Money Matters 1

Question 1

What is a salary?

Answer 1

A pre determined amount is paid for the year. The pay period could be weekly, every two weeks (fortnightly) or every month.
Examples: teacher soldiers, civil servants (ie the people who work for the government)

Question 2

What are wages?

Answer 2

Wages are based on an hourly rate of pay.
Examples: shop assistants, mechanics and waitresses

Question 3

What is commission?

Answer 3

People who do this type of work usually have a fixed wage or salary. However, they will receive a bonus - or commission - which is a percentage of the value of the goods sold. Examples: estate agents.c car salespeople, insurance agents

Question 4

How do you convert an annual salary of €32000 to (I) monthly (II) fortnightly (III) weekly (IV) hourly salary (assume a 40 hour week is worked)

Answer 4

(I) as there are 12 months in a year monthly salary = €32,000 divided by 12= 2666.666 = €2666.67
(II) a fortnight is equal to 2 week there are 52 weeks in the year.
If you are paid fortnightly you will receive 26 payment periods.
Fortnightly payment = 32,000 divided by 26 = 1230.7692 = 1230.77
(III) weekly payment = 32000 divided by 52= 615.384 =615.38
(IV) we have been told to assume a 40 hour week and there are 52 weeks in a year the number of hours worked will be 52x40
Hourly payment= 32,000 divided by what the answer to 52x40 is = 32000 divided by 2080 = 15.384 = 15.38

Question 5

Covert a monthly salary of 2500 to (I)weekly and then (II) hourly amounts. Assume it is a 40 hour week

Answer 5

(I) when we are given a monthly salary we must first multiply it by 12 to find the annual salary. Then divide this answer by 52 to find the weekly amount.
Weekly salary = 2500x12 divided by 52 = 576.923 = 576.92
(II) we have been told that a 40 hour week is worked
Hourly salary = 576.92 divided by 40 = 14.423 = 14.42

Question 6

Joan sells pastries and soft drinks to hotel. She is paid 1200 per month plus a commission of 5% of her total sales in May, Joan’s sales totalled 18,500. Calculate her total pay in May?

Answer 6

Total pay for May = 1200 + 5% of 18500
5% of 18500 = 5 over 100x18500=925
Total pay for May= 1200+925=€2125

Question 7

Sally works 40 hours. Week. She is paid 11.30 per hour (I) calculate sallys weekly wage (II) in particular week Sally worked 6 hours overtime for which she was paid time and a half how much did Sally earn in that week (III) at Christmas sally worked her 40 hour week but also worked for 8 hours on Sunday for which she was paid double time how much did Sally earn that week?

Answer 7

(I) weekly wage= 11.30x40 hours = €452
(II) weekly wage plus 6 hours overtime at time and a half. Her hourly rate for this overtime was 11.30x1.5=16.95
Weekly wage= (11.30x40 hours) + (16.95+6 hours)
=452+101.70
=553.70
(III) sally worked an extra 8 hours on Sunday at double time. Her hourly rate for the day was 11.30x2 = 22.60
Weekly wage= (11.30x40 hours) + (22.60x8 hours)
Weekly wage= 452+180.80
Weekly wage= 632.80

Question 8

What is VAT

Answer 8

VAT Aka value added tax is a tax charged on the sale of most goods and services of Ireland. VAT is charged at different rates for various goods and services

Question 9

John receives his electricity bill. The total bill including VAT at 13.5% is €215.65
(I) how much was the bill before VAT had been added
(II) how much VAT had been added to the bill?

