Mathematics questions, chapter 10

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Consumer Mathematics: Financial Management

43 marks. Use Practice to check each answer as you go, or Exam to answer everything first. Show your working for Section B.

Section A: objective questions

12 marks

Choose the correct answer. Each question carries 1 mark.

Question 1

What is the first step in the financial management process?

Setting goals
Creating a financial plan
Evaluating financial status
Carrying out the financial plan

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The order is: setting goals, evaluating financial status, creating a plan, carrying out the plan, reviewing and revising.

For the teacher: Remembering, low difficulty, standard 10.1.1

Textbook p. 272

Question 2

A short-term financial goal is usually achieved in

more than five years
less than one year
exactly five years
ten years or more

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Short-term goals take less than a year, for example buying a laptop. Goals of more than five years are long-term.

For the teacher: Remembering, low difficulty, standard 10.1.1

Textbook p. 272

Question 3

Which one is a passive income?

Monthly salary
Overtime allowance
Sales commission
Rent received from a house

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Passive income is earned without working for it, such as rent, interest and dividends. Salary, allowance and commission are active income.

For the teacher: Understanding, low difficulty, standard 10.1.1

Textbook p. 274

Question 4

Which of the following is a fixed expense?

Petrol
Groceries
Car instalment
Electricity bill

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A car instalment must be paid and is the same each month. Petrol, groceries and electricity change with spending behaviour, so they are variable.

For the teacher: Understanding, low difficulty, standard 10.1.1

Textbook p. 274

Question 5

In the SMART concept, the letter A stands for

Attainable
Active
Accurate
Annual

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SMART means Specific, Measurable, Attainable, Realistic, Time-bound.

For the teacher: Remembering, low difficulty, standard 10.1.1

Textbook p. 273

Question 6

Encik Lim earns a salary of RM3 800 and receives RM500 rent. His fixed expenses are RM1 400 and his variable expenses are RM1 100. What is his monthly cash flow?

RM1 300
RM1 800
RM2 500
RM4 300

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Income = 3 800 + 500 = 4 300. Expenses = 1 400 + 1 100 = 2 500. Cash flow = 4 300 − 2 500 = RM1 800 (positive). RM4 300 is the income only.

For the teacher: Applying, low difficulty, standard 10.1.1

Textbook p. 276

Question 7

Hani wants to buy a laptop for RM9 000 in 18 months. How much must she save each month?

RM900
RM600
RM450
RM500

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9 000 ÷ 18 = RM500. RM900 would use 10 months instead of 18.

For the teacher: Applying, low difficulty, standard 10.1.2

Textbook p. 283

Question 8

Syafiq's income is RM2 800 a month and his total expenses are RM2 400. His expenses then increase by 25%. What is his new cash flow?

Surplus of RM400
−RM200
Surplus of RM100
−RM600

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New expenses = 125% × 2 400 = RM3 000. Cash flow = 2 800 − 3 000 = −RM200, a deficit. A surplus of RM400 is the cash flow before the increase.

For the teacher: Applying, low difficulty, standard 10.1.1

Textbook p. 276

Question 9

Aini's total monthly income is RM5 800. How much should she set aside as fixed monthly savings if she follows the 10% guide?

RM58
RM5 220
RM6 380
RM580

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10% × 5 800 = RM580. RM5 220 is the amount left after saving.

For the teacher: Applying, low difficulty, standard 10.1.2

Textbook p. 282

Question 10

A family has a negative cash flow every month. Which action is the most suitable?

Use a credit card for daily needs
Delay paying the housing loan
Reduce variable expenses and look for extra income
Stop the emergency fund and buy more wants

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Variable expenses can be cut and extra income can be added without touching fixed expenses. Using credit or paying late adds debt, interest and penalties.

For the teacher: Analysing, low difficulty, standard 10.1.1

Textbook p. 277

Question 11

A couple needs a down payment of RM60 000 in 5 years. How much must they save each month?

RM1 000
RM12 000
RM5 000
RM300

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60 000 ÷ 5 = RM12 000 a year. 12 000 ÷ 12 = RM1 000 a month. RM12 000 is the yearly amount.

For the teacher: Applying, low difficulty, standard 10.1.2

Textbook p. 285

Question 12

Mr Hamid's financial plan was feasible last year. This year the inflation rate rises and his salary stays the same. What is the effect on the plan?

The plan is not affected because his salary is the same
His savings will increase automatically
Expenses may increase, so he must adjust the plan or increase his income
His long-term goal is achieved sooner

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Inflation raises prices and the cost of living, so total expenses rise while income does not. The plan must be reviewed.

For the teacher: Evaluating, medium difficulty, standard 10.1.2

Textbook p. 284

Section B: structured questions

31 marks

Answer all questions. Show your working.

Question 13

Answer these questions about financial goals.

[2 marks] (a)Name the first step and the last step of the financial management process.

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First step: setting goals [1]1
Last step: reviewing and revising the progress [1]1

Tick each point you got.

[2 marks] (b)Give one example of a short-term goal and one example of a long-term goal.

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Short-term, e.g. buying a laptop / furniture / cell phone [1]1
Long-term, e.g. retirement / children's education / a house [1]1

Tick each point you got.

