FINANCIAL

MATHEMATICS
 DEFINITIONS
Leave loading: an extra payment that some workers are entitled to
receive from their employer while on annual leave, on top of their
base rate of pay. Leave loading acts as a top-up to your standard
base pay, and is intended to compensate workers for extra
expenses incurred during leave. Usually of their normal pay (unless
told otherwise).
Piecework: The worker is paid a fixed amount for each piece of
work completed
Commission: Proportion of the overall sales amount.
Retainer: Weekly or monthly fee including your commission
Gross income: sum of all wages, salaries, profits, interest
payments, rents, and other forms of earnings, before any
deductions or taxes.
DEFINITIONS
Net income: The amount the employee takes home after deductions
Net income = gross income – deductions
Taxation: Amount paid to the government once a person’s taxable
income passes a set amount
Deferred Payments: A payment plan that allows repayment of a
debt at a future date without interest accruing.
Market value: The amount for which something can be sold on a
given market.
Trade in: An item of merchandise (such as an automobile or
refrigerator) taken as payment or part payment for a purchase.
COMPARING WAGES AND
SALARIES- EXAMPLE
Matthew earns an annual salary of $62,345 and works a 35-hour
week. His wife Rebecca works part time in retail and earns $22.40
per hour.
a) Calculate how much Matthew earns per week
b) Determine who has the higher hourly rate of pay
c) If Rebecca works on average 15 hours per week, what is her
yearly income?
d) Matthew takes a 4 week holiday on normal pay plus leave
loading. How much will he be paid during his holiday?
 SOLUTIONS
a)

b)

c)

d)
CALCULATING OVERTIME-
EXAMPLE
Matthew works some weekends and late nights in addition to
normal working hours and has overtime pay arrangements with his
employer.
a) Calculate how much Matthew earns if he works 35 hours during
the week at the normal hourly rate of $35.26 and 8 hours on the
weekend at time and a half.
b) Matthew’s hourly rate is changed. In a week he works 20 hours
at the normal rate, 6 hours at a time and a half and 9 hours at
double time. If he earns $1300, what is his hourly rate?
 SOLUTIONS
a)

b)
CALCULATING COMMISSION
AND PIECEWORK
A saleswoman is paid a retainer of $1800 per month. She also
received a commission of 1.25% on the value of goods she sells. If
she sells goods worth $70,800 for the year, calculate the earnings
for that month.
SOLUTIONS
QUESTIONS
Ex1i Q6, 7ace, 9, 11, 14, 16,18-22
SIMPLE INTEREST
EXAMPLE
Calculate the simple interest paid on a loan of $5000 at 16.4%
interest over four years
EXAMPLE
Remy invests $2500 at 8% p.a. simple interest, for a period of time,
to produce $50 interest. For how long did she invest the money?
EXAMPLE
Colin invested $4000 for 5 years and earned $700 in interest. What
was the annual rate of simple interest?

Interest for
Annual interest rate
PURCHASING ON TERMS
A camping set costing $998 can be bought on terms for $99 deposit
and 24 monthly instalments of $55.
a) Calculate the total cost of buying the camping set of terms.
b) How much would you save by paying cash?

