MATHEMATICS FORM ONE

1. ISLAMIC INHERITANCE MATHEMATICS

Historical Background
Prior to Islam, and within the Arabian Peninsula other societies, the system of inheritance
was confined to male descendants. Women not only did not have any share of inheritance,
but they themselves were inheritable too.
 Siblings from the mother's side, like half-brothers or half-sisters, were completely
excluded. Other cultures also practiced primogeniture, under which all property went to
the eldest male child.
A major Arab mathematician named Muhammad ibn Musa al-Khwarizmi wrote an
influential textbook in about 820 called Hisab al-jabr w’al-muqabala (Calculation by
Restoration and Reduction) that is known today as the Algebra. This book was the
starting point for Arab work in algebra, and it is credited for giving the subject its name.
Al-Khwarizmi was probably born in Soviet Central Asia but he did most of his work in
algebra in Baghdad, where he was an astronomer and head of the library at the House of
Wisdom.
Al-Kwarizmi was a Muslim and the second half of his book Algebra contains problems
about the Islamic law of inheritance.
Inheritance and the Qur'an
The Qur'an introduced a number of different rights and restrictions on matters of
inheritance, including general improvements to the treatment of women and family life.
The Qur'an also presented efforts to fix the laws of inheritance, and thus forming a
complete legal system. This development was in contrast to pre-Islamic societies where
rules of inheritance varied considerably.
Furthermore, the Qur'an introduced additional heirs that were not entitled inheritance in
pre-Islamic times, mentioning nine relatives specifically of which six were female and
three were male. The laws of inheritance in the Qur'an also included other male relatives,
like the husband and half-brothers from the mother’s side, which were excluded from
inheritance in old customs. The heirs mentioned in the Qur'an are the mother, father,
husband, wife, daughter, uterine brother, full sister, uterine sister, and consanguine sister.
In general, the Qur'an improved the status of women by identifying their share of inheritance
in clear terms. It also completely forbade the practice of inheriting widows. This is not meant
as a regular legal ordinance, but is part of the Qur’anic endeavor to improve the position of
women. The Qur'an does not explicitly mention the shares of male relatives, such as
the decedent's son, but provides the rule that the son's share must be twice that of the
daughter's. Muslim theologians explain this aspect of inheritance by looking at Islamic law in
its entirety, which bestows the responsibility and accountability on men to provide safety,
protection and sustenance to women.
In addition to the above changes, the Qur'an grants testamentary powers to Muslims in
disposing their property.  In their will, called waṣeyya, Muslims are allowed to give out a
maximum of one third of their property. Muslims are also encouraged to give money to
the orphans and poor if they are present during the division of property.
It has also been reported in Hadith that prophet Muhammad allotted great importance to
the laws of inheritance and ordered his followers to learn and teach them. Muslim jurists
used this Hadith as a starting point to expound the laws of inheritance even further, as
well as methods of juristic reasoning, like Qiyas. In later periods, large volumes of work
have been written on the subject.

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Detail of Inheritance in Islamic law Inheritance is considered as an integral part of Shariah

Law and its application in Islamic society is a mandatory. Muslims inherit from one
another as stated in the Qur'an. Hence, there is a legal share for relatives of the decedent in
his estate and property. The major rules of inheritance are detailed
in Qur'an, Hadith and Fiqh.
When a Muslim dies there are four duties which need to be performed. They are:
 Payment of funeral expenses
 Payment of his/ her debts
 Execute the testamentary will of the deceased (which can only be a maximum of one
third of the property).
 Distribute the remainder of estate and property to the relatives of the deceased
according to Shariah Law.
Therefore, it is necessary to determine the relatives of the deceased who are entitled to
inherit, and their shares.
These laws take greater prominence in Islam because of the restriction placed on
the testator (a person who makes a will). Islamic law places two restrictions on the
testator:
 To whom he or she can bequeath his or her wealth.
 The amount that he or she can bequeath (which must not exceed one third of the
overall wealth).
Different types of heirs
Heirs referred to as primary heirs are always entitled to a share of the inheritance, they are
never totally excluded. These primary heirs consist of the spouse relict, both parents, the
son and the daughter. All remaining heirs can be totally excluded by the presence of other
heirs. But under certain circumstances, other heirs can also inherit as residuary, namely the
father, paternal grandfather, daughter, agnatic granddaughter, full sister, consanguine
sister and mother. Those who inherit are usually confined to three groups:
1. Quota-heirs (dhawu al-farāʾḍ), usually include daughters, parents, grandparents,
husband and wife/ wives, brothers and sisters, and others. This group usually take a
designated share or quota of the estates.
2. Members of the aṣaba (residuaries), usually a combination of male (and sometimes
female) relatives that inherit as residuaries after the shares of the Quota-heirs is
distributed.
3. In case a person leaves no direct relatives and there is no uṣaba, his
property escheats to the state treasury, Bayt al-mal.

Rules of Inclusion and Exclusion

In Islamic law, only relatives with a legitimate blood relationship to the deceased are
entitled to inherit. Thus, illegitimate children and adopted children have no shares in
inheritance. In general, a full brother will exclude a consanguine brother, but
not uterine brother. In case where a deceased man leaves a pregnant woman, the unborn
child's share will be reserved. Also a woman during the time of waiting (ʿidda)
after divorce is considered as a wife of the deceased for purposes of inheritance.
There are even further rules of exclusion and inclusion of different relatives. The only
"practical situations" which may cause disqualification are differences of religion and
homicide. But schools of Islamic jurisprudence differed whether a Muslim can inherit
from a non-Muslim or not. All the jurists agree that intentional or unjustifiable killing
would exclude a person from inheritance. According to the law, when a woman dies her
husband receives one-quarter of her estate, and the rest is divided among her children so