For the teacher: Remembering, low difficulty, standard 10.1.1

Textbook p. 272

Question 14

Puan Rina earns an active income of RM3 200 and a passive income of RM450 a month. Her fixed expenses are RM1 500 and her variable expenses are RM1 250.

[2 marks] (a)Calculate her monthly cash flow.

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Income − expenses = 3 200 + 450 − 1 500 − 1 250 [1]1
RM900 [1]1

Tick each point you got.

[1 mark] (b)State whether the cash flow is positive or negative.

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Positive (surplus) [1]1

Tick each point you got.

[2 marks] (c)Her total expenses increase by 40%. Calculate her new cash flow and explain what it means.

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New expenses = 140% × 2 750 = RM3 850, cash flow = 3 650 − 3 850 = −RM200 [1]1
Negative cash flow: expenses are more than income, so she has a deficit [1]1

Tick each point you got.

For the teacher: Applying, low difficulty, standard 10.1.1

Textbook p. 276

Question 15

Diagram 1 compares the planned and the actual expenses of Encik Yasir in his first month.

Bar chart of planned and actual expenses in RM: electricity 120 and 165, food 700 and 820, transport 200 and 180, phone 80 and 80 — Diagram 1

[2 marks] (a)Calculate the total planned expenses and the total actual expenses.

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Planned = 120 + 700 + 200 + 80 = RM1 100 [1]1
Actual = 165 + 820 + 180 + 80 = RM1 245 [1]1

Tick each point you got.

[1 mark] (b)Which expense increased by the largest amount? State the amount.

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Food, RM120 more (820 − 700) [1]1

Tick each point you got.

[2 marks] (c)Calculate the percentage increase in his total expenses, correct to 1 decimal place.

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145 ÷ 1 100 × 100 [1]1
13.2% [1]1

Tick each point you got.

[1 mark] (d)Give one suggestion to help him follow his plan.

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Reduce food and electricity spending to the planned amounts / compare planned and actual expenses each month [1]1

Tick each point you got.

For the teacher: Analysing, low difficulty, standard 10.1.1

Textbook p. 277

Question 16

Mr Hassan wants to save RM180 000 for his children's education in 15 years. At present he saves RM700 a month. His monthly variable expenses include RM1 500 for entertainment.

[2 marks] (a)Calculate the monthly savings he needs.

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180 000 ÷ 15 = RM12 000 a year [1]1
12 000 ÷ 12 = RM1 000 a month [1]1

Tick each point you got.

[1 mark] (b)How much more must he save each month?

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1 000 − 700 = RM300 [1]1

Tick each point you got.

[2 marks] (c)He cuts the entertainment expenses by 20%. Calculate the amount saved and state whether it is enough.

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20% × 1 500 = RM300 [1]1
Yes, RM300 is exactly the extra amount needed [1]1

Tick each point you got.

[1 mark] (d)Give one reason why the money saved over 15 years may be more than RM180 000.

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Savings in the bank earn interest each year / he may invest it for dividends [1]1

Tick each point you got.

For the teacher: Applying, medium difficulty, standard 10.1.2

Textbook p. 287

Question 17

Encik Zul has a monthly net income of RM4 500 and no passive income. He saves 10% of his income and puts RM100 into an emergency fund. His fixed expenses are RM1 600 and his variable expenses are RM2 300. He wants to buy a RM3 000 laptop in 10 months.

[1 mark] (a)Calculate his income balance.

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4 500 − 450 − 100 = RM3 950 [1]1

Tick each point you got.

[1 mark] (b)Calculate his monthly surplus.

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3 950 − 1 600 − 2 300 = RM50 [1]1

Tick each point you got.

[2 marks] (c)Can he buy the laptop in 10 months using his fixed monthly savings? Show your working.

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3 000 ÷ 10 = RM300 a month needed, and he saves RM450 [1]1
Yes, 450 × 10 = RM4 500, which is more than RM3 000 [1]1

Tick each point you got.

[1 mark] (d)His surplus is small. State one risk and one way to reduce it.

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Any one sensible risk (e.g. a price rise causes a deficit) with a way (e.g. cut variable expenses, add income, review the plan) [1]1

Tick each point you got.

For the teacher: Evaluating, medium difficulty, standard 10.1.2

Textbook p. 282

Question 18

Hana's monthly income is RM2 000. She wants to buy a RM1 800 tablet in 9 months.

[1 mark] (a)Calculate the amount she must save each month.

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1 800 ÷ 9 = RM200 [1]1

Tick each point you got.

[3 marks] (b)Write her goal as a SMART goal. State what each letter means for her goal.

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Specific: buy a tablet [1]1
Measurable and attainable: RM1 800, save RM200 a month from RM2 000 [1]1
Realistic and time-bound: 200 is 10% of her income, within 9 months [1]1

Tick each point you got.

[1 mark] (c)Hana's goal of buying the tablet in 9 months is a short-term goal.

ATrueBFalse

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True

A short-term goal is achieved in less than a year, and 9 months is less than a year.

For the teacher: Creating, high difficulty, standard 10.1.1

Textbook p. 273

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