Example 1
Three notebooks cost £1.20 each. What is the total cost?
- Each notebook costs £1.20.
- There are 3 notebooks, so multiply by 3.
- £1.20 × 3 = £3.60
So: The total cost is £3.60.
Back to National 4
Managing Finance and Statistics (National 4)
Finance, Pay and Money
Finance questions use supplied information to investigate pay, deductions, budgets, best deals, currency, savings and borrowing, then explain a practical decision.
Qualification focus: Financial position · Income and deductions · Three-product best deals · Currency · Savings and borrowing
Topic explanation
Money is usually written to two decimal places. £4.50 means four pounds and fifty pence.
A simplified payslip can show basic pay, overtime, gross pay, income tax, National Insurance and other deductions. All rates needed for a calculation are supplied in the question; current tax law is not assumed.
For budgets and best deals, organise each option in a separate column. Compare like with like, calculate the full outcome and finish with a short decision.
For currency, savings or borrowing, identify what one unit means before multiplying or dividing. A borrowing comparison should use total repayment and supplied fees.
Quick methods
- Gross and net pay
- Find basic, overtime or commission pay, then subtract every supplied deduction.
- Financial position
- Total income and expenditure separately, then compare them.
- Best deal
- Compare all supplied products over the same quantity or time period.
- Currency
- Follow the direction of the supplied exchange rate and include any fee or commission.
- Savings
- Use the supplied rate and term; state whether the target or option is suitable.
- Borrowing
- Compare total repayment, not only the regular payment.
Worked examples
Example 2
A pack of 6 bottles costs £4.20. What is the cost per bottle?
- Divide the total price by the number of bottles.
- £4.20 divided by 6 = £0.70
- £0.70 is 70 pence.
So: Each bottle costs 70 pence.
Example 3
A pupil earns £48.00 and spends £12.75 on travel and £18.40 on food. How much is left?
- Add the spending: £12.75 + £18.40 = £31.15
- Subtract the spending from the money earned.
- £48.00 − £31.15 = £16.85
So: £16.85 is left.