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that a son receives twice as much as a daughter. If the woman chooses to leave money to
a stranger, the stranger cannot receive more than one-third of the estate without the
approval of the heirs. If only some of the heirs approve, the approving heirs must pay the
stranger out of their own shares the amount that exceeds one-third of the estate. Whether
approved by all heirs or not, the stranger’s share must be paid before the rest is shared out
among the heirs.
Example:
A woman dies leaving a husband, a son, and three daughters. She also leaves a bequest
consisting of 1/8 + 1/7 of her estate to a stranger. She leaves $224,000. Calculate the
shares of her estate that go to each of her beneficiaries.
Solution: The stranger receives 1/8 + 1/7 = 15/56 of the estate, leaving 41/56 to be
shared out among the family.
The husband receives one-quarter of what remains, or 1/4 of 41/56 = 41/224.
The son and the three daughters receive their shares in the ratio 2:1:1:1 so the son’s share
is two fifths of the estate after the stranger and husband have been given their bequests and
each daughter’s share is one fifth. (2+1+1+1=5).
If the total estate is $224,000, the shares received by each beneficiary will be:
Stranger:15/56 of $224,000 = $60,000.
Husband:41/224 of $224,000 = $41,000.
Son:2/5 of ($224,000 - 101,000) = $49,200.
Each daughter: 1/5 of ($224,000 - 101,000) = $24,600.
TOTAL = $224,000.
CLASSIFICATION OF HEIRS
1. The primary (or immediate) heirs classified as level 1 are:
 the spouse (husband or a maximum of four wives)
 the children (sons and daughters)
 the parents (father & mother)
 the grandchildren (sons’s son or son’s daughter only), (applicable only when the son is
already deceased only and has offspring)
2. The secondary heirs classified as level 2 are:
 the grandparents (paternal and maternal)
 the brothers and/or sisters (in the absence of father and son only)
 the uncles and/or aunts (in the absence of grandparents only)
 the nephews and/or nieces (in the absence of brothers and sisters only)
note: it is not practical to go beyond grandparents as the chances of great-grandparents
surviving before you is not very high. however, the logic is that in the absence of a
particular heir, the next level becomes eligible for inheritance. eg; if the grandparents are
dead then the great grandparents are entitled (if living only) and so on. it is better, for
practicality and convenience to limit the inheritance level up to the grandparents and the
grandchildren. if we attempt to go beyond these levels there will be no limit to the
program logic validation.
Under Islamic law, the primary beneficiaries of a deceased person are his/her immediate
(level 1) heirs. ie; spouse(s), children, parents and grandchildren (if children are deceased
only). the grandchildren that are entitled are only the son’s son or the son’s daughter.
daughters children are not entitled even if the daughter is deceased.

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In the absence of some or all of these heirs the secondary beneficiaries (level 2) become
heirs under various conditions. in the absence of a particular heir (eg; uncle) if and when
he/she is entitled the children of that heir become eligible.
Examples of shares inheritance
1. Share of husband
 if no entitled descendants exist (ie; children/grandchildren) , then husband = ½
 if entitled descendants exist (ie; children/grandchildren) , then husband = 1/4
Note: entitled descendants = sons, daughters, son’s son, son’s daughter. Daughter’s
children are not entitled.
2. Share of wife
 if no entitled descendants exist (ie; children/grandchildren), then wife = ¼
 if entitled descendants exist (ie; children/grandchildren), then wife = 1/8
Note: entitled descendants = sons, daughters, son’s son, son’s daughter. Daughter’s
children are not entitled.
3. Share of daughter’(s)
 if only one daughter (and no sons) then daughter = 1/2
 if two or more daughters only (and no sons) then daughters = 2/3 (to be shared equally
between all of them)
 if both son’s & daughters exist, then son:daughter = 2:1

4. Share of father
 if entitled descendants exist (sons, daughters, son’s sons, son’s daughters) then father = 1/6
 if no male descendants exist (sons, son’s sons) then father = 1/6 plus residue (residue =
remainder after all legal shares are distributed)
 if no entitled descendants exist then father = residue
5. Share of mother
 if entitled descendants or brothers/sisters exist then mother = 1/6
 if no entitled descendants exist then
 if no brothers/sisters, no father, no spouse exist then mother = 1/3
 if brothers/sisters, father, or spouse exist then mother = 1/3 of residue
6. Uterine brother/sister ( from same mother, different father)
 if one uterine brother/sister exist then
 if no entitled descendants and no male ascendants (father/father’s father etc) then uterine
brother = 1/6 or uterine sister = 1/6
 if two or more uterine brothers/sisters exist then
 if no entitled descendants .and.no male ascendants (father/father’s father etc.) then all
uterine brothers & sisters = 1/3

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note: if there are uterine brothers/sisters in addition to full brothers/sisters (same

father/mother), then they share in the residue.
7. share of son’s daughter
 if one son’s daughter exist then
 if no daughters exist then
 if no son’s son exist then son’s daughter = 1/2
 if son’s son exist then son’s daughter = half share of son’s son (ie son’s son share: son’s
daughter share = 2:1)
 if two or more son’s daughters exist then if no daughters exist then
 if no son’s sons exist then son’s daughters = 2/3 (equally between them)
 if son’s son exists then son’s daughter = half share of son’s son (ie son’s son share: son’s
daughter share = 2:1)
8. Share of full brother/sister
(full brother/sisters are brothers/sisters from the same father & mother)
brothers & sisters inherit only when there are no descendants (son/sons, son’s son
etc.) and no ascendants (father/grandfather etc.)