a) Total cost
b) Amount saved by paying cash =
EXAMPLE
A computer costing $1498 can be bought on terms for $300 deposit
and 36 monthly repayments of $46.50.
a) Calculate the total cost of buying the computer on terms
b) Find the total amount of interest charged
c) Calculate the amount of interest paid annually
d) What was the amount of money borrowed?
e) Calculate the annual rate of interest charged
EXAMPLE
A large screen TV set can be bought for $2998 cash or on the
following terms: deposit $299, with the balance to be repaid over 2
years in 24 equal monthly repayments. Simple interest is charged
on the balance at 12% p.a. If the TV is bought on terms:
a) Calculate the balance owing after the deposit is paid
b) Calculate the interest charged on the balance owing
c) What is the monthly repayment?
QUESTIONS
Ex 1K Q6, 9, 11, 14, 16a,b,c
DEFERRED PAYMENT
(PURCHASING ON TERMS)
 EXAMPLE
Michael sees a skiing outfit advertised as
shown.
When Michael approaches the retailer, he is
given
the conditions shown for the deferred
payment scheme.
a) Calculate the total amount Michael
would have to pay for the skiing outfit
under this scheme
b) Calculate the monthly instalments
c) How much more than the advertised
price would Michael pay under this
scheme?
REPAYING A REDUCIBLE
INTEREST LOAN
Rachel bought a new car for $35,000. She used $5000 that she has
saved and borrowed the remaining $30,000. She signed a loan
agreement and agreed to pay interest at 12% p.a., which is 1% per
month. She decided she could afford to repay $800 per month.
a) Complete the next three rows of this table, in which the interest
is 1% of the opening balance for each month. Round off to two
decimal places when necessary.
EXAMPLE
b) How much has Rachel paid in instalments in these seven
months?
c) How much interest has she paid in these seven months?
d) By how much has Rachel reduced the amount she owes on this
loan?
e) Describe what might happen if Rachel defaults on the loan by
failing to make the agreed regular repayments on her load
SOLUTION
QUESTIONS
Google classroom worksheets
1. Deferred payments
2. Reducible interest questions
COMPOUND INTEREST
EXAMPLE
Clive borrowed $12,000 to buy a lathe for his factory. He agreed to
pay 15% interest p.a. to be repaid in full in three years’ time.
Calculate the amount to be repaid if the interest is compounded:
a) b)
a) Annually
b) Half-yearly
c) Quarterly
c)
EXAMPLE
Aunt Freda leaves Thelma a legacy- some deposit stock that was
invested for 10 years at 11% p.a. compounded quarterly. The value
of the cheque received was $38, 478.36. Calculate the initial
deposit.
EXAMPLE
When it first began, Claudia’s business had takings of $228,000 p.a.
Her takings 12 years later are $520,000. At what rate p.a. (correct
to 1 decimal place) is her business growing?
EXAMPLE
After how many years will a $450 stamp be worth at least $900 if it
increases in value by 7.5% p.a.?

Guess and check:

DEPRECIATION
When the value for an item decreases year by year it is said to be
depreciating. Many of the things we own depreciate at more or less
a constant rate. This may be based by age or by the availability of
new models
Depreciation is the loss in value of an object over a period of time
What happens when machinery worth $40,000 depreciates for 4 years at a rate of
15% p.a. Find the total amount of depreciation.
Value after

Value after

Value after

Value after
DEPRECIATION FORMULA

𝑛
𝐴=𝑃 ( 1−𝑟 )
EXAMPLE
Adam buys a second-hand car for $3400. What will the car be worth
in 5 years if each year is depreciates 18%?
EXAMPLE
Carol paid for a new Xbox 6 years ago. If the unit is now worth
$306.49, how much did Carol pay for it brand new if the
depreciation rate is 28% p.a.?
QUESTIONS
Ex 1M Q6a,e Q7a,e Q8, Q11, Q15
PAYG
GLOSSARY
Taxable income = Gross income – Deductions
Tax payable: Calculating the amount of tax you should be paying
the ATO (Australian Taxation Office).
Tax withheld: The amount of tax you have already paid throughout
the year
Tax refund: If you have paid too much tax
Tax liability: If you paid too little tax
RESIDENT TAX RATE
BRACKET
https://www.ato.gov.au/rates/individual-income-tax-rates/?=top_10_
rates
 EXAMPLE
During the financial year, Peter earned $6,200 per month from his
employer and other sources such as interest on investments. He has
receipts for $450 for work-related expenses and donations.
a) Calculate Peter’s taxable income
b) Use the tax table to calculate Peter’s tax payable.
c) Peter also needs to pay the Medicare levy of 1.5% of his taxable
income. How much is the Medicare levy?
d) Add the tax payable and the Medicare levy.
e) During the financial year, Peter’s employer sent a total of $7797 in tax
to the ATO. Has Peter paid too much tax, or not enough? Calculate his
refund or liability.
TAX BRACKET
SOLUTIONS
a)

b)

c)

d)

e)
 EXAMPLE
Alan received a salary of $47,542 and a total from other income
(investments) of $496. His total tax deductions were $1150. During the
year he had already paid tax instalments amounting to $10,710.75
Find:
a) His total income
b) His taxable income
c) How much Alan must pay as his Medicare levy
d) The tax payable on his taxable income
e) His refund due or balance payable when the Medicare levy 1.5% is
included
SOLUTIONS
a)

b)

c)

d)

ATO ows Alan $ 3221.83 (Refund)

e)
QUESTIONS
Karl earned $52 850 as a tiler in 2002/03. His employer deducted
tax payments of $13 110. However, Karl earned a further $4156 on
weekends and during his holidays. His tax deductions came to
$2096 as his expenses in earning the additional income were
considerable.
Find:
a) Karl’s total income
b) Karl’s taxable income
c) The tax on his taxable income
d) Additional tax payable (balance), including the Medicare levy of
1.5%
SOLUTION
a)
b)
c)
d)
e)
2018 T1
2017 T1
2016 T1
QUESTIONS
Taxable income document