Money
2.0 Measurement · 2.6 Money
Syllabus tag: Kenya CBC | Grade 6 Mathematics | Strand 2.0 Measurement | Sub-Strand 2.6 Money (8 Lessons)
Lesson objectives
By the end of this topic, you will be able to:
- Prepare a simple budget
- Determine buying and selling prices of items
- Work out profit, and calculate loss
- Identify types of taxes
- Appreciate the use of money in real-life situations
Money
Money comes in and money goes out. This topic plans it, and works out whether a trade made a gain or not.
a) A simple budget
A budget is a plan for money. It lists what comes in and what goes out.
| Item | Amount |
|---|---|
| Money received | 2 000 |
| Food | 800 |
| Transport | 400 |
| Books | 300 |
| Total spent | 1 500 |
| Left over | 500 |
Write down the money coming in first. Then list everything going out.
Add up what goes out. Take that from what comes in. What remains is your saving.
The total going out may be more than the money coming in. Then the budget does not work. Cut something before you start.
b) Needs and wants
A need is something you must have. Food, school fees, medicine.
A want is something nice to have. Sweets, a new ball, an outing.
Put needs in the budget first. Spend on wants only from what is left.
c) Buying and selling price
The buying price is what the trader paid for the goods.
The selling price is what the customer pays.
d) Profit
If the selling price is more than the buying price, there is a profit.
Profit = selling price − buying price.
e) Loss
If the selling price is less than the buying price, there is a loss.
Loss = buying price − selling price.
Take the smaller from the larger either way. The answer is never negative, because you name it as a profit or a loss instead.
f) Types of taxes
A tax is money paid to the government to run the country.
Income tax is paid on what a person earns.
Value Added Tax, or VAT, is added to the price of goods in a shop.
Customs duty is paid on goods brought in from another country.
Taxes pay for schools, hospitals, roads and the police.
g) Where this is used
A shopkeeper works out whether the day was worth it. A family plans a month. Everyone buying in a shop pays VAT, whether they notice it or not.
Words to know
- Budget — a plan listing expected income and expenses.
- Buying price (cost price) — what a trader pays to acquire an item.
- Selling price — what an item is sold for.
- Profit — the amount gained when selling price exceeds buying price.
- Loss — the amount lost when buying price exceeds selling price.
- VAT (Value Added Tax) — a tax added to the price of most goods and services, currently 16% in Kenya.
:::checkpoint Check yourself
- What is the difference between a need and a want?
- An item is bought for KES 250 and sold for KES 310. Find the profit.
- An item is bought for KES 900 and sold for KES 840. Find the loss.
- Name one type of tax and say what it is paid on. :::
Bridge to practice
Try the exercises below — budgeting, profit and loss, and VAT calculations, the same skills covered above.