2019

MATHEMATICAL LITERACY

FINANCE REVISION
MANUAL

Section Level 1: Knowing
Financial documents and tariff * Read information directly from
systems an electricity bill (e.g. date; name
of account holder; electricity
consumption for the month; etc.
* Show how the 'Total Due' on the
electricity bill has been calculated
by adding together all items listed
on the bill.
* Show how the VAT value listed
on the electricity bill has been
calculated when told that VAT is
14% of the value excluding VAT
(that is, calculating a direct
percentage of an amount).
Income, expenditure, profit/loss, * Classify items on an income and
income- expenditure statements expenditure statement as fixed,
and budgets variable and occasional income and
expenditure.
* Show how total income,
expenditure and profit/loss values
on an income and expenditure
statement or budget have been
determined.
Cost price and selling price * Determine the cost price of an
item by adding together given cost
values for the component parts of
the item.
* Determine the income generated
from the sale of an item based on a
given sales price and given sales
volumes.
TOPIC: FINANCE
Level 2: Applying routine
procedures in familiar contexts
* Use a given formula to show how
the amount charged for electricity
consumption shown on the bill has
been determined.
* Complete a table of values to
show the cost of various quantities
of electricity consumption.
* Use the table of values to
construct a graph to represent the
cost of electricity consumption.
* Increasing/Decreasing by a given
percentage
* Construct an income and
expenditure statement for an
individual or a household.
* Construct a budget for a small
household project.
* Compare the difference between
the cost and selling price of an item
by calculating the percentage mark-
up in price of the selling price from
the cost price.
* Construct a table of values to
show how the cost price of an item
changes depending on the number
of items made.
* Draw a graph from a given table.
Level 3: Applying multi-step
procedures in a variety of
contexts
* Replicate the calculations/values
shown on the bill for a different
electricity consumption value.
* Without any scaffolded or
guiding questions, draw a graph to
represent the cost of electricity on a
particular electricity system.
* Construct an income and
expenditure statement for a
business that includes a comparison
of income and expenditure values
over a two-year period.
* Construct a budget for a large
fundraising event.
* Revise a budget if conditions
change
* Draw graphs, without scaffolded
or guiding questions, to show the
costs involved in producing an item
and money generated from the sale
of the item.
* Investigate, through research, the
various costs involved in
manufacturing an item, and decide
on an appropriate selling price for
the item.
Level 4: Reasoning and reflecting
* Choose an appropriate strategy
(e.g. tables of values, graphs,
interpreting points of intersection,
etc.) to compare the electricity costs
for two different electricity systems
and make a decision about which
system is the most cost effective for
a user with particular needs.
* Analyse a newspaper article
describing proposed increases in
electricity tariffs and make
deductions about the implications
of these increases for consumers.
* Rework the answer if the initial
conditions change.
* Analyse a budget for a household
or business and make
recommendation as to how the
expenditure should be changed to
improve the finances of the
household/business.
* Compare income and expenditure
values for a business or
organisation over a two-year period
and describe differences and/or
trends.
* Analyse projected versus actual
budget values and explain
differences.
* Conduct market research on a
group of people and use the results
of the research to defend a
particular selling price for a
product.
* Interpret graphs showing the cost
of production and income generated
from the production and sale of an
item, and use the graphs to make
decisions about the business (e.g.

Break-even analysis * Define 'break-even' in the context
in which a problem is posed (e.g. in
the context of a business, 'break-
even' refers to the income that must
be generated to cover all expenses).
Interest, bank loans and * Define 'interest' and the 'interest
investments rate'.
* Identify interest rate values
quoted on bank statements.
Inflation * Define the term 'inflation'.
* Determine the break-even point
of a business from a given table of
income and expenditure values.
* When given two graphs that
intersect, read off the value of the
independent and dependent
variables at the break-even point
(point of intersection) of the
graphs.
* Perform simple interest
calculations manually (that is,
without the use of a calculator)
over multiple time periods.
* Read values off graphs showing
simple and compound investment
scenarios.
* Calculate compound interest
compounded annually.
*Increase or decrease a given
amount by a certain percentage.
* Show by calculation how the
price of an item might change if
affected by inflation (that is,
increasing a value by a percentage).
3
* Calculate profit if only one of
income or expenses is given and
the other still needs to be
calculated.
* Draw two or more graphs and
identify the point of intersection of
those two graphs in order to
compare different options (e.g.
income vs. expenditure; cellphone
contract options; electricity tariff
systems; etc.).
* Perform compound interest
calculations manually (that is,
without the use of a formula) over
multiple time periods.
* Complete a table that models a
loan scenario and include
consideration of a monthly interest
calculation, monthly repayment,
and monthly amount outstanding
on the loan.
* Draw graphs from given tables of
values to represent loan scenarios.
* Calculate compound
growth/decline
* Calculate compound
growth/decline.
how many items must be
manufactured and sold to cover all
production costs).
* Explain the relevance of the
break-even point of two graphs in
relation to the problem or context
for which the graphs have been
drawn.
* Explain the meaning of different
regions on a graph (that is, between
different points of intersection) in
relation to the problem or context
for which graphs have been drawn.
* Rework the answer if the initial
conditions change.
* Construct a model of a loan or
investment scenario without
scaffolded or guiding questions.
* Investigate and describe the
impact of increasing the monthly
repayments on the total cost of the
loan/investment.
* Investigate and describe the
impact of making a lump sum
payment into a loan/investment
during the first half of the
loan/investment period on the total
cost of the loan/investment.
* Rework the answer if need be.
* Show by calculation how the
price of an item might change if
affected by inflation over multiple
time periods
* Use knowledge of inflation rates
to argue and justify a particular
salary
* Rework the answer if the initial
conditions change.
Taxation * Identify the name of the
employee listed on a pay slip and
the month for which the pay slip
has been issued.
* Identify the employee's monthly
salary.
* State how the employees 'taxable
income' has been determined by
referring to the salary and
deduction values shown on the
payslips.
* Define the terms 'gross pay', 'net
pay', 'deductions', and 'taxable
income' shown on a payslip.
Exchange * Identify the exchange rate
rates between two currencies from a
given table or rate board.
* Read appropriate tax values from
given income tax deduction tables.
* Identify the income tax bracket
into which an individual falls based
on a given monthly and/or annual
income.
* Use a given exchange rate to
determine the value of one currency
for a specific quantity of another
currency.
4
* Use formulae provided on income * Compare income tax tables over
tax bracket tables to calculate an different financial periods and
individual's annual and monthly explain how an individual's tax may
income tax. have changed from one period to
* Investigate through calculation another.
how the tax rebate value is * Investigate the effect that an
determined. increase in salary has on increased
* Calculate compound tax payments.
growth/decline. * Analyse graphs showing changes
in income tax over different time
periods and explain differences
* Perform currency conversion * Explain how the Big Mac Index'
calculations, taking into account provides a tool for determining the
currency exchange fees charged by worth of one currency in relation to
banks and other financial another currency;
institutions. * Explain why it is not necessarily
accurate when a South African
tourist in America exclaims that a
can of cool drink that costs $2,00
(R14,00) is much cheaper in South
Africa.
UNIT 1 : FINANCE