The arabic word “al-khalala” is used in the quran, chapter 4 - al-nisa, verses 12 & 176,
which is translated by almost all the translators of the quran to mean “ascendants &
descendants” thus giving rise to the interpretation that they include “parents and children”.
however, many scholars have preferred to classify the word as meaning “father or son”
thus excluding the female components of both ascendants and descendants (mother &
daughters).
 if no full brother and no female entitled descendant exist (daughter, son’s daughter etc.)
then
 if deceased was male, then full sister = 1/2 (if only one)
 if no full sister and no female entitled descendant exist then
 if deceased was female, then full brother = 1 (if only one)
 if two or more brothers & sisters then full sisters = 2/3 (shared equally between them) full
brother’s & sister’s (combination) = 2:1
 if no full brother exist but female entitled descendant exist (daughter, son’s daughter etc.)
then full sister = 1/6 (if only one)
 if no full sister exist but female entitled descendant exist then full brother = 1/6 (if only
one)
 if female entitled descendant exist then full sisters & brothers = 1/3 (share equally)

9. consanguine sister (sister from same father but different mother)

 consanguine sisters inherit only when there are no son’s or son’s son(s) and no father
and no full brother.
 if only one full sister and no consanguine brother then consanguine sister (if only one) =
1/2
 consanguine sister(s) (if two or more) = 2/3
 if one full sister and consanguine brother(s) then (consanguine) brother:sister = 2:1

10. true grandmother

 true grandmother is defined as the one whose line of connection with the deceased is
not interrupted by a male between two females. they are entitled only if the father or
mother do not exist. eg; mother’s mother, father’s mother father’s father’s mother,
mother’s mother’s mother true grandmother = 1/6

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11. true grandfather

 true grandfather is the one whose line of connection with the deceased is not
interrupted by a female between two males. they are entitled only if the father or
mother do not exist. eg; father’s father, father’s father’s father, mother’s father, mother’s
father’s father
 true grandfather = 1/6 if male descendants exist (son, etc)
 true grandfather = 1/6 + residue if female descendants exist
 true grandfather = residue if no male/female descendants exist
12. uncles & aunts (father’s/mother’s brothers & sisters)
 Uncles and aunts are only entitled in the absence of grandparents. this means that they will
receive shares only if there are no parents and grandparents because grandparents do not
inherit when the parents are living. they will also not inherit if the children (or children’s
children) of the deceased are living. proportions here are also in the ratio of 2:1 for
male:female.
13. nephews & nieces (children of brothers/sisters)
 Nephews and nieces are only entitled in the absence of brothers and sisters. this means
that they take the shares of the brothers/sisters of the deceased in their absence. hence
a nepew/niece will receive what his/her parent (brother/siuster of the deceased) would
have received if he/she was alive. they will also not inherit if the children (or children’s
children) of the deceased are living. proportions here are also 2:1 for male : female.
Exercises
Solve the following Islamic law inheritance problem.
A woman’s estate totals $294,000. She dies leaving a husband, son and two daughters. In
her will, she leaves a bequest of 1/7 + 1/6 of her estate to a stranger. Calculate how much
of her estate each of her beneficiaries will receive.
1. Write out all of your calculations.
2. Check to make sure your beneficiary sums equal the total estate.

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CALCULATING YOUR INCOME

Introduction
Every person in a modern economic society needs to learn how to manage their personal
finance. Good mathematical skills are essential for helping people to make sound
financial decisions. In this topic you will develop skills to earning and managing your
money.

Methods of payment
A payment received by an employee for doing a job is called income. There are any
different ways people are paid for performing a job. In this section we are going to look at
some of these methods of payment: salaries, wages and overtime.

1. Calculating Salaries
A salary is a fixed amount of money that is paid to employees to do their jobs. The amount
paid does not change, regardless of the number of hours worked. Salaries are usually
calculated on an annual basis. A salary is therefore usually stated as an amount per annum,
which means per year. Salaries are paid in weekly, fortnightly or monthly amounts. To
make calculations about salaries, you will need to remember the following information.
1 year = 52 weeks
= 26 fortnights
= 12 months

Examples

1. Farah works as an accountant and receives an annual salary of $46 800. Calculate the
amount that Farah is paid each fortnight.
Solution:
Fortnightly pay = $46 800 ÷26
i. Pay = $1800
2. Fatima is a health worker who is paid $3500 per month. Calculate Fatima’s annual salary.
Solution:
Annual salary = $3500 ×12
i. = $42 000
2. Adam works as a laboratory technician and is paid an annual salary of $41 560. If Adam
works an average of 42 hours per week, calculate his equivalent hourly rate of pay.
Solution:
Weekly pay = $41 560÷ 52
= $799.23
Hourly rate = $799.23 ÷42
= $19.03

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Exercises
1. Salah is paid a salary of $44 200 per annum. Calculate Salah’s fortnightly pay.
2. Maryam is paid a salary of $49 920 per annum. Calculate Maryam’s weekly pay.
3. Ruqiya is paid a salary of $54 000 per annum. Calculate Ruqiya’s monthly pay.
4. Weris works as an office secretary and is paid a salary of $38 740 per annum. Calculate
Weris’s pay if she is paid: (a) weekly (b) fortnightly (c) monthly.
5. Duran earns a salary of $43 000 per annum. He will be receiving an increment of 10% to his
annual salary at the beginning of next year. Calculate the amount Duran will be getting
next year as his annual salary.
6. Copy and complete the table below for food production employees.

Annual salary Weekly pay Fortnightly pay Monthly pay

$30 000
$39 500
$42 250
$54 350
$86 475

7. Mariam is paid a salary. She receives $460 per week. Calculate Mariam’s annual
Salary.
8. Mohamed receives $1250 per fortnight. Calculate Mohamed’s annual salary.
9. Bashir is paid monthly and receives $5800. Calculate Bashir’s annual salary.
10. Farhia receives a salary of $29 700 per annum. If Farhia’s works an average of 40 hours
per week, calculate the equivalent hourly rate of pay

2.Calculating wages

Most people in the workforce earn a wage. A wage is paid at an hourly rate. The hourly
rate at which a person is usually paid is called an ordinary rate. The wage for each week is
calculated by multiplying the ordinary rate by the number of hours worked during that
week. To compare two people’s wages, we can’t just look at the amount of money each
receives in a pay packet. We must also consider the number of hours each has worked.
Wages are compared by looking at the hourly rate.

