• UNIT 9:Money and its financial applications

    9.1 Simple budgeting

    (a) Uses and role of money in our lives


    Activity 9.1

    • Discuss the uses and roles of money in our lives.
    • Now create a role play about the uses and roles of money in our lives.

    • Present your role play to the class.

    Example 9.1
    Sibomana is a Primary 5 pupil. He was given 500 Frw by his uncle. State
    two ways he can use the money.

    Solution

    • Sibomana can use the money to buy a geometric set.

    • He can use the money to buy exercise books, pens and pencils

    Practice Activity 9.1
    1. State three ways a mother can use with 8 000 Frw.
    2. State two ways a primary five pupil can use with 5 000 Frw.
    3. State two roles of money in a family.
    4. Explain two roles of money at a religious centre.

    5. Explain ways in which a school uses money.

    (b) Sources of money
    Activity 9.2
    1. Discuss different ways
    (i) an individual can get money.
    (ii) a family can get money.
    (iii) a school can get money.
    2. Explain how money can help
    (i) individuals    (ii) the family    (iii) the school

    Note
    :

    • The different ways we can get money are known as sources of money.
    • We should only get money through legal ways. Legal ways of earning
    money include working on farms, working at a job, doing business, etc.
    • We should not get money through illegal sources. Illegal sources include

    stealing, robbing, taking bribes, corruption, etc.

    Rule: Never get money through illegal sources.

    Example 9.2
    1. A primary five pupil stated the following ways of getting money.
    (i) Begging
    (ii) Working on a farm for pay.
    (iii) Stealing
    Which one is a legal source of money?
    2. Explain why begging and stealing are not good ways of getting money.

    Solution

    1. Working on a farm for pay.
    2. Begging encourages laziness. Stealing is a crime punishable according
    to the law.

    (b) Sources of money

    Activity 9.2
    1. Discuss different ways
    (i) an individual can get money.
    (ii) a family can get money.
    (iii) a school can get money.
    2. Explain how money can help
    (i) individuals     (ii) the family     (iii) the school

    Note:
    • The different ways we can get money are known as sources of money.
    • We should only get money through legal ways. Legal ways of earning
    money include working on farms, working at a job, doing business, etc.
    • We should not get money through illegal sources. Illegal sources include
    stealing, robbing, taking bribes, corruption, etc.

    Rule: Never get money through illegal sources.

    Example 9.2

    1. A primary five pupil stated the following ways of getting money.
    (i) Begging
    (ii) Working on a farm for pay.
    (iii) Stealing
    Which one is a legal source of money?
    2. Explain why begging and stealing are not good ways of getting money.

    Solution

    1. Working on a farm for pay.
    2. Begging encourages laziness. Stealing is a crime punishable according
    to the law.

    Practice Activity 9.2
    1. Dusabimana stated the following as ways of getting of money.
    – Doing business – Fishing
    – Begging – Washing a car for pay
    Which one is a bad source?
    2. State two ways a family can get money.
    3. Explain how a school can get money through school activities.
    4. Explain ways through which a community can get money.
    5. Gilbert named the following as sources of money:
    – Stealing bananas
    – Picking tea leaves for sale
    – Taking a bribe
    (a) Which one is a good source of money? Explain why.
    (b) Which of the above are bad ways to get money? Discuss your
    answers
    (c) Budgeting and setting priorities
    Needs are things that we cannot do without. These include food, shelter
    and clothes.
    Wants are things we would like to have, but we can do without them. This
    may include toys, video games, ice creams and radio.
    Money should be spent on the most important things first. After our needs
    are taken care of, we can choose to spend on wants. This is called setting
    priorities.

    Activity 9.3
    • Study the needs and wants below.
    Food, clothes, car, television set, ice cream, shelter, school fees, shoes,
    education, water.
    (i) Which are needs?
    (ii) Which are wants?
    (iii) List the needs and wants in order of priority.
    (iv) Explain why you classified the items as wants or needs.

    Example 9.3

    A family got 50 000 Frw from sales at their shop.
    The family had the following projects they wanted to do:
    (i) Painting house at the cost of 12 000 Frw.
    (ii) Buying family food for 20 000 Frw.
    (iii) Buying clothes for 12 000 Frw.
    (iv) Paying school fees worth 16 000 Frw.
    (a) Order the family needs according to priority.
    (b) (i) How much money does the family require to meet their budget?
    (ii) Do they have the required amount?
    (iii) What can the family do?
    (c) State the item that can be done later and explain why.