Question 1(EC Prep P1 2018)

1.1 The tablebelow shows an income and expenditure statement of John’s Vegetable Stall in a
small town in the Eastern Cape. The statement shows a comparison of budgeted and actual
values for the year 2017.

John’s Vegetable Stall

Budgeted and Actual values for the year 2017 (Values in Rand)
ITEM INCOME BUDGET DIFFERENCE
Vegetables (Type S) sales 3 250 2 750 500
Vegetables (Type T) sales 4 500 4 200 300
Additional income from air time 1 200 1 000 200
sales
Total Income A 7 950 1 000
EXPENSES BUDGET VARIANCE
Vegetables (Type S) costs 1 440 1 500 B
Vegetables (Type T) costs. 2 600 C 200
Airtime 1 000 1 000 0
Delivery 800 880 (80)
Total Expenses 5 840 5 780 60
Net profit (Loss) 3 110 2 170 940

1.1.1 Calculate the value of A. (2)

1.1.2. Determine the value of B. (2)

1.1.3 Calculate the budgeted value C for the Vegetables type T. (2)

1.1.4 Identify the item within the ‘Expenses’ which could have been the main cause for
the business to declare less profit. (2)

1.2 Mrs John, 68 years old, is a consultant at ABC company and earns a monthly gross salary of
R65 000. She earns a performance bonus of 75 % of her monthly salary in December. Her
pension contribution is 7,5% of her monthly gross salary and she pays R1 050 per month to
the medical aid fund which covers her and her spouse.

1.2.1 Calculate Mrs John’s annual gross salary. (2)

1.2.2 Calculate Mrs John’s annual pension fund contribution. (2)

1.2.3 Calculate Mrs John’s annual medical aid fund contribution. (2)

1.2.4 Show that Mrs John’s performance bonus is R48 750. (2)

1.2.5 Determine Mrs John’s annual taxable income. (4)

1.3 The tablebelow shows the income tax brackets for the 2016/2017 financial year.

INCOME TAX FOR 2016/2017 FINANCIAL YEAR

Taxable Income (Rand) Rates of tax
(Rand)
R0–R188 000 18% of each R1
R188 001–R293 600 R33 840 + 26% of the amount above R188 000
R293 601–R406 400 R61 296 + 31% of the amount above R293 600
R406 401– R550 100 R96 264 +36% of the amount above R406 400
R550 101– R701 300 R147 996+ 39% of the amount above R550 100
R701 301 and above R206 964 +41% of the amount above R701 300

REBATES TAX THRESHOLD

Primary: R13 500 Below age 65: R75 000
Secondary: R7 407 Age 65 and over: R116 150
Tertiary: R2 466 Age 75 and over: R129 850

Use the tableand the information in QUESTION 1.2 to answer the questions that

1.3.1 Identify the tax bracket in which Mrs John’s income falls. (2)

1.3.2 Calculate the rebate Mrs John will receive. (2)

1.3.3 Calculate the actual tax to the nearest rand that Mrs John will pay for the
2016/2017 financial year. You may use the formula:
Actual tax = Income tax calculated on taxable income – Rebate (4)

1.3.4 Hence, calculate Mrs John’s net annual salary. You may use the formula:
Net annual salary = Gross annual income – Total annual deductions (3)

1.4 Mr Mana took out a loan of R400 000 from DFK Bank to fund his phone business. The
loan was offered at an interest rate of 15,5% per annum compounded annually.

1.4.1 Calculate, without the use of a formula, the interest Mr Mana will have to pay
for two years. (4)

1.4.2 Mr Mana specialises in two types of phones: Phone D and Phone E, that are
imported from China at a cost price of R1 750 and R2 000 respectively. The
prices include VAT of 15% (Value Added Tax). Calculate the VAT amount on
Phone D. (3)

1.4.3 He buys the phones in a ratio Phone D: Phone E = 3: 2.

Determine the number of Phone E’s on an invoice with an order of 60 Phone
D’s. (2)

1.4.4 Calculate the total cost of Phone D’s and Phone E’s he bought. (3)

1.4.5 Convert the total cost of the phones in Chinese Yuan.

Use the exchange rate: R1 = 0,52709 Chinese Yuan (CNY) (3)
[46]

6
Question 2 (EC Prep P2 2018)

2.1 A family with five people are living in a water-restricted area in Johannesburg where they
can use 87 litres of water per person per day from the municipality. They have decided to
install eco-water storage tanks to be able to use 250 litres per person per day. The family
uses 87 litres per person of water from the municipality and uses the extra amount from the
water tanks. They have two water tanks with dimensions as shown in the table below.

TANK Diameter in millimetres Height in millimetres

A 1 050 1 420
B 1 800 2 100

NOTE: Two tanks with dimensions as shown have been installed at their house.

