should be paid in full. the amount due = $23.40.
b 1 Since the closing balance is over b Amount due = 2% of $1836.25
$1250, calculate 2% of it. 2
= --------- × 1836.25
100
= $36.73
2 Round down to the nearest dollar. Rounded down to the nearest dollar, the
amount due is $36.
c Since the closing balance is above $25 c $25 < $280.10 < $1250
but below $1250, the minimum payment Therefore payment due = $25
is $25.
2
d 1 Since the closing balance is above d 2% of $1960 = --------- × 1960
$1250, calculate 2% of it and round 100
= 39.20
down to the nearest dollar.
Rounded amount is $39.
2 Calculate the excess of the closing The excess of the closing balance above
balance above the credit limit. the credit limit = $1960 − $1900
= $60
3 Add the two amounts. 39 + 60 = 99. The amount due is $99.
For the ‘no interest-free period’ option the interest charged on the outstanding amount
of each purchase and cash advance is charged from the date of the purchase (or cash
advance) and until the purchase (or cash advance) is repaid in full. The same is true for
cash advances, obtained with ‘55 days interest-free period’ cards. An extract from the
Commonwealth Bank brochure explains the procedure.
No interest-free days cards • then we multiply the average by the daily percentage
We charge interest on the outstanding amount of each rate applying to your card account; and
purchase, permitted transaction and cash advance • finally, we multiply the result we get from the prior step
from the date the purchase, permitted transaction or by the number of days in the statement period.
cash advance is debited to your card account until you The result we get from the last step is the amount of
repay the purchase, permitted transaction or cash interest we charge to your card account in the
advance. statement period.
We calculate interest for a statement period in three When do we debit interest?
steps: We debit your card account on the last day of each
• first, we average the outstanding balances over the statement period with the interest we calculated during
statement period; that statement period up to and including that last day.
Source: Commonwealth Bank. Credit Cards — Conditions of Use

WORKED Example 10
For a ‘no interest-free period’ credit card, calculate the interest charged on the average
outstanding daily balance of $220 with the interest rate of 18.24% p.a. if the statement
covers a 30-day period.
THINK WRITE
annual interest rate
1 Calculate the daily percentage Daily interest rate = ---------------------------------------------
rate. 365
18.24
= -------------
365
= 0.04997%
0.04997
2 Calculate the daily interest Interest = 220 × -------------------
charged on the outstanding 100
= 0.10993
balance.
3 Find the interest charged over the Total interest for 30 days
30-day period and round to the = 0.10993 × 30
nearest cent. = 3.2979
= $3.30 (to the nearest cent)
For ‘up to 55 days interest free’ credit cards, no interest is charged if the amount is paid
in full by the due date, which is usually 25 days from the date of the statement. If the
closing balance is not repaid in full by the due date, the cardholder then temporarily loses
the interest-free option. The interest is usually charged on the outstanding balance from
the day of the first purchase (that is, it is backdated!) until the outstanding balance is paid
in full. Any purchases made before the balance is fully repaid are also added to the total.
Thus, if the balance is not paid in full by the due date, the card is effectively a ‘no interest-
free period’ card, but with the higher interest rate being applied.
WORKED Example 11
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 16.90%. (Assume that no other purchases were made after the
end of the statement.)
THINK WRITE
1 Calculate the length of time for The number of days from the first purchase to the last
which the interest is charged, day of statement = 30 (as the purchase was made on
keeping in mind that it is charged the first day and the period covers 30 days).
from the date of the first purchase The number of days from the date of the statement to
and until the balance was repaid. 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