To calculate the hourly rate of an employee we need to divide the wage by the number of
hours worked. Using a similar method we are able to calculate the number of hours
worked by an employee, given their wage and hourly rate of pay. The number of hours
worked is found by dividing the wage by the hourly rate. In some cases, wages are
increased because an allowance is paid for working in unfavorable conditions. An
allowance is an additional payment made when the working conditions are difficult or
unpleasant.

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Examples
1. Kassim works as a mechanic and is paid $13.65 per hour. Calculate Kassim’s wage in a
week where he works 38 hours.
Solution:
Wage = $13.65 × 38 = $518.70
2. Jama works 42 hours as a data entry operator for a computer company. His wage for the
week totaled $483.84. Calculate Jama’s hourly rate of pay.
Solution:
Hourly rate = $483.84 ÷ 42
a. = $11.52
3. Rayan is a road worker and is paid $9.45 per hour for a 35-hour week. For working on wet
days she is paid a wet weather allowance of 86c per hour. Calculate Rayan’s pay if for 12
hours of the week she works in the rain.
Solution:
Normal pay = $9.45 × 35 = $330.75
Allowance = $0.86 × 12 = $10.32
Total pay = $330.75 + $10.32 = $341.07
4. Ma’wa works as a casual waitress. Casual workers earn 20% more per hour than full-time
workers to compensate for their lack of holidays and sick leave. A full-time waitress earns
$14.45 per hour. Calculate the casual rate earned by casual waitresses.
Solution:

20% of $14.45 = 0.2 × 14.45 = $2.89

Casual rate = $14.45 + $2.89 = $17.34

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Exercises

1. Ali works in a newspaper printing mill and is paid $12.95 per hour. Calculate Ali’s wage in
a week where he works 40 hours.
2. Aisha is an apprentice chef. In the first year of her apprenticeship she earns $11.80 per hour.
Calculate Aisha’s wage in a week when she works:
a. 36 hours
b. 48 hours
3. Dahir is a fully qualified chef. He earns $432 in a week at a rate of $13.50 per hour.
Calculate the number of hours Dahir worked in the week.
4. Hassan works as an electrical linesman and is paid $10.94 per hour for a 38-hour week.
When he has to work at heights he is paid a 46c per hour ‘height allowance’. Calculate
Hassan’s pay in a week where 15 hours are spent working at heights.
5. Habiba works as an industrial cleaner and is paid $14.60 per hour for a 35-hour working
week. When Habiba is working with toxic substances she is paid an allowance of $1.08
per hour. Calculate Habiba’s pay if she works with toxic substances all week.
6. Rahma works as a tailor and earns $9.45 per hour.
a. Calculate Rahma’s wage in a week where she works 37 hours.
b. Zahra is Rahma’s assistant and earns $8.20 per hour. Find the least time Zahra must work if
she is to earn more money than Rahma does.
7. Timiro works 38 hours per week at $12.40 per hour.
a. Calculate Timiro’s weekly wage.
b. Zeynab earns the same amount each week as Timiro does, but Zeynab works a 40-hour
week. Calculate Zeynab’s hourly rate of pay.
8. Calculate the hourly rate of a casual worker who earns $250.80 for 20 hours work.
9. Duniya works 15 hours on weekends at $14.56 per hour. Calculate Duniya’s wage.
10. Dahabo earns $489.06 for a 38-hour working week. Calculate Dahabo’s hourly rate of
pay.

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3. Working overtime
Overtime is paid when a wage earner works more than the regular hours each week. When
an employee works overtime a higher rate is paid. This higher rate of pay is called a penalty
rate. The rate is normally calculated at either: time and a half, which means that the person
is paid 1½ times the usual rate of pay, or double time, which means that the person is paid
twice the normal rate of pay. A person may also be paid these overtime rates for working at
unfavorable times, such as at night or during weekends. To calculate the pay for a period of
time worked at time and a half or double time, we multiply the normal pay rate by the
overtime factor (either 1½ or 2) and then by the number of hours worked at that overtime
rate. Some examples will have more than one overtime rate to consider and some will
require you to work out how many hours have been worked at each rate.
Examples
1. Nur is paid $9.78 per hour in his job as a childcare worker. Calculate Nur’s hourly rate
when he is being paid for overtime at time and a half.
Solution:
Time and a half rate = $9.78 × 1.5 = $14.67
2. Idris works as a shop assistant and his normal rate of pay is $12.84 per hour. Calculate the
amount Idris earns for 6 hours work on Saturday, when he is paid time and a half.
Solution:
Pay = $12.84 × 1.5 × 6 = $115.56
3. Sarah is employed as a car assembly worker and is paid $10.40 per hour for a 36-hour
week. If she works overtime, the first 6 hours are paid at time and a half and the remainder
at double time.
Solution:
Calculate Sarah’s pay in a week where she works 45 hours.
Overtime = 45 - 36 = 9 hours
Time and a half = 6 hours
Double time = 3 hours
Sarah’s normal pay = $10.40 × 36 = $374.40
Pay at time and a half = $10.40× 1.5 × 6 = $93.60
Pay at double time = $10.40 ×2 ×3 =$62.40
Total pay = $374.40 + $93.60 + $62.40 = $530.40
4. Kafi works as a waitress and is paid $11.42 per hour. If she works 8 hours on a Sunday,
calculate Kafi’s pay when she is paid double time.
Solution:
Kafi’s pay on Sunday = $11.42 × 2 × 8 = $182.72