Answer 9

Let original bill= 100%
Original bill plus VAT at 13.5% =. 100% + 13.5!= 113.5
(I) 113.5 = 215.65
1% = 215.56 divided by 113.5
1% = 1.90
100% = 1.90x100
Original bill= €190
(Ii) total VAT added = 215.65 – €190
Total VAT added= €25.65

Question 10

A farmer is purchasing new animals for his farm. The total bill was €2515.20. This included a charge of 115.20 for VAT
(I) what was the bill for the animals before VAT was added
(II) at what percentage rate was VAT charged

Answer 10

(I) cost before VAT is added = final cost – VAT
= 2515.20–115.20
=2400 was the cost before VAT was added
(II) express the VAT as a percentage of the price before VAT
Rate of vat: vat paid divided price before VAT was added
Rate of VAT: 115.20 divided by 2400x 100 divide 1
Rate of vat= 4.8%

Question 11

What is a kilowatt hour?

Answer 11

A kilowatt hour is the basic unit of electricity

Question 12

What is profit?

Answer 12

If the selling price is grater than cost price

Question 13

What is loss?

Answer 13

If the selling price is less than cost price

Question 14

What is profit of gain?

Answer 14

Profit of gain= selling price – cost price

Question 15

What is the sun for loss

Answer 15

Selling price – cost price

Question 16

What is the percentage profit?

Answer 16

Profit divide cost price x 100, divide one

Question 17

What is the percentage loss

Answer 17

Loss divide cost price times 100 divide ome

Question 18

Andy buys a car for 4000 he then sells it for 5500 find the value of the following in euros:
(I) the cost price (II) the selling price (III) the profit or loss made (IV) the percentage profit or loss

Answer 18

(I) the cost price is the amount of money Andy paid for the car = 4000
(II) the sellinh price is what Andy sold the car for =5500
(III) the profit = selling price – cost price
=5500-4000
=1500
(IV) the percentage profit
Percentage profit= profit divide cost price times 100 over 1
= 1500 divide 4000 times 100 over 1
= 37.5

Question 19

Aaron bought a laptop for 420 and sold it at a profit of 12 and a half%
Fine (I) the profit he made in euro (II) the sale of price of the laptop

Answer 19

(I) Profit= 12.5% of 420 = 52.50
(II) selling price = cost price+profit
= 420 + 52.50
= 472.50

Question 20

Paul owns a game shop he has bought too many copies of a particular game so he decides to sell them at a loss of 40%. He is selling each game for €18 find the value of the following:
(I) the cost price Paul paid for the game
(II) the loss in euros Paul makes on each game sold

Answer 20

(I) selling price = cost price – loss
Selling price = 100%–40%
Sellinh price= 60%
This means that the selling price is 60% of the cost price
To find the actual Cody price we must find 100%
60% = €18
1% = 18 divide 60
1% = 0.3
100% = 0.3x100= 30
(II) loss= sellinh price – cost price
Loss= 18-30
Loss= -12
Paul is making a loss of 12 euro on each game solid

Question 21

What the principle?

Answer 21

The sun of money borrowed or invested over a period of time

Question 22

What is the interest rate?

Answer 22

The rate at which interest is paid on a loan or savings. This value is usually represented as a percentage

Question 23

What is the time?

Answer 23

The lengths of time for which the money is borrowed or invested. This value can be expressed in days, weeks months or years

Question 24

What is the final amount?

Answer 24

The final sum of money due, including interest at the end of the investment or borrowing period

Question 25

What is interest?

Answer 25

Interest is the sun of money that you pay for borrowing or that is paid to you for investing

Question 26

What are the two types of interest rates

Answer 26

Simple interest is interest that is always calculated on the initial principle
Compound interest is interested that is calculated not only on the initial principles but also the accumulated interest of previous ueatd

Question 27

How do you calculate the simple interest?

Answer 27

Simple interest = principlexratextime

Question 28

How do you calculate compound interest?

Answer 28

F= P(L+I)

Question 29

You invested 5000 at an interest rate of 3% for 2 years. The bank pays you compound interest annually. What is your total return on this investment?

Answer 29

Principle = 5000 I= 3% (0.03) t= 2years
F= P(1+I)
F=5000(1+0.03)
F=5000 (1.03)
F= 5000 (1.0608)
F= 5304.5
Final amount: 5304.50

Question 30

You borrowed 1500 for 3 years at 7% interest that is compounded annually (once a year)
(I) the entire loan is due to be repaid at the end of the third year. What amount will you repay?
(II) how much interest did you pay?