THINK WRITE
16.90%
2 Calculate the daily interest rate. Daily interest rate = -------------------
365
= 0.046 301%
0.046 301
3 Find the interest charged on $450 over Interest = $450 × ----------------------- × 65
the period of 65 days and round to the 100
= $13.54
nearest cent.
WORKED Example 12
Kerry has a credit card with an interest-free period, and interest is then charged on the
outstanding balance at a rate of 18% p.a. Kerry pays a $1200 bill for her council rates on
her credit card.
a Kerry pays $600 off her credit card by the due date. What is the outstanding balance on
the card?
b Calculate the interest Kerry must then pay for the second month.
c An alternative credit card charges 12% p.a. interest with no interest-free period.
Calculate the interest that Kerry would have been charged on the first month.
d Calculate the balance owing after Kerry pays $600 the first month, and then calculate
the interest for the second month.
e Which credit card would be the cheapest to use for this bill?
THINK WRITE
a Subtract the repayment from the a Balance owing = $1200 − $600
balance. = $600
600 × 18 × ----- 1
-
b Use the simple interest formula to b Interest = -------------------------------
12
-
calculate one month’s interest. 100
= $9.00
1200 × 12 × ----- 1
-
c Use the simple interest formula to c Interest = -----------------------------------
12
calculate the first month’s interest. 100

= $12.00
d 1 Add the interest to the amount of the d Balance owing = $1200 + $12 − $600
bill and subtract the repayment. = $612
612 × 12 × ----- 1
-
2 Use the simple interest formula to Interest = -------------------------------
12
-
calculate the second month’s 100
interest. = $6.12
e Add the two months of interest together e The interest on the second card is $18.12;
for the second card and compare with therefore, the card with the interest-free
the interest for the first card. period is cheaper in this case.
Debit cards
Next time you are waiting in the queue to pay
at the supermarket, petrol station or department
store, notice how many people pay by using
EFTPOS. For purchases valued over twenty
dollars, few people use cash. The two most
common methods are using credit cards or
cards attached to savings accounts. Both have
the advantage that we do not need to carry
around large amounts of cash and change. Each
of these has its advantages and disadvantages.
The savings account allows you to spend only
money that you already have, whereas the
credit card lets you spend now and pay in the
future. If you (the ‘operator’ of the card) have
good self-discipline, and pay the credit card
promptly when it is due, then all is well. How-
ever, operators who do not have self-discipline
quickly find themselves in trouble. Credit cards
can be used in situations where a savings card
cannot be used directly — such as when
making phone payments or securing bookings.
A compromise between these two types of card is called the debit card, and its popu-
larity is increasing. This card looks and operates like a credit card but any payments it
makes come directly from a savings account. In other words, although debit cards
operate like credit cards, they allow operators to spend money only if they actually
have it.
The costs associated with a debit card are similar to those of a savings card.
remember
remember
1. A credit card is a source of an instant loan to the cardholder.
2. The two options for Visa and MasterCard are:
(a) no annual fee and no interest-free period
(b) an annual fee and a specific interest-free period.
3. The bank requires a minimum monthly payment that is usually the greater of
a certain fixed amount or a specific percentage of the closing balance.
4. 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.
5. 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.
6. A debit card allows you to spend money without carrying cash with you.
Payments come directly from a savings account; that is, from money the user
actually has.
3E Credit cards
WORKED 1 The XYZ Bank requires the minimum payment off credit card balances to be:
Example
9
(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, or
i(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 $26.49
c $147.42 d $785.00
e $1326.12 f $2312.58
g $3489.60 h $1954.00 with a limit of $1900
i $2320.48 with a limit of $2300 j $3080.00 with a limit of $3000
WORKED 2 For a ‘no interest-free period’ credit card, calculate the interest charged on an average
Example
10
outstanding daily balance of $430 with a percentage interest rate of 18.24% p.a. if the
statement covers a 30-day period.
3 An ‘up to 55 days interest free’ credit card holder used his card on 15 March to obtain
a cash advance of $365, which he repaid on 20 March. What was the amount of interest
charged on the cash advance at the rate of 20.74% 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 May
Date Transaction Details Amount