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Exercises
1. Hanaan is a casual worker at a motel. The normal rate of pay is $10.40 per hour. Hanaan
works 8 hours on Saturday for which she is paid time and a half. On Sunday she works 6
hours for which she is paid double time. Hanaan’s pay is equivalent to how many hours
work at the normal rate of pay?
2. Abdalla works as a train driver and is normally paid $11.48 per hour. For working on public
holidays he is paid double time and a half (overtime factor = 2½). Calculate Abdalla’s
hourly rate of pay on a public holiday.
3. Batula works a 35-hour week and is paid $14.15 per hour. Any overtime that Batula does is
paid at time and a half. Batula wants to work enough overtime so that she earns more than
$600 each week. What is the minimum number of hours that Batula will need to work to
earn this amount of money?
4. Zakariya works in a supermarket. He is paid at an ordinary rate of $8.85 per hour. If
Zakariya works more than 8 hours on any one day the first 2 hours are paid at time and a
half and the rest at double time. Calculate Zakariya’s pay if the hours worked each day
are:
Monday — 8 hours Tuesday — 9 hours Wednesday — 12 hours
Thursday — 7 hours Friday — 10.5 hours.
5. Kaltun works as a computer technician and is paid $18.56 per hour for a 38-hour working
week. For the first 4 hours overtime each week Kaltun is paid time and a half and the rest
is paid at double time. Calculate Kaltun’s pay in a week when she works for 45 hours.
6. Salah works on a car assembly line and is paid $12.40 for a 36-hour working week. The
first 4 hours overtime he works each week is paid at time and a half with the rest paid at
double time. Calculate Salah’s earnings for a week in which he works 43 hours.
7. Guleed works as a courier and is paid $13.25 per hour for a 35-hour working week.
Calculate Guleed’s pay for a week where he works 4 hours at time and a half and 2 hours
at double time in addition to his regular hours.
8. Adam works on the wharves unloading containers and is paid $14.20 per hour. Calculate the
number of hours at time and a half that Adam will have to work to earn the same amount
of money that he will earn in 9 hours at ordinary rates.
9. Isniino works in a shop and is paid $9.40 per hour. Calculate how much more Isniino will
earn in 8 hours work at time and a half than she would at ordinary rates.
10. Bakar works in a hotel and is paid $11.88 per hour. Calculate the total amount Bakar will
earn for an 8 hour shift on Saturday when he is paid at time and a half.

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Answers Payments(salaris)
1. Salah’s fortnightly pay = $44 200÷26 =$1700
2. Maryam’s weekly pay= $49 920÷52 = $960
3. Ruqiya’s monthly pay = $54 000÷12=$4500
4. Weris’s pay if she is paid:
(a) Weekly = $38 740 ÷ 52 = $745
(b) Fortnightly = $38 740 ÷ 26 = $1490
(c) Monthly = $38 740 ÷ 12 = $ 3228.33
5. Increment = 10% of $43 000 = 0.1 × $43000 = $4300
6. Duran’s salary next year = 43000 + 4300 = $47300

Annual salary Weekly pay Fortnightly pay Monthly pay

$30 000 $576.92 $1153.85 $2500.00
$39 000 $759.62 $1519.23 $3291.67
$42 250 $812.50 $1625.00 $3520.83
$54 350 $1045.19 $2090.38 $4529.17
$86 475 $1662.98 $3325.96 $7206.25

7. Mariam’s annual salary = $460×52 = $ 23920

8. Mohamed’s annual salary = $1250 ×26 = $ 32500
9. Bashir’s annual salary = $5800 × 12 = $69600
10. Farhia’s weekly pay= $29 700 ÷ 52 =$571.15
Hourly rate =$571.15÷40 = $14.28

Answers(Wages)
1. Ali’s wage in a week where he works 40 hours= 40 × $12.95 = $518
2. .Aisha’s wage in a week when she works:
a. 36 hours = 36× 11.80 = $424.80
b. 48 hours = 48 ×11.80 =$566.40
3. Number of hours Dahir worked in the week = $432÷ $13.50 = 32 hours
4. Hassan’s normal pay = $10.94×38 = $415.72
a. Height allowance = $0.46×15 = $6.9
b. Total pay = $415.72 +$6.9 = $422.62
5. Habiba’s normal pay = $14.60 ×35 = $511
a. Allowance = $1.08 × 35 = $37.8
b. Total pay =$548.80
6. a. Calculate Rahma’s wage in a week where she works 37 hours= $9.45×37 = $349.65
b. Least number of hours Zhong should work to earn same as Rema=$ 349.65÷$8.20=42.64
c. Least number of hours Zahra should work to earn more than Rahma = 43 hours
7. a. Timiro’s weekly wage = $12.40 × 38 = $471.20
b. Zeynab’s hourly rate = $471.20 ÷ 40 = $11.78
8. Hourly rate of the casual worker = $250.80 ÷ 20 = $12.54
9. Duniya’s wage= $14.56 ×15 =$218.40
10. Dahabo ’s hourly rate of pay= $489.06 ÷ 38 =$12.87

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Answers(Overtime)

1. Hanaan’s pay on Saturday = $10.40 ×1.5× 8 = $124.8

Jenny’s pay on Sunday = $10.40 ×2× 6 = $124.8
Jenny’s total pay =$124.8 +$124.8 = $249.6
Number of hours of work at the normal rate that earns $249.6 = $249.6÷$10.40 = 24 hours
2. Hassan’s hourly rate on a public holiday = $11.48 × 2.5 = $28.7
3. Batula’s normal pay = $14.15 × 35 = $495.25
Amount she needs more to earn $600 = $600 - $495.25 = $104.75
Batula’s overtime rate = $14.15 ×1.5 = $21.23
Number of hours Patricia needs to work overtime = $104.75 ÷ $21.23 =4.94 hours
Minimum number of hours Batula needs to work to earn more than $600= 35 + 5 = 40
hours
4. Zakariya’s pay on:
Monday= 8×$8.85 = $70.8
Tuesday=(8×$8.85) + (1×8.85×1.5) = $70.8 + $13.28 = $84.08
Wednesday = (8×$8.85) + (2×8.85×1.5) + (2×8.85×2) =$70.8 + $26.55 + $35.4=$132.75
Thursday = 7×$8.85 = $61.95
Friday = (8×$8.85) + (2×8.85×1.5) + (0.5× 8.85×2) = $70.8 + $26.55 + $8.85
= $106.2
Total pay = $70.8 + $84.08 + $132.75 + $61.95 + $106.2 = $455.78
5. Kaltun’s weekly pay = (38×$18.56) + (4×$18.56×1.5) + (3×$18.56×2) = $928
6. salah’s earnings for a week = (36×$12.40) + (4×$12.4×1.5) + (3×$12.40×2) = $595.2
7. Guleed’s pay = (35×$13.25) + (4×$13.25×1.5) + (2×$13.25×2) = $596.25
8. a. Adam’s normal pay for 9 hours = 9×$14.20 = $127.8
b. Overtime rate = 1.5×$14.20 = $21.30
c. Number of hours Eric needs to work at overtime rate = $127.8 ÷ $21.30 = 6
hours
9. a. Isniino’s normal pay for 8 hours = 8×$9.40 = $75.20
b. Isniino’s pay at time and a half for 8 hours = 8×$9.40×1.5 = $112.80
c. Amount of more money Stephanie will earn working overtime = $112.80 -
$75.20 =
$37.60
9. Bakar’s pay = 8 × $11.88 × 1.5 = $142.56