2.1.1 How many litres of water in total do they use per month (30 days) from the
municipality and from the tanks? (5)

2.1.2 Use TABLE 2, the water tariff charges, below to answer the question.

[NORMAL WATER TARIFF CHARGES FOR JOHANNESBURG IN

2016/2017]
Tariff Summary (in kilolitre) Tariff Rand per kilolitre
(without VAT)
0 – 6 kℓ Free
7 – 10 kℓ R7,14
11 – 15 kℓ R12,07
16 – 20 kℓ R17,65
21 – 30 kℓ R24,03
31 – 40 kℓ R25,81
> than 40 R32,27
[Source: www.johannesburgwater.co.za]
Conversion: 1 kℓ = 1 000 litres

The family states that, if the water per person (number of litres) used from the water
tank were charged using the normal municipality tariffs, they would be paying more
than R300 including VAT (14%) for the water bill. Verify, with the necessary
calculations, whether their statement is valid or not. (9)

2.2 In a no fee school, book packs (stationary) are supplied to Grade 10, 11 and 12 learners in
the ratio 5 : 3 : 2. There are different stickers for each of these grades; blue for Grade 10,
beige for Grade 11 and green for Grade 12. Each book pack cost R320,00 including VAT
(15%).

2.2.1 The Grade 10 learners received 250 book packs. How many packs were supplied for
the whole school? (5)

2.2.2 A government official states that the 15% VAT charged on the total number of book
packs is more than the total cost of 50 book packs. Verify, with calculations to show
whether the statement is valid or not. (7)

2.2.3 Determine the probability of randomly choosing a book pack belonging to either
Grade 11 or Grade 12. Give your final answer as a percentage (3)
[29]

7
QUESTION 3 (DBE Final P1 2018)

3.1 ANNEXURE A shows the student fees statement for Tamryn Abrahams, a second- year
Architecture student at the University of Cape Town (UCT).

Use ANNEXURE A to answer the questions that follow.

3.1.1 Explain the meaning of the term interest with reference to the student fees
statement. (2)

3.1.2 Write down the balance (excluding interest) that was brought forward on the last
day of the previous year. (2)

3.1.3 Calculate the monthly interest rate that was used on the overdue fees for the
previous year. (3)

3.1.4 Write down the code and the name of the module/course that is the most expensive. (2)

3.1.5 Show how the amount of R6 317,70 was calculated. (2)

3.1.6 Calculate the total amount debited to this account for the courses studied in the
2017 academic year including interest on overdue fees in 2017. (3)

3.1.7 State the payment method used to transfer money into this account. (2)

3.1.8 A family friend paid the balance of R40 386,60 on condition that the amount could
be paid back in equal monthly instalments, interest free.

Show how the monthly instalment of R8 077,32 was calculated if the first payment
was due on 1 November 2017 and the last payment was due on 1 March 2018. (2)

The graph below shows the effect of inflation from 2015 going back 50 years.

3.2
VALUE OF A TROLLEY COSTING R1 000 IN 2015
R1 000,00
1000
Cost in rand (R)

800 R701,00
R557,00
600
R418,00
400 R291,00
200 R85,00
R14,00 R26,00
0
1965 1975 1985 1995 2000 2005 2010 2015
Years

8
 Below are certain South African items and their prices for the years 1970 and 2015.
PRICE IN 1970 PRICE IN 2015

Spur burger R0,30 R62,90

Cheddamelt steak R0,50 R104,90

Ricoffy 750 g R0,25 R75,00

Nestlé condensed milk R0,10 R19,00

[Source: www.inflation.eu]

Use the information above to answer the questions that follow.

3.2.1 Explain the term inflation within the given context. (2)

3.2.2 Write down the price of a Spur burger in 1970. (2)

3.2.3 Calculate by how much the cost, in rand, of a trolley had increased from 2000 to
2005. (3)

3.2.4 Calculate the percentage increase of Ricoffy from 1970 to 2015.

You may use the following formula:
new amount  original amount
Percentage increase   100 %
original amount (3)

3.2.5 A cheddamelt steak was sold for R104,90 at a percentage profit of 17,5%.
Determine the cost price. (2)

3.3 TABLE 3 below shows the national budget and education budget of South Africa for 2017/18.
TABLE 3: NATIONAL BUDGET AND EDUCATION BUDGET OF
SOUTH AFRICA FOR 2017/2018
NATIONAL BUDGET OF EDUCATION BUDGET OF
SOUTH AFRICA (IN RAND) SOUTH AFRICA (IN RAND)
Economic affairs and 241,6 billion Basic education 216,7 billion
agriculture
Defence and public safety 198,7 billion University subsidies 31,6 billion
Health 187,5 billion Education administration 15,8 billion
General admin 70,7 billion Skills development levy 21,1 billion
institutions
Local development and 195,8 billion National student financial aid 15,3 billion
infrastructure scheme (NSFAS)
Debt service costs 162,4 billion Technical and vocational 7,5 billion
education and training
Social protection 180,0 billion Other 12,5 billion
Education 320,5 billion

9
 [Adapted from www.graphics24.com]
Use TABLE 3 above to answer the questions that follow.

3.3.1 Which of the amounts below represents the economic affairs and agriculture budgets?

A 24 160 000
B 241 600 000 000
C 241 600 000
D 24 160 000 000 000 (2)

3.3.2 Explain the term budget within the context above. (2)

3.3.3 Write down the item which receives the third most money from the education
budget. (2)

3.3.4 Calculate the percentage of the total education budget that is allocated to the NSFAS. (3)

3.3.5 University subsidies comprise about 9,86% of the total education budget. Estimate
the combined budget, as a percentage, for education administration and the NSFAS. (2)
[41]

QUESTION 4 (DBE Final P2 2018)

4.1 Mapotjo plans to purchase a bakkie (motor vehicle). She received the following
quotation from a car dealer on 28 February 2018:

Extract of a quotation for a bakkie from a dealer:

Rand (R)

Selling price (excluding VAT) without accessories (extras) 160 087,72

Discount 6 140,00

ACCESSORIES (EXTRAS)

Smash-and-grab film 3 500,00

Door protector 3 500,00

OTHER CHARGES
On-road charges 4 298,25
Transaction fee 1 315,79

SUBTOTAL 166 561,76

VALUE-ADDED TAX 14%
TOTAL DUE 189 880,41
[Source: Group 1 Nissan and The Glen]
Use the information above to answer the questions that follow.