03 Apr HBA 180.00
08 Apr Myer Indooroopilly 89.00
16 Apr Optus 252.25
22 Apr Coles Fairfield 112.90
30 Apr Sportsgirl City 69.95
a 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 statement period’.
WORKED 5 For a ‘55 days interest free’ credit card, calculate the amount of interest charged on an
Example
11
outstanding balance of $625 which was repaid a fortnight after the due date, given that
the first purchase was made on the first day of the 30-day period and the annual
percentage rate was 16.90%. (Assume that no other purchases were made after the end
of the statement in question.)
6 Study the statement for the ‘55 days interest-free period’ credit card which follows and
answer 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?
c Show how the daily percentage rate is calculated from the annual percentage rate.
d Explain how the minimum amount due was calculated.
e Explain how the amount of available credit was calculated.
2008
2008
1 OF 1
Mr John Citizen
123 Sample st 2345 6789 1234 9299
Sampleville QLD 4444
2008
Overdue/Over limit Opening Balance New charges Payments/refunds Closing Balance

$0.00 $22.10 + $650.00 - $22.10 + $650.00
Date Reference Number Transaction Details Amount (A) $

29 Apr 74900052MENTAJ Payment received - thank you 22.10-
30 Apr 89101123XYZ Interest charges 2.50
3 May FIZ3456ROGERDUTY Government duties - last month 0.32
8 Apr 72345670J4U00ABCD Travel Wide Melbau 296.18
4 May 12345678GOODILUV Books & Musical World Carlton AU 47.00
4 May 789108ABCD1234 SCUD Shoes Noble Park AU 128.00
5 May 7654321XYZWRST Groovy Music Nth Mlbourne AU 176.00
SPECIMEN STATEMENT ONLY – USED FOR PURPOSE OF ILLUSTRATION

Valid as At 05/2008.
Credit limit $1000 Annual percentage rate 16.90

Available credit $350 Daily percentage rate .04630
2345 6789 1234 9299
2008
MR JOHN CITIZEN
7 The closing balance for the statement in question 6 was repaid in full on 20 June. Find
the amount of interest charged, if:
a no further purchases were made until that date
b a further $300 was spent on 31 May.

WORKED 8 Kai has two credit cards. One has an interest-free period, and interest is then charged
Example
on the outstanding balance at a rate of 18% p.a. The other has no interest-free period,
12
but interest is added from the date of purchase at a rate of 14% p.a. Kai has $1500
worth of bills to pay in the coming month and intends to use one of the cards to pay
them. Kai intends to then pay the balance off in monthly instalments of $500.
a If Kai uses the card with the interest-free period and pays $500 by the due date,
what is the outstanding balance on the card?
b Calculate the interest Kai must then pay for the second month.
c Calculate the balance owing at the end of the second month and the balance owing
at the end of the third month, at which time Kai pays off the entire balance.
d Calculate the interest payable in the first month if Kai uses the card without the
interest-free period.
e Calculate the balance owing after Kai pays $500, and then calculate the interest for
the second month.
f Calculate the balance owing at the end of the second month and the balance owing
at the end of the third month, at which time Kai pays off the entire balance.
g Which card should Kai use for these bills?
t i gat
es Examining bank fees and taxes
io
ion v
in
n inv
es
t i gat
Find three bank accounts into which your pay could be deposited electronically.
Answer the following questions about them.
1 What is the interest rate
payable on the account?
2 Is there a minimum balance
that must be maintained in the
account?
3 What are the features of this
account? (For example, do
you get a cheque book?)
4 Is there a monthly
management fee on the
account?
5 How many free transactions
are you allowed each month?
What are the charges for
exceeding this number of
transactions?
6 Are the transaction fees
applied differently to deposits
and withdrawals? Are they
levied differently for over-the-
counter and automatic teller
and EFTPOS transactions?
2
1 Find the percentage discount on a music CD if it is discounted from $34.95 to $29.95.
2 A sofa is marked at $1500. If the price is reduced by 20%, calculate the sale price.
3 Find the percentage profit for a case of tinned tomatoes that were bought for $22 and
sold for $28.
4 What are the two types of expenses in a budget?
5 Car insurance costs $440 per year. Write this expense as a weekly amount.
6 John’s after-tax pay is $1800 per fortnight. Express this as a yearly amount.
7 Consider the following readings of an electricity meter:
June 44 500 kWh
September 47 610 kWh
Calculate the electricity consumption for this quarter.
8 If credit card interest is calculated using an annual rate of 18%, what is the daily rate
of interest that is charged?
9 What date is 55 days after March 10?
10 On a credit card statement, what does a figure of $540.65 in the ‘Closing Balance’
mean?