Answer 30

(I) principle = 1500 I= 7% (0.07) t=3
F= p(1+i)
F=1500(1+0.07)
F= 1500 (1.07)
F= 1500 (1.225)
F= 1837.56
Final amount due= 1837.56
(II) interest = amount repaid – amount borrowed
Interest = 1837.56–1500
Interest = 337.56

Question 31

8000 is invested at a rate of 4% per annum. At the beginning of the second year, an additional 800 is added to this amount. The interest rate for the second year increases to 5.3%
(I) how much is this investment worth after 1 year
(II) what is the final amount in the account after 2 years
(III) how much interest was earned on the investment over a period of 2 years?

Answer 31

(I) find the value of investment at the end of the year:
Principle= 8000 I=4% (0.04) t=1
F= p(1+I)
F= 8000 (1+0.04)
F= 8000 (1.04)
F= 8.320
F= 8.320
Final amount at the end of year 1= €8320
(II) value of investment at the end of year 2:
New principles= 8320+800= 9120
I= 5.3% (0.053)
F= P(1+I)
F= 9120 (1+0.053)
F= 9120 (1.053)
F= 9603.36
Final amount at the end of year 2= 9603.36
(III) amount of interest earned
Total interest = final amount – initial amount – additional sun invested
Total interest = 9603.36 – 8000 – 800
Total interest = 803.36

Question 32

What is an exchange rate?

Answer 32

An exchange rate is the rate at which one currency may be converted into another

Question 33

How do you solve problems involving currency exchanges?

Answer 33

1. Write the given exchange rate such that they required currency is on the right hand side
2. Divide both sides by an appropriate values to get 1 on the left hand side
3. Multiply both sides to get the value required

Question 34

Cathy is planning to visit America for a holiday. She needs to exchange 500 into dollars for spending money. If the exchange rate offered is €1= S1.12 how many dollars should she receive?

Answer 34

Step 1; €1= S1.12 (We want dollars so put dollars on the right hand side)
Step 2: not required since the left hand is already = 1
Step 3= €1x500= 1.12x500
500=560

Question 35

Jacob is returning to Ireland from a trip to visit his friend in Poland. He unit of currency in Poland is called the zloty (Zl) Jacob has 400 zloty and wants to convert them them to euros. If the exchange rate is 4.17 = €1 how much to the nearest euro will he receive?

Answer 35

Step 1: 4.17 zl = €1 (we want euro so put it on the right)
Step 2; 417 divided by 4.17 = €1 over 4.17x400 (multiply both sides by 400)
400 zl = 0.24x400
400zl = 96 therefore Jacob receives €96

Question 36

Kai wants to visit his parents in New Zealand. He needs to change €800 into New Zealand dollars he visits his local bank and the exchange rate available is shown below
(I) how many New Zealand dollars will Kai get for €1000
(II) if the bank charges a commission fee of 2.5 of the euro value how much will kai have to pay for the transaction?
(III) when kai returns to Ireland he has 350 New Zealand’s dollars left. He wants to exchange these for euros. How much do nearest cent will he recieve

Answer 36

(I) firstly Kai is buying dollars so the bank is selling dollars. Therefore we must use “sell rate” in our currency exchange
€1= 1.66
€1x1000= 1.66x1000
1000= 1660
Kai receives 1660
(II) the bank charges a 2.5 commission on the euro amount of the transaction
Find 2.5% of 1000
1000x2.5 divide 100= 25
Kai must pay a commission of €25
(III) on his return from New Zealand Kai has 350 that he wants to convert back to euros.
In this case Kai is selling the dollars and the bank is buying them. Therefore we use the “we buy” rate 1.79 = €1
1= €1 divide 1.79
1x350 = 1 divide 1.79x 350
350 = 195. 53
Kai receives 195.53