4.1.1 Calculate (rounded off to ONE decimal place) the percentage discount given on
the bakkie's selling price, excluding VAT. (3)

4.1.2 Show how the amount of R166 561,76 was calculated. (3)

10
 4.1.3 Give ONE reason why customers would prefer to install the accessories (extras), as
shown in the quotation. (2)

4.1.4 Mapotjo has an investment of R1,25 million. The money was invested as follows:

 Twenty-seven (27) months investment period

 6% interest per annum, compounded annually

Show whether the interest earned on this investment is sufficient to cover the total
purchase price of R189 880,41. (9)

4.1.5 VAT in South Africa increased to 15% with effect from 1 April 2018.

The following shows how the dealer calculated the new increased VAT incorrectly:

Selling price, including 14% VAT = R160 087,72 + 14% of R160 087,72
=R160 087,72 + R22 412,28
=R182 500
VAT increased with 1%.
New selling price, including 15% VAT = R182 500 + R182 500 × 1%
= R182 500 + R1 825
= R184 325

Identify the mistake the dealer has made in calculating the new selling price. Hence,
calculate the new selling price, including 15% VAT (excluding accessories and other
charges). (4)

4.2 Nomsa plans to visit Los Angeles for an educational conference. She will be travelling from her
hotel to the conference venue with an Uber taxi.

An Uber taxi is operated using two options, as shown below.

Option 1: UPFRONT fare = base fare (call-out fee) + (number of miles × per mile fare)

Option 2: POST-TRIP fare

= (number of minutes × per minute fare) + (number of miles × per mile fare)

TABLE 2 below shows the different Uber taxis and their respective rates in Los Angeles for both
UPFRONT and POST-TRIP fare options, including an example of a 10-mile trip using the
UPFRONT fare option.

TABLE 2: RATES FOR UBER TAXIS IN LOS ANGELES FOR UPFRONT AND
POST-TRIP FARE OPTIONS
COST UberX UberBLACK UberLUX
Base fare (call-out fee) $0,00 $ 8,00 $20,00
Per minute fare $0,15 $ 0,45 $ 0,60
Per mile fare $0,90 $ 3,55 $ 5,00
*Minimum fare $4,65 $15,00 $30,00
Cancellation fee $5,00 $10,00 $10,00
Total fare (for a 10-mile trip
$9,00 $43,50 B
using the UPFRONT option)
[Adapted from www.uber.com, March 2016]
*Minimum fare: the lowest fare one would be charged per trip

11
 Use the information above to answer the questions that follow.

4.2.1 Calculate the missing value B. (3)

4.2.2 Calculate (rounded off to the nearest mile) the maximum distance for which a
person can use the UberX taxi if you pay the minimum upfront fare. (4)

4.2.3 Nomsa travelled a distance of 29,73 miles with UberBLACK. The

post-trip fare option was used and the trip took 1 hour and 9 minutes to complete.

Nomsa stated that she would have saved more than $20,00 if she had used the
upfront fare option.

Show, with calculations, whether her statement is correct. (8)

4.2.4 Explain the importance of a cancellation fee for the Uber service provider. (2)
[38]

QUESTION 5 (WC Prep P1 2018)

5.1 Tebogo is a client of BOMA Bank. She received her monthly bank statement for transactions she
has made in May 2018. Tebogo's statement for May 2018 is given below.

BANK STATEMENT
BOMA Bank
M Cell Cellular Shop Fourways Branch
Shop 10 PO Box 25871
Madiba Mall Fourways
Fourways 2002
2002 3 June 2018
Statement period: 1 May 2018 to 31 May 2018
Account number: 1258 3598 1257
Current Account
Date Details Debit Credit Balance
R R R
1 Balance 11 380.00 Cr
4 Cash deposit 1 900.00 13 280.00 Cr
6 Cash handling fees 14.50 13 265.50 Cr
10 Cheque 475 450.00 12 815.50 Cr
12 Inter-account transfer: Savings account
0215875 7 450.00 20 265.00 Cr
15 Cheque 476 20 480.20 214.70 Dr
20 Internet transfer: T Kotze 870.00 655.30 Cr
Cheque 473 348.00 307.30 Cr
26 Dishonored cheque R/D (L Jordaan -
debtor) 450.00 142.70 Dr
28 Transaction fees 25.30 168.00 Dr
30 Cheque 454 600.00 768.00 Dr
Stop order - insurance 350.00 1 118.00 Dr
31 Interest paid 120.00 998.00 Dr
Bank interest 58.75 1 056.75 Dr
Service fees 30.25 1 087.00 Dr
Cheque 470 220.00 1 307.00 Dr
Deposit: Salary 5 312.60 4 005.60 Cr

Use the information on the bank statement to answer the following questions:

5.1.1 Determine the opening balance in the account. (2)

12
 5.1.2 Calculate the total amount that Tebogo has paid for bank fees for the month. (2)

5.1.3 Show how the amount of R4 005.60 (closing balance), after the deposit on the
31stMay in her account, was calculated. (2)

5.1.4 Briefly explain the difference between wage and salary. (2)

5.1.5 On May 4, Tebogo made a cash deposit of R1 900 into her account. Calculate the
percentage of this amount charged by the bank as cash handling fee.
(2)

5.2 Tebogo decided to remove garden waste on

Saturdays.

She hired a bakkie and a trailer at R400 a

day. She asked her friend James to help
her. She pays James R300 per day.

PHOTO 1: Hired trailer and bakkie

5.2.1 Calculate Tebogo's daily fixed expenses. (2)

5.2.2 Tebogo has removed 80 drums and her variable expenses are R240.
Calculate the variable expenses per drum. (2)

5.2.3 TABLE 2 below shows the ratio between the number of drums (with waste) and the
total expenses.

TABLE 2: Expenses of removal of waste drums

Number of drums (n) 0 10 20 30 40 50 80
Expenses (C) in Rand 700 730 760 A 820 850 940

Use the above information and answer the questions that follow:

(a) Write down a formula in the form Expenses (C) = ..............

to determine the expenses (C) if a number of drums (n) are removed. (2)

(b) Hence determine the value of A. (2)

(c) Determine the number of drums that were removed for R1 000. (2)

5.2.4 Tebogo receives R20 to remove 1 drum. On a certain day, she received R1 600.
Calculate the number of drums she removed on that specific day. (2)

5.2.5 The graph of Tebogo's expenses (2.2.3) is drawn on the ANSWER SHEET provided.
Now draw the graph of Tebogo's income for 2.2.4 above on the same set of axes and
name the axes and the graph appropriately. (6)

5.2.6 Use the following formula and determine the number of drums that should be (3)

13
 removed to break even.