    Solution

    (a) (i) Buying family food
    (ii) Buying clothes
    (iii) Paying school fees
    (iv) Painting house
    (b) (i) (12 000 + 20 000 + 12 000 + 16 000) Frw = 60 000 Frw.
    (ii) They don’t have enough money to do everything.
    (iii) Budget money according to priority.
    (c) Painting house at the cost of 12 000 Frw. From budget 2 000 Frw is
    available. The family can wait and do it once they have more money.

    Practice Activity 9.3

    1. List three most important needs.
    2. Nzigiyimana plans to do the following.
    (i) Buy food for his family     (ii) Buy a television set
    (iii) Pay for holiday trip        (iv) Buy a car
    (v) Buy clothes                    (vi) Construct a house
    (a) List Nzigiyimana’s needs in order of priority.
    (b) List Nzigiyimana’s wants in order of priority.
    3. Suppose your family has 20 000 Frw. List three things your family can
    spend the money in order of priority.

    4. Suppose you have 3 000 Frw. List the things you can do with the money.

    Start from the most important to the least important. Explain why the
    items have been classified as most important or least important.

    5. A school plans to do the following projects. They have 200 000 Frw to

    spend.
    (i) Dig a well of water at 35 000 Frw.
    (ii) Paint two classrooms at 40 000 Frw.
    (iii) Construct a toilet at 70 000 Frw,
    (iv) Buy 20 school desks at 60 000 Frw.
    (a) Order the above projects according to priority.
    (b) How much more money does the school need to do all projects?
    (c) State which project can be done later. Then explain why it can
    be done later.

    9.2 Ways of transferring money

    Activity 9.4
    Study the following ways of transferring money.
    n
    b

    (i) Name each of the ways used to transfer money in diagrams above.
    (ii) Discuss how money can be transferred using the methods above.
    (iii) From the methods above, explain the most convenient way of
    transferring
    (a) a large sum of money.

    (b) small sums of money.

    Practice Activity 9.4
    1. State 2 methods Ndayisaba can use to send money to his cousin.
    2. State a method Paul can use to send money for school fees to his
    daughter at school.
    3. Dusabimana has 200 000 Frw. State the most convenient method she
    can use to transfer these money to her mother. Justify your answer.
    4. Mugiraneza urgently wants to send 10 000 Frw to his worker. State
    one method he can use. Explain your choice.
    5. Amina wants to send 5 000 Frw to her father. State one method she

    can use. Explain why you chose that method.

    9.3 Saving and borrowing money
    Activity 9.5
    Mugiraneza and Niyirera each had 1 000 Frw from their parents.
    Mugiraneza bought a ruler worth 300 Frw. He also bought biscuits
    worth 400 Frw for his friends. Niyirera bought a ruler worth
    300 Frw and saved the rest. During the week, their teacher asked them
    to buy a geometrical set worth 500 Frw.
    (i) How much did each pupil spend?
    (ii) How much did Mugiraneza save?
    (iii) How much did Niyirera save?
    (iv) How much does Mugiraneza need to borrow from Niyirera? Why
    does he need to borrow money?

    (v) Who spent the money wisely. Explain your answer.

    Hint:

    Borrowed money is not free. It has to be returned to the lender.

    Example 9.4
    Musabe earns a salary of 150 000 Frw in a month. He spends his money
    as follows:
    Rent: 30 000 Frw
    School fees: 35 000 Frw
    Food: 25 000 Frw
    Transport: 15 000 Frw
    He saves the remaining money.
    (i) How much does he spend in total each month?
    (ii) How much does he save each month?
    (iii) Why do you think it is important for Musabe to save?
    Solution
    (i) Money spent = (30 000 + 35 000 + 25 000 + 15 000) Frw
                                                                           = 105 000 Frw
    (ii) Savings = Money earned – money spent
                                   = (150 000 – 105 000) Frw
                                   = 45 000 Frw

    (iii) For future use or to use in case of an emergency.

    Practice Activity 9.5
    1. Look at the flash cards below. They contain different ways of saving

    and borrowing money.

    f

    (a) Which flash cards show how to save money?
    (i) ____
    (ii) ____
    (iii) ____
    (b) Which flash cards show how one can borrow money?
    (i) ____
    (ii) ____
    (iii) ____
    2. Discuss the importance of saving money.
    3. Explain the importance of borrowing money.
    4. Imanairere earns 100 000 Frw in a month. She spends 20 000
    Frw on rent, 25 000 Frw school fees, 15 000 Frw on transport and
    18 000 Frw on food.
    (i) How much did she spend altogether?
    (ii) How much did she save?

    (iii) Explain why it is important for Imanairere to save money.