The exchange rate
When Karla visits New Zealand she will not be
able to use Australian currency (for example to
hire a taxi or buy food). She first has to convert
Australian dollars (A$) to New Zealand dollars
(NZ$). How many NZ$ can she buy with one
A$? This varies from day to day according to
what is called the exchange rate. A table
showing exchange rates for all major currencies
is shown below.
TAXI
One Australian dollar is equivalent to:

Currency Buying Selling
Canadian dollar 0.9224 0.8361
European euro 0.6422 0.5782
Hong Kong dollar 7.3802 6.6104
Japanese yen 108.5900 95.1300
New Zealand dollar 1.2163 1.1027
South African rand 7.3170 5.7666
Thai baht 29.5520 23.2350
UK pound sterling 0.4624 0.4315
United States dollar 0.9101 0.8610
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 will
sell her NZ$1.1027 for every A$1 she hands over.
WORKED Example 13
If Karla exchanges A$400 for NZ$, how much will she get?
THINK WRITE
1 Use the selling price in the table. The bank will sell NZ$1.1027 for A$1.
2 Multiply by 400. A$400 is worth NZ$1.1027 × 400.
3 Write the answer. Karla will receive NZ$441.08.
WORKED Example 14
If Karla exchanges NZ$350 for A$ when she returns, how much will she get?
THINK WRITE
1 Use the buying price in the table. The bank will buy NZ$1.2163 for A$1.
2 Divide 350 by 1.2163. NZ$350 is worth A$350 ÷ 1.2163.
3 Write the answer. Karla will receive A$287.76.
remember
remember
1. When you exchange A$ 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
3F The exchange rate

Use the table of exchange rates on page 99.
WORKED 1 Convert A$100 to each of the following currencies.
Example
13
a US dollars b UK pounds
c European euro d Hong Kong dollars
WORKED 2 Convert each of these amounts to Australian dollars.
Example
14
a 220 US dollars b 320 UK pounds
c 400 European euro d 20 000 Japanese yen
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 European euro.
a How many euros does she have?
b When in Germany she spends 220 euros. How many euros 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 one
eBook plus
week, on Monday, A$1 would have bought 9500 rupiah whereas on Thursday A$1
Digital doc: would have bought 10 900 rupiah. On holidays in Indonesia at this time, Joel
WorkSHEET 3.2 exchanged A$120 and paid for a camera on Monday. How much would he have saved
if he had waited to make the transaction on Thursday (assuming the marked price did
not change).
summary
Discount
• Discount = Original price − Sale price
Discount
• Percentage discount = --------------------------------- × 100%
Original price
• Sale price = Original price − percentage of the original price
= (100 − percentage discount)% of the original price
Profit and loss

• Profit = Sale price − Cost price
Profit
• Percentage profit = ------------------------ × 100%
Cost price
• Loss = Cost price − Selling price
Loss
• Percentage loss = ------------------------ × 100%
Cost price
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.
Debit cards
• Allow the user to spend money without carrying cash
• Allow payments to come directly from a savings account; that is, from money the
user actually has.
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.
CHAPTER
review
1 If the original price of a ‘Patches’ doll is $40, determine its selling price after a discount of
3A 12.5% is applied.
2 A pair of Italian-made shoes was discounted from $180 to $150. Calculate the percentage
3A discount.
3 The price on a 5-piece cookware set is reduced by 15% to $212.50. What was the price of
3A the set before the discount?
4 Copy and complete the following table.