Number of drums =

5.3 The graph below indicates the percentage increase or decrease in selected food and drinks from June
2017 to June 2018.
Use the information in the graph to answer the following questions.

5.3.1 Explain the term inflation. (2)

5.3.2 Currently the average price in June 2018 of a tin of cool drink (330ml) is R7,75.
(3)
(a) Calculate the cost of a tin of the same cool drink in June 2017.
(b) Calculate the cost of a tin of cool drink (330ml) in June 2018 in Botswana if the
exchange rate is1 Rand = 0,77 Botswana Pula (2)

14
5.4 The 2017 budget for ABC High School, is shown below.

Projected budget for ABC High School

Income (R) Expenditure (R)
School fees 1 663 200 Salaries (SGB posts) 1 512
Donations 1 800 Curriculum material 121
Department grant 220 500 Computer maintenance 21
Bad debts recovery 11 250 Prize giving function 8
Cafeteria 10 800 Maintenance (grounds) 94
Interest received 1 089 School vehicle maintenance 39
Fundraising 9 250 Stationary 116
Municipality (water etc.) 140
Sport, Transport etc. 13
Development 16
Other expenses 15
Total income A Total expenses 2 098

Surplus/ Deficit = Income - Expenditure -180 475

Use the budget to answer the following questions:

5.4.1 For which year is the budget projected? (2)

5.4.2 Give an example of a fixed expenditure in the budget. (2)

5.4.3 Calculate the value of A. (2)

5.4.4 Write down the ratio of Donations to Fundraising, in simplified form. (2)

5.4.5 Define the term deficit as used in the budget. (2)

[47]

QUESTION 6 (WC Prep P2 2018)

6.1 Mr. Mabele received a letter from the City of Cape Town to explain his high water
consumption. The following information was in the letter:

 Water (period 01/04/2018 to 30/04/2018)

 Previous meter reading 7849,00 kℓ
 New meter reading 7866,82 kℓ
 Water Bill is R1 016,12
 Sewerage is an ADDITIONAL cost that is equal to 60% of the water bill.
 The Mabele’s household consist of 5 members.
 The suggested daily water consumption is 50 ℓ per person.

15
 6.1.1 Suggest ONE way on how Mr Mabele can save water. (2)

6.1.2 Calculate how much more is the water consumption (in litres) than the
suggested monthly usage for the Mabele household. (6)

6.2 Mr Mabele wants to install a water tank. He has invested R20 500 at an
interest rate of 3,58% compounded annually 2 years ago at a bank.

The information below is of the water tank, the concrete stand and
water tariffs.
QUOTATION: INSTALLATION OF WATER TANK:

QUOTATION
Sales Person: Quinton Bali
Quotation for:
Mr. Charles Mabele
15 Church Street All prices
Bellville exclude VAT
Cape Town, 7580
Quotation valid until: 2018/06/24

QTY DESCRIPTION UNIT PRICE AMOUNT

R 9
1 WATER TANK R 9 300.00
300.00
R 4
3 FILTERS R 1 500.00
500.00
R 2
1 WATER PUMP R 2 180.00
180.00
R 5
1 LABOUR R 5 400.00
400.00
R 21
SUBTOTAL
380.00
TAX RATE 15.00%

VAT

TOTAL

Cost to build concrete stand: R1 650 (VAT included)

6.2.1 Mr Mabele estimated that the total cost of the water tank and the concrete
stand will not be more than R25 000. Calculate the total cost (VAT of 15%
included) to install the water tank with all its fittings and the concrete stand
to verify if his estimation is correct. (5)

6.2.2 Mr Mabele wants to use his investment to pay for the installation of the
water tank. Verify if his investment is enough to install the water tank with
the concrete stand, by showing all the calculations. (5)

16
 6.2.3 Calculate Mr Mabele’s monthly water and sewerage bill for the period
01/04/2018 to 30/04/2018. (3)

6.2.4 Due to the implementation of the suggested water saving strategies,

MrMabele’s monthly water consumption for the period 01/05/2018 to
31/05/2018 decreased by 45% from the previous period (01/04/2018 to
30/04/2018).
His wife stated that they have saved more than R1 000. Verify if his
wife’s statement is correct or not by showing all calculations.

The following table indicates the water tariff rates.

Price of Water Usage (Vat Included)

Water consumption Tariff

Less than 6 kℓ R26,25

Between 6 kl and 10,5 kℓ R46,00

Between 10,5 and 20 kℓ R114,00

(9)

6.3 Ms Mtombe is a manager at a petrol station and keeps record of the changes in
the petrol price as shown in TABLE 1 below.

TABLE 1: PETROL PRICE PER LITRE

Petrol Price per litre: January - June 2018

2018 SA petrol Inland 93 Coastal 95 Inland 95

prices LRP LRP ULP (unleaded)

Jan 18 R14,20 R13,93 R14,42

Feb 18 R13,90 R13,63 R14,12

Mar 18 R13,54 R13,27 R13,76

Apr 18 R14,23 A R14,48

May 18 R14,72 R14,38 R14,97

Jun 18 R15,54 R15,20 R15,79

Source: http://www.energy.gov.za

6.3.1 Give ONE reason why there is a difference in the Inland and Coastal
prices for petrol. (2)

17
 6.3.2 Calculate the percentage increase of the Inland 95 unleaded petrol price
from January 2018 to June 2018. (3)

6.3.3 If the average/mean price of 95 LRP at the coast was R14,05 over
January 2018 to June 2018, calculate the petrol price per litre during
April 2018, the value of A. (3)

6.3.4 Which one of the central tendencies will be more representative of the
price for 93 LRP? Verify your answer by means of calculations. (6)
[44]

QUESTION 7 (NC Prep P1 2018)

7.1 ANNEXURE A shows a home loan statement and transaction history for the period
1 March 2017 to 28 February 2018.

HOME LOAN STATEMENT

MR J.J.B. DU TOIT Date 2018-02-28

P.O. Box 354 Statement 2017-03-01 to 2018-02-28
UPINGTON period
8800
Account number: 5439823498