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4. TRADE DISCOUNT
What is a trade discount?
A trade discount is the amount by which a manufacturer reduces the retail price of a
product when it sells to a reseller, rather than to the end customer. The reseller then
charges the full retail price to its customers in order to earn a profit on the difference
between the amount by which the manufacturer sold the product to it and the price at
which it then sells the product to the final customer. The reseller does not necessarily
resell at the suggested retail price; selling at a discount is a common practice, if the reseller
wishes to gain market share or clear out excess inventory.

Example
Dahabshil offers its resellers a 30 percent trade discount. The retail price for a sack of rice
is $2. One reseller orders 500 sacks of rice, for which dahabshil Guleeds a 30% trade
discount. Thus, the total retail price of $1,000 is reduced to $700, which is the amount that
Dahashil bills to the reseller. The trade discount is therefore $300.
The trade discount may be stated as a specific dollar reduction from the retail price, or it
may be a percentage discount. The trade discount customarily increases in size if the
reseller purchases in larger quantities (such as a 20% discount if an order is 100 units or
less, and a 30% discount for larger quantities).
A trade discount may also be unusually large if the manufacturer is trying to establish a
new distribution channel, or if a retailer has a great deal of distribution power, and can
demand the extra discount.
A manufacturer may attempt to establish its own distribution channel, such as a company
website, so that it can avoid the trade discount and charge the full retail price directly to
customers. This can cause disruption in the distributor network, and also may not increase
company profits, since the company must now fulfill customer orders directly and provide
customer service, as well as maintain the distribution channel.
The seller would not record a trade discount in the accounting records. Instead, it would
only record revenue in the amount invoiced to the customer. If the seller were to record the
retail price as well as a trade discount on an invoice to a reseller, this would create an
unusually high gross sales amount in the income statement that might mislead any readers
of the financial statements into thinking that the manufacturer has higher sales volume
than is really the case (despite the presence of a large sales deduction for the trade
discount).

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1. Computing Trade Discount and Net Price

The list price, or catalog price of an item, is the price for which you can generally sell an
item. You can purchase the item at a trade discount, which is a discount off the list price.
The trade discount rate is the amount of the discount expressed as a percentage. The net
price is the price you actually pay for the item
Example
Find the net price.
Home Decor is purchasing a clock motor for a grandfather clock. The list price of the
motor is $499. Home Decor receives a 35 percent trade discount from the wholesaler.
What is the net price of the motor?
Solution:
1. Find the trade discount.
Trade Discount= List Price x Trade -Discount Rate
= $499 x 35% = $174.65
2. Find the net price.
Net Price = List Price - Trade Discount
= $499 - $174.65 = $324.35 net price
Exercises
1. Find the trade discount and the net price. Round to the nearest cent.
List Price Trade Discount Trade Net Price
Rate Discount
$ 250.00 30% a. B
$ 975.00 40% a B
$ 732.00 27.5% a B
$ 489.2.00 37.2% a B

2. The catalog price for a refrigerator is $1,249. The manufacturer offers its resellers a 25
percent
trade discount. What is the reseller’s net price for the refrigerator?
3. Bridal Bouquets placed an order for 75 dozen roses from Wholesale Florists. A dozen roses
have a list price of $14.29. If the wholesaler offers Bridal Bouquets a 22.5 percent trade
discount, what is the net price for the order?
4. Custom Greetings places an order for 500 reams of card stock paper. Its supplier offers
Custom Greetings a 35 percent trade discount. If a ream of paper has a list price of $5.89,
what is the net price of Custom Greetings’ order?
5. Wholesale Gardening offers its distributors a trade discount of 20 percent on all plants, and
30 percent on all trees. Maple trees have a list price of $24.95. Geranium plants have a
catalog price of $3.50. Landscape King places an order for 50 maple trees and 100
geraniums. What is the net price of the order?
A. $20.27 B. $1,118.25 C. $1,153.25 D. $1,278.00

2. Calculating the Net Price Using the Complement Method

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Another way of finding the net price is the complement method. The complement of your
trade discount rate is 100 percent minus the discount rate. This is sometimes called the
net-price rate. You can multiply the list price by the complement to find the net price.
Net Price = List Price x Complement of Trade - Discount Rate
Example

Find the net price.

