Money
3.0 Measurements · 3.7 Money
Syllabus tag: Kenya CBC | Grade 7 Mathematics | Strand 3.0 Measurements | Sub-Strand 3.7 Money (12 lessons)
Lesson objectives
By the end of this topic, you will be able to:
- Work out profit, loss, discount and commission, and their percentage forms
- Interpret and prepare bills
- Work out postal charges
- Identify mobile money services and work out mobile money transactions
Money
Every trade involves a price paid and a price charged. This topic works out the difference, and the deductions and additions that go with it.
a) Profit and loss
The buying price is what the seller paid. The selling price is what the buyer paid.
If the selling price is higher, there is a profit. If it is lower, there is a loss.
For the percentage, always compare with the buying price. Dividing by the selling price is the usual error and gives a smaller, wrong answer.
For a loss, the method is identical using buying minus selling.
b) Discount
A discount is a reduction from the marked price.
Work out the percentage of the marked price, then subtract it.
A shortcut: 10% off means you pay 90%, so multiply by 0.9 directly.
c) Commission
Commission is payment for selling something, worked out as a percentage of the value sold.
An agent on 5% commission sells goods worth KES 40 000. The commission is 5% of 40 000, which is KES 2 000.
Salespeople, land agents and insurance agents are commonly paid this way.
d) Bills
A bill lists what was bought, the quantity, the unit price and the total for each item.
The bill total is the sum of those line totals.
To check a bill, work down it line by line. Multiply quantity by unit price and compare with the printed total, then add the column yourself.
Errors on bills usually sit in one line rather than the sum. Checking line by line finds them faster.
e) Postal charges
Sending a parcel costs according to its weight and its destination.
The charge usually rises in steps rather than smoothly. A parcel just over a step boundary costs the same as one at the top of that step.
Read the rate table carefully and find which band the weight falls into.
f) Mobile money
Mobile money services let people send, receive and withdraw money by phone.
Charges depend on the amount and on what you are doing. Sending, withdrawing and paying a bill often carry different rates.
Always check the charge before confirming. The amount that leaves your account is the amount sent plus the charge.
Several small withdrawals usually cost more in total than one larger one. Each transaction carries its own charge.
g) Where this is used
A shopkeeper prices stock to make a profit. A customer compares a discounted price against another shop. Anyone using M-Pesa is paying transaction charges, whether they notice or not.
Words to know
- Cost Price (CP) — the price a trader pays to acquire an item.
- Selling Price (SP) — the price a trader sells an item for.
- Marked Price (MP) — the originally listed price of an item, before any discount.
- Commission — a payment earned for making a sale, usually a percentage of the sale value.
- Postal charge — the fee for sending mail or a parcel, based on weight, size and service level.
:::checkpoint Check yourself
- An item is bought for KES 500 and sold for KES 650. Find the profit and the percentage profit.
- A shirt marked KES 1 200 has a 25% discount. What do you pay?
- An agent earns 4% commission on sales of KES 50 000. How much is that?
- Why is one large withdrawal usually cheaper than several small ones? :::
Bridge to practice
Try the exercises below — on profit, loss, discount, commission, bills and mobile money.