Name of branch Thibault Square

Approved loan R900 000,00 Monthy payment R8 527,41
amount
Current interest rate 9,52% Pay date 2018/04/03
Payment frequency Monthly

Date of Transaction Debit Credit Balance

transaction
2018-01-09 BROUGHT 900 000,00 900 000,00
FORWARD
2018-01-09 Initial fee* A 905 985,00
2018-01-31 Interest 5 434,92 911 419,92
2018-02-02 Debit order 8 527,41 902 892,51
2018-02-28 Interest 6 596,06 909 488,57

* Total cost: R5 250 (VAT excluded) + VAT ... = A

The VAT on all fees and cost on you loan account shall increase from 14% to 15%
with effect of 1 April 2018. All costs on our statements on which VAT is charged is
indicated by an asterisk (*).

PLEASE NOTE:
 The loan period is 20 years.

7.1.1 Give the name of the borrower. (2)

18
7.1.2 What is the loan amount? (2)

7.1.3 What does the term debit mean in the context of the question? (2)

7.1.4 Determine A, the initial fee. (3)

7.1.5 The interest rate decreases on 1 March 2018 by 0,25%. Determine the
interest rate that is used from 1 March 2018. (2)

7.1.6 Calculate the total interest that was charged for the tax year ending
28 February 2018. (2)

7.1.7 VAT increased on 1 April 2018 from 14% to 15%. If the initial fee were
to be calculated on 1 April 2018, how much more would the borrower
had to pay as a result of the increased VAT? (3)

7.1.8 Calculate the amount interest owed on 31 March 2018 that will be shown
on the next statement.

You may use the following formula:

Bnr
Interest = 365 where,

B = closing balance on last day of previous month

n = number of days in month
r = interest rate (3)

19
7.2 Sinokhose plans an outing to the ice rink for a school group. TABLE 2 below shows the
cost structure of the Northgate Ice rink for 2017.

TABLE 2: COST STRUCTURE NORTHGATE ICE RINK 2017

Per person (in Rand)
BASIC ENTRANCE FEE 75,00
(per session)
HIRING OF SKATES (per session) 35,00
GROUP TARIFF 10 + 85,00
(per session, includes entrance fee and hiring of 20 + 80,00
skates) 50 + 75,00
CHEAP SKATE CARD A 620,00
(only entrance per session)
10 sessions
CHEAP SKATE CARD B 740,00
(entrance fee + hiring of skates per session)
10 sessions
SUNDAY NIGHT CRAZINESS 55,00
(entrance fee + hiring of skates)

TIME OF SESSIONS
DAY 10:00 – 17:00
EVENING 19:30 – 22:30
CLOSED MONDAY NIGHTS DURING SCHOOL TERMS
HALF PRICE TUESDAY NIGHTS
[Adapted from: wwwtheicerink.co.za]

Use TABLE 2 to answer the questions that follow.

7.2.1 What is the basic entrance fee, per session, at the ice rink? (2)

7.2.2 Determine the percentage increase from 2017 to 2018 if the basic entrance fee
is R80 from 1 January 2018.

You may use the following formula:

New value - original value

 100
% increase = original value (3)

7.2.3 Name the items that are included in the price, if a person buys a "Sunday night
Craziness" ticket. (2)

7.2.4 Calculate the entrance fee, per person, for a group of 23 people if they visit the
ice rink on a Tuesday evening. (3)

7.2.5 Calculate the total cost if a person buys the "Cheap Skate" card A and use it for
10 sessions. (3)

7.2.6 Andisiwe is part of a ice skate team that practice once a week in 2017 for the
whole year.

20
 a) How many time does Andisiwe practice in the year if he attends all the
practice meetings? (2)

b) If he hires skates for each practice, what is the total amount he will have to
pay for hiring the skates in 2017? (2)

7.2.7 Determine the relative cost per session if a person has a "Cheap Skate" card B.

You may use the following formula:

R740
Relative cost per session =
number of sessions
(2)

7.2.8 Sinokuhle bought a pair of ice skates for R1 565,99 (VAT included).
Determine the price of the ice skates, VAT excluded.

PLEASE NOTE: VAT = 15% (3)

[41]

21
QUESTION 8 (FS Prep P1 2018)

8.1 Bank account holders are allowed to request periodical (i.e. either for weekly, monthly, six
months’ period, etc.) statements on their accounts.

A TSD Bank Prestige Plus Current account statement for the period 09/09/2017 to 16/09/2017 is
shown on the annexure below:

Prestige Plus Current Account Statement

TSD Bank From: 09/09/2017
Cornerstone Building To: 16/09/2017
Marshalltown
Gauteng 2107
Account Number: 47 962 1719
Miss T Diale
1145 Leslie Street
Vereeniging 1930
Details Debit (R) Credit (R) Date Balance (R)
Balance Brought 54,31
Forward
IB Payment to Tuff 20,00 09/09/2017 34,31
Lady
Purchase 63,98 13/09/2017 29,67-
Salary 9282 382,14 14/09/2017 352,47
Salary 9004 22 695,98 15/09/2017 23 048,45
Salary 9234 191,07 15/09/2017 23 239,52
IB Transfer to Teboho 2 400,00 15/09/2017 20 839,52
IB Payment to Mike 1 000,00 15/09/2017 19 839,52
IB Payment to Ntsiki 600,00 15/09/2017 19 239,52
Credit Card 2 361,52 15/09/2017 16 878,00
Insurance 9847 500,00 15/09/2017 16 378,00
Insurance 9140 532,75 15/09/2017 15 845,25
STD Bank Bond 5 569,75 15/09/2017 10 275,50
Insurance 9303 801,23 15/09/2017 9 474,27
Pre-Paid Electricity 100,00 16/09/2017 9 374,27
Vehicle repayment 3 168,79 16/09/2017 6 205,48
##Pre-Paid Electricity Fee … 16/09/2017 6 204,38
Ladies Fitness 289,00 16/09/2017 5 915,38
End

NB: Transaction means any debits or credits on the account.