Home Décor is purchasing a clock motor for a grandfather clock. The list price of the
motor is
$499. Home Décor receives a 35 percent discount from the wholesaler. What is the net
price of
the motor?
Solution:
1. Find the complement of the trade - discount rate.
100% - 35% = 65%
2. Find the net price.
Net Price = List Price x Complement of Trade - Discount Rate
$499 x 65% = $324.35 net price

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Exercise
1. Find the complement of the trade-discount rate and the net price. Round to the
nearest cent

List Price Trade Discount Compliment Net Price

Rate
$ 500 30% a. B
$ 985.00 25% a B
$ 418,00 32.5% a B
$ 133.67 22.75% a B

2. The catalog price for a washer is $999. The manufacturer offers its resellers a 25 percent
trade discount. What is the complement of the trade discount?
3. Bridal Bouquets placed an Easter order for 150 lilies from Wholesale Florists. Each lily has
list price of $5.49. The wholesaler gives Bridal Bouquets a 22.5 percent trade discount.
What is the net price for the order?
4. Custom Greetings places an order for 500 reams of card stock paper. Its supplier offers
Custom Greetings a 35 percent trade discount. A ream of paper has a list price of $5.89.
What is the complement of the trade discount?
5. Wholesale Gardening offers its distributors a trade discount of 20 percent on all plants, 25
percent on all bushes, and 30 percent on all trees. Maple trees have a list price of $24.95.
Lilac bushes list for $15.85. Geranium plants list for $3.50. Landscape King places an
order for 50 maple trees, 75 lilac bushes, and 100 geraniums. What is the net price for the
lilacs?
A. $2,044.81 B. $11.89 C. $1,188.75 D. $891.56

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3. Determining the Trade-Discount Rate

If you know both the list price and the net price, you can easily determine the trade-
discount
rate, which is the amount of the discount of an item expressed as a percentage of the list
price.

Trade Discount Rate = Trade Discount

List Price
Example
Find the trade discount rate.
Antique Wholesalers lists a grandfather clock motor in its catalog for $499. The net price
to the retailer, Home Décor, is $350. What is the trade discount rate?

Solution:
1. Find the trade discount.
Trade Discount = List Price - Net Price
= $499 - $350 = $149
2. Find the trade-discount rate.
Trade Discount Rate = Trade Discount ÷ List Price

= $149 ÷ $499 = 29.86% trade-discount rate

Exercises
1. Find the trade discount and the trade-discount rate. Round to the nearest hundredth
percent.

List Price Net Price Trade Trade Discount

Discount Rate
$ 65.00 50% a. B
$ 115.00 98% A B
$ 198,00 142.5% A B
$ 237.75 176.56% A B

2. A washing machine lists for $999. The manufacturer offers its resellers a net price of $649.
What is the trade-discount rate for the washing machine?
3. Bridal Bouquets placed an Easter order for 150 lilies from Wholesale Florists. Each lily has
a list price of $5.49 and a net price of $4.29. What is the trade-discount rate?
4. Custom Greetings placed an order for 500 reams of card stock paper. Its supplier offers the
paper at a list price of $5.89 per ream and a net price of $4.50. What is the trade-discount
rate for the paper?
5. Wholesale Gardening lists maple trees for $24.95, lilac bushes for $15.85, and geranium
plants for $3.50. Landscape King receives a net price of $18.75 on maple trees, $12.19 on
lilac bushes, and $2.75 on geranium plants. What is the trade-discount rate for the lilac
bushes?
A. 23.95% B. 24.85% C. 23.09% D. 21.43%

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4. Determining final net price after chain of discount

A chain discount is a series of trade discounts. You don’t simply add up the discounts to
get the chain discount. You must calculate each discount individually on the new net
price from the previous discount.
Example
Find the final net price.
Home Décor has a grandfather clock in stock it wants to clear out. The clock originally
sold for $1,585. Home Décor is offering a discount of 25 percent less 15 percent, also
written as 25/15. What is the final net price of the grandfather clock?
1. Find the first discount.
$1,585 X 25% = $396.25
2. Find the first net price.
$1,585 - $396.25 = $1,188.75
3. Find the second discount.
$1,188.75 X 15% = $178.31
4. Find the final net price.
$1,188.75 - $178.31 = $1,010.44 final net price
Exercises
1. Find the first discount, the first net price, the second discount, and the final net price.

Chain First First Net Second Final Net

List Price Discount Discount Price Discount Price
$750.00 a. b. c. d.
25% less
20%
$ 1,275.00 35% less a. b. c. d.
35%
$ 1,988.00 20% less a. b. c. d.
20%
$ 627.46 15% less a. b. c. d.
10%
2. Wholesale Florists has several dozen roses left over from Eids’ Day. It offers Bridal
Bouquets a chain discount of 15/15. If a dozen roses listed for $24.95 and Bridal Bouquets
places an order for 75 dozen, what is the net price of the order?
3. Custom Greetings places an order for 500 reams of card stock paper. Its
supplier offers a chain discount of 25 percent less 15 percent. The paper has a catalog
price of $5.89 per ream. What is the net price of the paper?
4. Wholesale Gardening lists maple trees for $24.95, lilac for $15.85, and geranium
plants for $3.50. It’s offering a chain discount of 15 percent less 10 percent less 5
percent. Chief Ali orders 50 maple trees, 25 lilac bushes, and 75 geraniums. What is
the net price?
A. $1,906.25 B. $1,458.28 C. $1,385.37 D. $1,334.37

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5. Proving the final net Price with the compliment method

The complement method can also be used with chain discounts. First subtract each
discount from 100 percent to find its complement. Then multiply the complements to find
the percent you actually pay, which is the net-price rate. The complement method can
also be used to find the dollar amount of the discount. Multiply the single equivalent
discount (SED), or the complement of the net-price rate, by the list price to find the
discount.
SED = Complement of Net- Price Rate
Discount = List Price X SED

Example
Find the final net price.
Home Décor has a grandfather clock in stock it wants to clear out. The clocks originally
sold for $1,585. Home Décor is offering a discount of 25 percent less 15 percent, also
written as 25/15. What is the final net price of the grandfather clock?
1. Find the complements.
Complement of 25% is 75%.
Complement of 15% is 85%.
2. Find the net-price rate.
Net Price Rate = Product of Complements of Chain - Discount Rates
75% X 85% = 63.75%
3. Find the net price.
Net Price = List Price X Net-Price Rate
$1,585 X 63.75% = $1,010.44 net price

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Exercises
1. Find the net-price rate, the net price, the SED, and the discount.
Chain Net-Price
List Price Discounts Rate Net Price SED Discount
$ 750.00 25%/1 0% a. b. c. d.
925.00 30%/20% a. b. c. d.
1,082.00 20%/15% a. b. c. d.
1,319.95 35%/25% a. b. c. d.