3A
Cost price Percentage Discount Selling price
Item ($) discount ($) ($)
a 200 12%
b 150 142.50
c 98 9.80
d 16.25 113.75
e 20% 332.80
f 33 1--3- % 76
5 If the cost price of

3B a microwave is $210
and the percentage
profit is 22%, what
is its selling price?
6 Selling a damaged
3B rug at $125 will
incur 37.5% loss.
What was the cost
price of the rug?

7 Calculate the percentage profit or loss for each of the following:
a a 3-piece lounge room suite: CP $1500, SP $2700 3B
b a 50-mL bottle of French perfume: CP $58, SP $130
c last season’s dress: CP $40, SP $25
d a damaged toy set: CP $18, SP $10.
8 Rose has listed her major expenses as follows:

3C
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
Petrol $40 Weekly
Clothes $120 Monthly
Holidays $1200 Yearly
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 $570.
9 Gas is charged at 1.948c per megajoule

3D (MJ). Find the cost of using 5000 MJ
(to the nearest cent).
10 An electricity bill consists of a charge

3D 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

3E 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 plus 2.5% of
the balance owing. 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’

3E 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 (a) $25, (b) 2.5% of the
outstanding balance or (c) the
excess above the credit limit plus
2.5% of the balance owing.
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

3F to convert US$100 to UK pounds and
the only way this can be done is to
eBook plus convert the US$ to A$ and then change
Digital doc:
the A$ to UK pounds. What amount
Test Yourself will he have in UK pounds? Use the
Chapter 3
table on page 99.

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5_61_08071_MQA11Qld2E Ch03 Page 65 Monday, July 14, 2008 3:01 PM

1 Calculate 7.5% of $450.

Chapter 3 Spending money 67

Chapter 3 Spending money 69

MAGIC BLENDER SANDWICH TOASTER

TEFLON–BASED IRON RETRO–TOASTER

3 This advertising brochure states that all man-

4 Healthway is promoting sav-

Vitamin d Multi e Horseradish f

WORKED 5 Copy and complete the following table.

a Microwave oven 300 10%

b Furniture set 2030 5%

d Necklace 1560 12.5%

e Refrigerator 760 20%

f Stereo system 480 33 1--3- %

g Washing machine 564 25%

h Car 7500 50%

Chapter 3 Spending money 71

Profit and loss

Chapter 3 Spending money 73

3B Profit and loss

Chapter 3 Spending money 75

Chapter 3 Spending money 77

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

We need to understand that budgets give us only an approximation of the real-life

Use the table to resolve each of the following.

Chapter 3 Spending money 79

Combined monthly salary Mortgage repayments $1100

Total: $3800 Total: $2350

Use the table to calculate the following:

Chapter 3 Spending money 81

Chapter 3 Spending money 83

1 a If the bill is paid by 10 April, what amount is owing?

For the month of January,

a What is the value of the bill?

Chapter 3 Spending money 85

Chapter 3 Spending money 87

8 a What amount is to be paid, if the bill is paid by 1st February?

9 a How much water was used during the measurement period?

Chapter 3 Spending money 89

13 a In the summary-of-charges section,

Chapter 3 Spending money 91

Source: Commonwealth Bank. Credit Cards — Conditions of Use

Chapter 3 Spending money 93

calculate the first month’s interest. 100

Chapter 3 Spending money 95

Date Transaction Details Amount

a Calculate the interest-free period for each of the above transactions.

Overdue/Over limit Opening Balance New charges Payments/refunds Closing Balance

Date Reference Number Transaction Details Amount (A) $

SPECIMEN STATEMENT ONLY – USED FOR PURPOSE OF ILLUSTRATION

Credit limit $1000 Annual percentage rate 16.90

2345 6789 1234 9299

Chapter 3 Spending money 97

Chapter 3 Spending money 99

One Australian dollar is equivalent to:

3F The exchange rate