IB >Internet Banking Transactions

## These fees are inclusive of VAT at 14%

Use the annexure above to answer the questions that follow.

8.1.1 Write down the name of the account holder. (2)

8.1.2 Determine the total number of TRANSACTIONS made on this account. (2)

22
 8.1.3 Determine the probability of choosing a transaction made on 15/09/2017. (2)

8.1.4 Calculate the total amount of IB transactions made on this account. (3)

8.1.5 The account holder owed the bank a certain amount on a particular day.
Identify the amount that the account holder owed the bank. (2)

8.1.6 Calculate the total amount deposited into this account during the period of
the statement. (2)

8.1.7 What percentage of the total amount deposited into this account was paid
towards TSD BANK BOND? (3)

8.1.8 Calculate the Pre-Paid Electricity fee on 16/09/2017. (2)

8.2 The table below shows the Emfuleni Local Municipality domestic electricity tariffs during
a low season period.

TABLE 2: EMFULENI LOCAL MUNICIPALITY DOMESTIC ELECTRICITY

TARIFFS (R) FOR 2016/17
Household (All tariffs are 14% VAT exclusive)
Block 1 0–50kWh R0,9015 per kWh
Block 2 51–350kWh R1,0161 per kWh
Block 3 351–600kWh R1,3594 per kWh
Block 4 above 600 kWh R1,6314 per kWh
[Source: www.emfueni.gov.za]

8.2.1 Show with calculations, the amount paid for using 400 kWh of electricity. (4)

8.2.2 Calculate the amount (to two decimal places) for a customer who used
183,9745 kWh of electricity in Block 3. (3)

8.3 Miss Diale managed to save R20 000 and decided to invest it for two years
compounded annually, at an interest rate of 7,73% for the first year and 7,98% for
the second year.
Calculate the total amount she will receive at the end of the investment period. (5)

23
8.4 Joseph intends to have some plumbing work done at his house. He received the following
plumbing information from two companies.
Company 1: Handyman-SA company
 A call-out fee of R450 with the first hour free.
 Thereafter, R400 for each additional hour or part thereof.
Company 2: Laws Plumbing company
 No call-out fee
 R550 per hour or part thereof.
TABLE 3 below shows the number of hours and total cost of plumbing for the two
companies.
TABLE 3: NUMBER OF HOURS AND TOTAL COST FOR PLUMBING
Plumbing time (hours) 0 1 2 3 5 H
Handyman-SA cost (R) 0 450 850 G 2 050 3 250
Laws Plumbing cost (R) 0 550 1 100 1 650 2 750 4 400
[Source: www.handyman-sa.com and Lawsplumbing.ca.za]

NOTE: A call-out fee is a basic amount charged by plumbers in order to attend to the
location where the job must be done.

8.4.1 Write down the call-out fee value for Handyman-SA company. (2)

8.4.2 What is Laws Plumbing’s hourly rate? (2)

8.4.3 Write down the formula that can be used by Handyman-SA company to
calculate the total cost of plumbing, in the form:

Total cost (R) = ... (2)

8.4.4 Calculate:

(a) the missing value G (2)

(b) the missing value H (3)

8.4.5 If Joseph wants plumbing service for work that requires 5 hours, state in
words the amount he will pay for acquiring the service of the cheapest
company. (2)
[43]

24
QUESTION 9 (FS Prep P2 2018)

9.1 The TABLE below sets out the division of revenue over the Medium-Term
Expenditure framework as set out in the 2017 budget speech. (Some values have
been omitted.)

Transfers to provinces and local government are made through the equitable share
and conditional grants.
 Equitable share allocations are determined by formulas that take into account
demographic and developmental factors.
 Conditional grants are designed to achieve certain goals, and provinces and
municipalities must meet specific criteria to receive grants.

Use ANNEXURE C to answer the questions that follow.

9.1.1 Calculate the value for A. (4)

9.1.2 Local government received 43,27% of Non-interest allocations (that is the

funds available after providing for debt-service costs) in 2013/14.

Calculate the value of the non-interest allocations of 2013/14. (3)

9.1.3 Local government also shares in the general fuel levies. Write down how
much more this share is in 2017/18 than 2016/17. (3)

3.1.4 Calculate the percentage increase in debt-service cost from 2013/14 to

2017/18. (3)

9.1.5 The budget has an allocation for a contingency reserve of R6 billion for
2017/18, R10 billion for 2018/19 and R20 billion for 2019/20. Explain
exactly what this money is budgeted for and give an example of an occasion
it was used. (4)

9.1.6 Verify that in 2015/16 more than 80 % of transfers to provinces have been
allocated through the equitable share. (4)

9.2 Me Modise took R46 000 and invested it at a bank for one year at an interest rate of
12,5% compounded half yearly. Calculate how much more she will receive at the
end of her investment. (5)
[26]

25
TABLE 4: Division of nationally raised revenue (some values have been omitted)

2013/14 2014/15 2015/16

2016/17 2017/18 2018/19 2019/20

R billion
Outcome
Revised Medium-term estimates
estimate

Division of available funds

National departments 490,0 546,1 A
590,2 631,4 681,6
Provinces 439,5 471,4 500,4
538,2 578,6 621,0
Equitable share 336,5 359,9 386,5
410,7 441,4 471,5 506,1
Conditional grants 74,1 79,6 84,9
89,7 96,8 107,1 114,9
Local government 82,6 87,6 98,3
103,3 112,5 121,5 132,3
Equitable share 39,0 41,6 49,4
51,2 57,0 62,7 69,3
Conditional grants 34,0 35,8 38,2
40,9 43,7 46,3 49,8
Share of General fuel levy 9,6 10,2 10,7
11,2 11,8 12,5 13,2
Non-interest allocations 1 017,1 1 115,8 1 161,1 1
240,9 1 331,5 1 434,9
Debt-service costs 101,2 114,8 128,8
146,3 162,4 180,7 197,3
Contingency reserve
6,0 10,0 20,0
Main budget expenditure 1 131,9 1 244,6 1
307,4 1 409,3 1 522,2 1 652,2

[Source: National Treasury]

QUESTION 10 (MP Prep P2 2018)

10.1 Peter makes handbags and sells them to tourists at R350,00, including VAT. His
expenses are as follows:

 Production cost (60 or fewer bags per month): R200,00 per bag
 Annual rent: R16 800,00
 Weekly transport: R300,00
 Weekly airtime: R100,00

However, if Peter makes more than 60 bags per month the production costs will reduce
by 10% per bag.