2. Custom Greetings places an order for 500 reams of card stock paper. Its supplier offers a
chain discount on the paper of 25 percent less 15 percent. The paper has a list price of
$5.89 per ream. What is the SED? What is the total discount on the order?
3. Wholesale Gardening lists maple trees for $24.95, lilac bushes for $15.85, and geranium
plants for $3.50. It’s offering a chain discount of 15 percent less 10 percent less 5
percent. Chief Ali orders 50 maple trees, 25 lilac bushes, and 75 geraniums. What is
the total discount on the order?
a. $1,906.25 B. $571.88 C. $1,385.37 D. $520.88

6. Computing the Cash Price with an Ordinary Dating Discount

An invoice gives the details of each purchase you make from a supplier. As an incentive to
pay early, the supplier may offer a cash discount if the bill is paid within a certain number
of days. The exact terms of the discount are stated on the invoice. Many suppliers use
ordinary dating. If the invoice says 2/10, net 30 (or 2/10, n/30), that means there is a 2
percent cash discount if paid within 10 days and the net price must be paid within 30
days.
Example
Find the cash price.
Home Décor received an invoice from its supplier. The net total for a grandfather clock
was $1,375 and payment terms stated 2/15, net 30. What is the cash price of
the clock if Home Décor pays within 15 days?
1. Find the cash discount. $1,375 X 2% = $27.50
2. Find the cash price.
Cash Price = Net Price - Cash Discount OR
Cash Price = Net Price X Complement of Cash-Discount Rate $1,375 - $27.50 =
$1,347.50 cash price

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Exercises
1. Find the last date to take the discount, the last day to pay the invoice, the cash discount,
and the cash price.

Last Last
Date to Date Cash
Invoice Date Net Discoun Cash
Date Terms Take to Pay Paid Price t Price
3/15 2/10, n/30 Discoun
a. Invoice
b. 3/21 $ 291.00 c. d.
4/12 2/15, n/30 a. b. 4/27 547.50 c. d.
5/7 1/15, n/30 a. b. 5/24 382.44 c. d.
6/21 3/10, n/30 a. b. 7/1 1,934.75 c. d.
2. Wholesale Florists sent Bridal Bouquets an invoice for $395 with payment terms of 2/10,
1/20, net 30. The invoice is dated 5/15. What is the cash price if Bridal Bouquets pays
the invoice on 5/24? What is the cash price if it pays it on 5/31?
3. Wholesale Gardening lists maple trees for $24.95. It offered Landscape King a chain
discount of 15 percent less 10 percent. Chief Ali ordered 50 maple trees and received an
invoice dated 5/25 with payment terms of 3/10, net 30. What was the cash price if the
invoice is paid on June 4?
A. $1,247.50 B. $954.34 C. $925.71 D. $907.56

7. Computing the Cash Price with an End-of-Month Dating Discount

Instead of ordinary dating, some suppliers use end-of-month dating (EOM) when
granting cash discounts. With this method, you receive a cash discount if you pay
within a certain number of days after the end of the month. The full amount is usually
due 20 days after the last day for taking the discount. With EOM dating, it is common
to grant a 1-month extension on invoices dated on or after the 26th of the month.
Example
Find the cash price.
Home Décor received an invoice from its supplier. The net total for a grandfather clock
was $1,375 and payment terms stated 3/10 EOM. The invoice was dated 9/15. What is
the cash price of the clock if Home Décor pays on 10/9?
1. Find the cash discount.
Cash Discount = Net Price X Cash-Discount Rate $1,375 X 3% = $41.25 cash discount
2. Find the cash price.
Cash Price = Net Price - Cash Discount $1,375 - $41.25 = $1,333.75 cash price

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Exercises
1. Find the last date to take the discount, the last date to pay the invoice, the cash
discount, and the cash price.
Last Last Cash
Invoice Date Net Discoun Cash
Date to Date
Date Terms Paid Price t Price
Take to Pay
Jan. 24 2/10 a. b. Feb. 9 $ 750.00 c. d.
Feb. 18 EOM
2/15 a. b. Mar. 15 1,200.00 c. d.
Apr. 21 3/10
EOM a. b. May 11 2,750.00 c. d.
EOM sends Bridal Bouquets an invoice for $395 with payment terms of 3/15
2. Wholesale Florists
EOM. The invoice is dated 5/15. What is the cash price if Bridal Bouquets pays the
invoice on 6/14? What is the cash price if it pays it on 6/16?4. 3. Wholesale Gardening
lists maple trees for $24.95. It offered Landscape King a chain discount of 15 percent less
10 percent. Chief Ali ordered 50 maple trees. It received an invoice dated 5/26 with
payment terms of 3/15 EOM. What is the cash price if the invoice is paid on July 16?
A. $925.71 B. $954.34 C. $935.63 D. $907.56
Chapter Review
Chapter Review
By taking advantage of a supplier’s trade discounts, chain discounts, and invoice dating
discounts, you save money. By doubling or tripling these discounts, you maximize your savings.
Let’s see how.
1. Your supplier, Daldhis business, offers a trade-discount rate of 15 percent on all widgets.
Each widget has a list price of $9.79. What is the net price of your order if you purchase 50
widgets?
2. What is the complement of the trade-discount rate in Problem 1?
1. Daldhis business is coming out with a new and improved line of widgets. To make room for
its new stock, it’s offering a 20/15 chain discount on its current widgets. The widgets cost
$8.79 each. You order 50 of them. What is your final net price?
3. What is the net-price rate of the discounts outlined in Problem 3?
4. What is the SED for Problem 3?
5. What is the discount for Problem 3?
6. You receive an invoice for the order you placed in Problem 3. It is dated 4/27 and has
payment terms of 2/10, net 30. If you pay the invoice on May 6, what is your cash price?
2. Instead of 2/10, net 30, the invoice in Problem 7 has payment terms of 2/10 EOM. By what date
must you pay the invoice to receive the discount? What is the last day you can pay it?

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