WJEC MATHEMATICS

INTERMEDIATE
NUMBER

MONEY

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Contents

Profit and Loss

Simple and Compound Interest
Finding an original quantity
VAT
Bills
Tax
Best Buys
Exchange Rates

* Percentages are used frequently in this booklet. Make sure

you understand 'Fractions and Percentages of Amounts'
booklet

Credits

WJEC Question bank

http://www.wjec.co.uk/question-bank/question-search.html

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Profit and Loss
If someone were to buy a shirt for £5 and then sell it for £10, a profit
of £5 has been made.

Profit/Loss = Money earned - Money spent

So for this example

𝑃𝑟𝑜𝑓𝑖𝑡 𝑜𝑟 𝐿𝑜𝑠𝑠 = 10 − 5

Money earned from Money spent buying the

people buying the shirt shirt initially

However, If someone bought a car for £20,000 and then sold it for
£12,000
𝑃𝑟𝑜𝑓𝑖𝑡 𝑜𝑟 𝐿𝑜𝑠𝑠 = 12000 − 20000 = −8000

This is a negative number which means a loss has been made of

£8,000

Exercise N29
Calculate how much profit or loss has been made in the following
situations
1. A car was bought for £15500 and sold for £11200
2. A washing machine was bought for £450 and sold for £199.99
3. A retailer buys 20 shirts at £1.20 each and sells them for £2 each.
4. A scooter is bought for £130 and the price increased by 20% to
sell. How much profit is made?
5. A car costs £20000 to make and is sold for £45000. How much
profit was made?
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Simple Interest
When calculating simple interest you only need to calculate the
interest once and that value stays the same.

Example
John invests £360 for 3 years at a simple interest rate of 5% per
year.
5% = £18
The interest is £18 so it is this amount added each year
360 + 18 + 18 + 18 = £414

Exercise N30
1. Jason invests £250 for 5 years at an interest rate of 3% per
annum (per year). How much does he have after the 5 years?

2. Jasmine invests £380 for 4 years at an interest rate of 2% per

annum. How much does she have after the 4 years?

3.Complete the following table:

Initial amount Simple Interest Time Amount after
rate
£480 6% per annum 5 years
£600 4% per annum 7 years
£1200 12% per annum 2 years
£250 9% per annum 6 years
£100 10% per annum 5 years
£20 9 years £65

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Compound Interest
Compound interest is slightly different to Simple interest. In
compound interest, the interest changes every year because each
year the amount in the account increases with previous interest
rates.

Example
Jo invests £400 in an account that offers 5% compound interest per
year. How much does Jo have after 3 years?

(Method 1 - Year by Year)

Year 1
5% 𝑜𝑓 400 = £20
𝑁𝑒𝑤 𝑡𝑜𝑡𝑎𝑙 = £400 + £20 = £420
So after one year, Jo has £420. The interest for the next year will be
on this amount
Year 2
5% 𝑜𝑓 420 = 21
𝑁𝑒𝑤 𝑇𝑜𝑡𝑎𝑙 = 420 + £21 = £441
So after two years, Jo has £441. The interest for the third year will be
on this amount.
Year 3
5% 𝑜𝑓 £441 = £22.05
𝑁𝑒𝑤 𝑇𝑜𝑡𝑎𝑙 = £441 + £22.05 = £463.05

So after the three years, Jo has £463.05

This method works, but can take a long time and it is easy to make
errors. Method 2 is much quicker. (See next page)
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(Method 2 - The Formula)
𝑁𝑒𝑤 𝐴𝑚𝑜𝑢𝑛𝑡 = 𝐼(1 + 𝑟)𝑛

𝑛 is the
𝐼 is the initial amount
𝑟 is the number of
invested
interest days/months
rate as a /years given
decimal in the
question
So consider the example on the previous page:
Jo invests £400 in an account that offers 5% compound interest per
year. How much does Jo have after 3 years?
• 𝐼 = 400
• 𝑟 = 0.05
• 𝑛=3
So, substituting these into the formula
𝑁𝑒𝑤 𝐴𝑚𝑜𝑢𝑛𝑡 = 400(1 + 0.05)3

Type this straight into

your calculator

𝑁𝑒𝑤 𝐴𝑚𝑜𝑢𝑛𝑡 = £463.05

Exercise N31
1. Jessica invests £54900 in an account with a compound interest
rate of 7% per year. How much does she have after 4 years?
2. Hannah invests £884 in an account with a compound interest rate
of 11% per year. How much does she have after 22 years?
3. Rowan invests £4.99 in an account with a compound interest rate
of 3% per year. How much does he have after 50 years?

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 Exam Questions N15

1.

2.

3.

4.

5.

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Finding the original amount*
questions will give you the price of something after the percentage
increase / decrease has been applied.

Example 1
An item in a shop has been increased by 15% and is now £460. How
much was the item to begin with?

Remember, to calculate a percentage increase/decrease

𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝐶𝑜𝑠𝑡 ×𝑚𝑢𝑙𝑡𝑖𝑝𝑙𝑖𝑒𝑟 = 𝑁𝑒𝑤 𝑐𝑜𝑠𝑡

For increase, the multiplier is 1 plus the percentage as a decimal

For decrease, the multiplier is 1 minus the percentage as a decimal

So, for this example

𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑐𝑜𝑠𝑡 ×1.15 = 460

We can rearrange this. (See the booklet 'Rearranging' for help with
this)
460
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑐𝑜𝑠𝑡 =
1.15
= £400

*This section can be found in the booklet 'Fractions and Percentages

of amount'

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Example 2
A car costs 34% less now than it was when new. It now costs
£29700. How much was the car new?

𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑐𝑜𝑠𝑡 ×𝑚𝑢𝑙𝑡𝑖𝑝𝑙𝑖𝑒𝑟 = 𝑁𝑒𝑤 𝑐𝑜𝑠𝑡

𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑐𝑜𝑠𝑡 ×0.66 = 29700

This is a percentage
decrease question so
the multiplier is
1-0.34
Rearrange:
29700
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑐𝑜𝑠𝑡 =
0.66
= £45000
Exercise N32
1. An item in a shop was increased by 22% and sold for £549. What
was the original cost?
2. An item in a shop was increased by 78% and sold for £40.05.
What was the original cost?
3. An item in a shop was decreased by 54% and sold for £455.40.
What was the original cost?
4. An item in a shop was decreased by 19% and sold for £421.20.
What was the original cost?

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 Exam Questions N16

1.

2.

3.

4.

5.

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VAT
VAT (Value Added Tax) is an amount of money (At the time of
writing this VAT is 20%) added to the purchase of a produce.

Example 1
The cost of an item is £450 plus VAT at 20%. How much is the item
sold for ?
Non calculator
20% 𝑜𝑓 450 = 90
𝑃𝑟𝑖𝑐𝑒 = 450 + 90 = £540
Calculator
450 ×(1 + 0.2) = £540

Example 2
In item is sold for £450 inclusive of VAT at 20%. How much was the
item before VAT was added?
Calculator
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝐴𝑚𝑜𝑢𝑛𝑡×1.2 = £450
450
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝐴𝑚𝑜𝑢𝑛𝑡 =
1.2
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝐴𝑚𝑜𝑢𝑛𝑡 = £375

Exercise N33
1. The cost of an item is £255 plus VAT at 20%. How much is the
item sold for ?
2. In item is sold for £780 inclusive of VAT at 20%. How much was
the item before VAT was added?
3 In item is sold for £1471.20 inclusive of VAT at 20%. How much
was the item before VAT was added?

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Bills
Bills questions give you all the information you need to work through
the solution step-by-step.

Example
The electricity meter readings at the beginning and end of a three
month period are shown below

The cost of electricity is 30p per unit with a standing charge of

£24.50. VAT is added to this cost at 20% to find the total amount of
the bill.

Firstly, we need to know how many units were used:

65197 − 64947 = 250 𝑢𝑛𝑖𝑡𝑠
Each unit costs 30p
250 ×30𝑝 = 7500𝑝 = £75
Add on the standing charge
£75 + £24.50 = £99.50
Add 20% VAT
99.50 ×1.2 = £119.40

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 Exam Questions N17
1.

2.

3.

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TAX
Tax is (usually) divided into three sections
• Personal Allowance (You don't pay tax on this! Yay!)
• Basic rate (only a small amount of tax)
• Higher rate (a larger amount of tax)

Personal Allowance is NON TAXABLE income

The rest is TAXABLE income

Example
UK Income Tax

taxable income = gross income - personal allowance

• Personal Allowance is £9000

• Basic rate of tax: 20% on the first £25000 of taxable income
• Higher rate of tax: 40% is payable on taxable income over 25000

Jamie's gross income is £50 000. How much tax will he pay?
Its often easier to consider the money as a money line:

No tax on this 20% tax on this 40% tax on this

£9 000 £34 000

£0 £50 000

No tax on 20% tax on 40% tax on

£9 000 25000 16000
= 25000×0.2 = 16 000×0.4
= £5 000 = £6 400

Total tax = 5000 + 6400 = £11400

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Exam Questions N18

1.

2.

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Best Buys
When comparing two products to see which is better value for
money, we need to compare the same unit
(e.g. 100ml of each, 1 packet of each, etc.)

Example
Jack looks at the following two cans of sweetcorn

'Golden Corn' 'Sunshine

Sweetcorn'
500g can -
69p per can 600g can -
80p per can

So, to compare these correctly, we need to consider 100g of each

product.
Divide 'Golden Corn' by 5
Divide 'Sunshine Sweetcorn' by 6

'Golden Corn' 'Sunshine

100g - 13.8p Sweetcorn'

(69÷5) 100g - 13.3p

(80÷6)

So, 'Sunshine Sweetcorn' is cheaper

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Note: These questions are often made more difficult by including
'two for one' deals and '50% off'
If this is the case, you need to work out how much is spent on each
before comparing the same units

Example

'Golden Corn' 'Sunshine Sweetcorn'

250g cans - 46p per can 200g cans - 40p per can
Buy one get one half price Buy two get the third free

You need to find out how much of each product you can buy and
how much it costs.
• Golden Corn - Get two cans, the second half price.
250𝑔 + 250𝑔 = 500𝑔
46𝑝 + 23𝑝 = 69𝑝
• Sunshine Sweetcorn - Get three cans, the third free
200𝑔 + 200𝑔 + 200𝑔 = 600𝑔
40𝑝 + 40𝑝 = 80𝑝
So the deals are:

'Golden Corn' 'Sunshine

500g -69p Sweetcorn'
600g - 80p

This is now the same as the example on the previous page.

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Exam Questions N19
1.

2.

3.

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Exchange Rates
We use exchange rates to convert between two different units of
currency. Exchange rates are usually given in the following form.
£1 = $1.22
To understand these more, use multiplication arrows. The first
always goes from the 1 to the other number and is 'multiply by the
other number'. In this case
£1 = $1.22

×1.22

The second arrow goes the opposite direction and is a divide, not
multiply
÷ 1.22

£1 = $1.22

×1.22

So, to go from £ to $ multiply by 1.22

To go from $ to £ divide by 1.22
Example

Convert £45 to $ Convert $73.20 to £

45 ×1.22 73.2 ÷ 1.22 = £60
= $54.90
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 Exam Questions N20

1.

2.

3.

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