Determine whether Peter made a profit or loss at the end of August if he made 95bags,
95
but sold only 77.

 The monthly transport cost of July : August is in a ratio of 8 : 9

 The monthly rental for August was 5% more than it was in July.
 Assume that August has 4 weeks. (10)

10.2 Simon, a 32-year-old

old from Botswana had a monthly taxable income of 20 840 pula and
paid 39 570 pula tax in the 2017/18 tax year. He cla
claimed
imed that he paid less tax than
what he would have paid if he worked in South Africa aand
nd had the same monthly
taxable income. Verify his claim by making use of the exchange rate and the TABLE
below.
Exchange Rate : R1 = 0,74 BWP (BWP – Botswana pula)
 TABLE 3: SOUTH AFRICA INDIVIDUALS TAX TABLE FOR 2017/18
Taxable income
R0 - R189 880
R189 881- R296 540
R296 R541 - R410 460
R410 461 - R555 600
R555 601 - R708 310
R708 311 – R1 500 000
R1 500 001 and above
Rebates
Primary
Secondary
Tertiary
Rates of tax
18% of each rand
R34 178 + 26% of the amount above R189 880
R61 910 + 31% of the amount above R296 540
R97 225 + 36% of the amount above R 410 460
R149 475 + 39% of the amount above R555 600
R209 032 + 41% of the amount above R708 310
R533 625 + 45% of the amount above R1 500 000
R13 635
R7 479
R2 493 (10)

10.3 Simon ordered new gym equipment from Cape Town, South Africa and asked Blue Bird Truck
Hire and Transport for a quotation (a formal statement setting out the estimated cost for a
particular job or service) to deliver the equipment in Gaborone, Botswana.

TABLE 4: BLUE BIRD TRUCK HIRE AND TRANSPORT RATES

Tariff Summary Tariff (VAT inclusive)

1-ton open truck R1 050,00 and additional km’s @ R2,50 per km
3-ton closed truck R1 600,00 and additional km’s @ R4,00 per km
5-ton closed truck R1 850,00 and additional km’s @ R4,95 per km
7-ton closed truck R1 950,00 and additional km’s @ R5,75 per km
6-ton crane truck R3 900,00 and additional km’s @ R7,50 per km
Source: www.bluestartruckhire.co.za
**Rates quoted above include 200 free kilometres, a driver, an assistant driver and fuel.

10.3.1 Use the TABLE above and the distance table on ANNEXURE below to calculate the
amount of the quotation if he wants to hire a 5-ton closed truck to deliver the
equipment from Cape Town to Gaborone. (5)

10.3.2 After Simon received the quotation, he estimated that if he asked one of his friends in
Gaborone to collect the equipment from Cape Town, it will cost him R2 000 less.

The fuel consumption of the truck his friend uses is 10,5 litre/100 km, the fuel price is
R13,42 per litre and the maintenance cost is 224,9 c/km.

Determine whether his estimation was correct. (9)

[34]

28
ANNEXURE C: DISTANCE - AND CONVERSION TABLE

QUESTION 3.3

Source: www.gogglemaps.co.za

CONVERSION TABLE
Miles Yards Kilometres Metres
1 1760 1,609 1 690
0,6215 1093,84 1 1000

29
GLOSSARY OF TERMS

• Opening balance: amount owed at the of a period on a statement.

• Closing balance: amount owed at the end of the period on the statement.
• Amount due: minimum amount to be paid on a statement (usually a percentage of the total
amount owed)
• Debit: amount of money a client owes for services rendered.
• Credit: payment already made by the client
• Tariff: the rate charged for the services
• VAT: 15% of the total charges
• Payslip: a record of information about remuneration (payment of service rendered by an
employer to the employee)
• Salary: fixed payment in a pay period, based on yearly total.
• Wage: payment for work on a hourly/daily/weekly/piece-work rate.
• Profit: when income is bigger than expenditure
• Loss: when expenses are bigger than income i.e. Profit/Loss = Income – Expenditure
• Break-even point: is a point where income and expenses are equal.
• Interest: The money paid by the borrower at a particular rate for the repayment of the bond or the
money added to the principal amount at the end of the investment or it is the amount by which the
money grows while being invested.
• Interest Rate: Give the percentage by which an amount of money grows after being invested for
one year.
• Initial/Principal Amount: Amount borrowed, excluding the interest or amount invested
excluding earnings.
• Accumulated Amount: Is money that was invested plus the interest earned.
• There have 2 types of interests: simple interest and compound interest:
• Simple interest: The money one earns at the end of investment. A percentage of the principal
amount is added to the principal amount thus resulting in the growth of the initially invested
amount.

Interest = Principal amount × interest rate × time

• Compound interest: Interest calculated on the initial principal and on the accumulated interest of
previous periods of deposit or loan.is added more than once according to the agreed term.
• Bank Accounts: Money can be deposited or invested in different kinds of accounts and savings
plans.
• Savings, cheque and current account – there is daily access to the money up to a limit
that can be chosen Administration, deposit and withdrawal fees are charged.
• Credit and Debit account – interest charged on a debit balance

30
 o Administration, deposit and withdrawal fees are charged
o On debit amount, interest has to be paid to the bank.
o Little or no interest is paid to the accounts are above
• Fixed deposit – interest rate is fixed for the investment period
o Interest can be paid out monthly or can be reinvested and they are calculated daily
and compounded monthly
o Has a higher interest rate than the previous accounts.
o A wide range of investment periods (from one week to five (years) is available.
o No administration, deposit and withdrawal fees.
• Money market – money is available on daily basis
o Rate vary from day to day
o Interest rate higher but lower than that of fixed deposit
• 32 – day notice – interest rates vary from month to month
o Higher interest rates but lower than that of fixed deposit
o Money can be deposited anytime but withdrawals are only possible 32 days after
the client gives the bank notice of withdrawals
• Inflation: measure of change of purchasing power of money over time.

31