1.4 Money matters  (Page 2/4)

• The family expects to need R6 090 for the above expenses, and this means that R2 110 is left over for other purchases.

2.1 Make budgets for Anna, Louise and Maggie. They are in grade 9, and each receives pocket money every month: Anna gets R450, Louise gets R220 and Maggie gets R600. Out of this they have to pay for clothes, make–up, entertainment, sweets and cell phone charges. Work in groups of three – each one takes one of the girls and makes her budget. You have to decide what the budget will be like. When everyone has finished, all the learners who worked out Anna’s budget get together and form groups of 3, 4, 5 or 6. Do the same for Louise and Maggie. Compare your budgets and set up a new, better budget in each group. Hand in your answer.

3 Someone who needs more money than he has in the bank may decide to borrow the money from someone, or from a bank. He pays the person who gives him the loan (we call this payment interest ) and this payment depends on many factors, like the size of the loan. The interest rate also depends on many things. The loan amount plus the interest is paid together either at the end of the loan period or in regular repayments . If Mr Botha borrows R8 500 for six months at an annual (yearly) interest rate of 15%, then after six months he has to pay back the R8 500 plus the interest which comes to R637,50 for six months. (For a year it would be 15% of R8 500.) He repays R9137,50.

3.1 Mrs Petersen bakes cakes for three shops. She needs a new oven. She has some money saved, and intends to borrow the other R3 500 she needs from a bank. She borrows the money at an interest rate of 13,5% per annum. What is the amount she’ll have to pay the bank at the end of the year?

4 People often budget money to be saved. This is a good way to get money together for future large expenditures. One can save for a holiday, to paint the house, to buy a new car and (very important) for retirement when there might not be a regular income anymore. The money is saved at a certain interest rate . This means that the bank you invest your money in will regularly make payments to you, depending on the rate of interest and the amount invested. This is called simple interest. If you don’t take the money, but keep on putting it back in the bank to enlarge the amount saved, the amount of interest keeps increasing. This is called compound interest.

For example: Mrs Van der Merwe saved while she was still employed, and on her retirement she had R150 000 in the bank. This she invested at an interest rate of 11% per annum. Every month the bank pays her one–twelfth of her annual interest. The interest comes to R16 500 per year, so she gets R1 375 per month.

• Janie’s rich uncle gave her R7 000 in a bank account (at a rate of 10%) when she turned six. Because the interest is put back into the account instead of being paid out, this is how her money grows:

• After 1 year: R7 000 + R700 = R7 700 After 2 year: R7 700 + R770 = R8 470 After 3 year: R8 470 + R847 = R9 317After 4 year: R9 317 + R932 = R10 248 (now Janie is ten years old)
• On her 21 ^st birthday she had a lovely nest egg in the bank – how much?