    9.4 Different currencies and converting currencies
    Activity 9.5
    • Study these currencies. They are from different countries. Name

    these currencies.

    d

    Tip:
    Different currencies have different values in relation to our currency (Frw).

    Let us now look at the following activity.

    Activity 9.6
    Study the table below. It was displayed in a Forex shop in Kigali on

    14/02/2016 at 10.00 a.m.

    m

    (i) Kamanutsi had 300 USD. How many Frw are these?
    (ii) Mukahirwa had 20 000 Frw. How many EUR are these?
    (iii) Nzikobankunda had 600 UGX. How many Frw are these? Explain
    your steps.
    (iv) Which one was the strongest currency as compared to the Frw?

    Justify your answer.

    Tip:
    You can convert Frw to any other currency. Always be sure to use current

    exchange rates.

    Example 9.5
    Convert 10 000 Frw into
    (i) US dollars (USD)
    (ii) Euros (EUR)
    (iii) Kenya shillings (KSh)

    (iv) Uganda shillings (UGX)

    Exchange rates as on 10/1/2016 at 3 p.m

    j

    Solution
    (i) 740 Frw = 1 USD
    Thus, 10 000 Frw = (10 000 ÷ 740) USD = 13.51 USD
    Practically, this would be given as 13 USD and you would lose 0.51
    USD. But you can give an extra 370 Frw and get 14 USD.
    (ii) 836 Frw = 1 EUR
    Thus, 10 000 Frw = (10 000 ÷ 836) EUR = 11.96 EUR.
    (iii) 7.25 Frw = KSh 1
    Thus, 10 000 Frw = KSh (10 000 ÷ 7.25) = KSh 1 379.31
    Practically, this is converted as KSh 1 379.30 or more easily as
    KSh 1 379.
    (iv) 1 Frw = 4.60 UGX

    Thus, 10 000 Frw = 10 000 × 4.60 UGX = 46 000 UGX

    Practice Activity 9.6
    Use the exchange rates given in Example 9.5 in this activity
    1. Convert 5 000 Frw into
    (i) Kenyan shillings           (ii) Ugandan shillings
    (iii) Euros                          (iv) US dollars
    Convert the following into Rwandan Francs. Discuss why one would convert
    his/her currencies into Frw.
    2. 100 USD                             3. 50 EUR

    4. 20 000 UGX                        5. KSh 2 000

    Revision Activity 9
    Practice Activity 9.6
    Use the exchange rates given in Example 9.5 in this activity
    1. Convert 5 000 Frw into
    (i) Kenyan shillings       (ii) Ugandan shillings
    (iii) Euros                      (iv) US dollars
    Convert the following into Rwandan Francs. Discuss why one would convert
    his/her currencies into Frw.
    2. 100 USD 3. 50 EUR
    4. 20 000 UGX 5. KSh 2 000
    1. State two uses of money for a primary 5 pupil.
    2. State two uses of money for a family.
    3. State two uses of money for a school.
    4. State two sources of money.
    5. Write two ways a family can get money.
    6. State two ways a school can get money.
    7. Below are some sources of money. Which one is not a good way of
    getting money? Explain your answer.
    – Working for pay on a farm.
    – Salary from employment.
    – Slashing overgrown grass for a wage.
    – Stealing from a friend.
    8. The following are needs and wants. State and explain the most
    important need.
    • Food                                  • Clothes
    • Television                           • House
    9. Daliya has the following needs and wants. List them from the most
    important to the least important. Then explain your reasoning.
    • Holiday camp                     • School fees
    • Food                                  • Clothes
    10. State three ways of transferring money from one destination to
    another.
    11. State and describe two ways of saving money.
    12. State and explain two ways of borrowing money.
    13. Explain why you should budget before spending.
    14. Study the currency exchange table below. It was observed on

    20/1/2016 at 11 a.m in a Forex shop.

    l

    (a) Convert 15 000 Frw into
    (i) EUR   (ii) USD     (iii) KSh      (iv) UGX
    (b) Convert KSh 500 into Frw. Discuss your answer.

    (c) Convert 20 000 UGX into Frw. Discuss your answer.

    Word list
    Simple budgeting            Priorities       Wants                 Needs
    Sources of money           Uses/roles of money               Setting priorities
    Transferring money         Different currencies                 Converting currencies
    Task
    Do the following.
    (i) Read each word aloud to your friend.
    (ii) Write the meaning of each of the words above. Discuss with your friend.

    (iii) Write sentences using each of the words above. Read with your friend.

    UNIT 8:Solving problems involving time intervalsUNIT 10:Sequences that include whole numbers, fractions and decimals