Money
Section: Number 2 | Syllabus: Cambridge IGCSE Mathematics (0580)
Calculating with Money
Money problems usually involve totalling several items and then working out change. Keeping each step organised - price × quantity for every item, then a single addition and subtraction - avoids errors.
- To find the cost of several of the same item, multiply the unit price by the quantity
- To find a total bill, add the cost of every item together
- To find change, subtract the total bill from the amount paid: change = amount paid - total cost
Worked Example: Totalling a Bill and Finding Change
- Question: A bakery charges 6.25 for a pie and 3.60 for a drink. Tom buys 4 pies and 3 drinks. Work out his change from a 40 note.
- Step 1: Cost of 4 pies: 4 × 6.25 = 25.00
- Step 2: Cost of 3 drinks: 3 × 3.60 = 10.80
- Step 3: Total bill: 25.00 + 10.80 = 35.80
- Step 4: Change: 40.00 - 35.80 = 4.20
- Answer: 4.20
Common Mistakes
MistakeAdding the unit prices of different items together without first multiplying by the quantity bought of each
Fixwork out the total cost of each item separately (price × quantity) before adding the totals together
MistakeSubtracting in the wrong order when finding change, e.g. working out total cost minus amount paid
Fixchange is always the amount paid minus the total cost - the larger amount (the note or card payment) comes first
Currency Conversion
Converting between currencies uses a single exchange rate. The direction of the conversion decides whether to multiply or divide by that rate.
- To convert from the base currency into a foreign currency, multiply by the exchange rate
- To convert from a foreign currency back into the base currency, divide by the exchange rate
Worked Example: Converting To and From a Currency
- Question: The exchange rate is £1 = 1.27. Convert (i) £150 to dollars, (ii) 304.80 to pounds.
- Step 1 (i): Converting pounds to dollars means multiplying: 150 × 1.27 = 190.50
- Step 1 (ii): Converting dollars back to pounds means dividing: 304.80 ÷ 1.27 = 240
- Answer: (i) 190.50, (ii) £240
Common Mistakes
MistakeMultiplying by the exchange rate when converting back into the base currency, instead of dividing
Fixcheck which currency the exchange rate is written in terms of (e.g. £1 = $1.27) - converting into that base currency always means dividing
MistakeRounding the exchange rate, or an intermediate result, before completing the conversion
Fixkeep full accuracy throughout the conversion and round only the final answer, exactly as with any other calculator work
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