Finance

Inflation and exchange rates

Buying power year to year. Rand to dollar or pula when a family travels.

CAPS

Grade 11 · Mathematical Literacy · Finance

Mathematical Literacy uses a context, not a bare sum.

Two papers
Paper 1 uses familiar contexts: pay slips, till slips, maps you have seen, and data in a table. Paper 2 uses less familiar contexts and expects you to decide which method fits. Both papers are 150 marks.
What to show
Write the value with its unit or its rand sign. Say whether you multiply or divide, and round only at the end, in the way the question asked (nearest rand, one decimal place, a whole number of tiles).
The relation
new price = old price × (1 + inflation rate). One-year inflation
How a marker reads it
Inflation increases a price. Deflation decreases. Exchange: always write which way you convert, rand per dollar or dollars per rand.

A correct number with the wrong unit, or a VAT amount treated as the full price, loses the mark the context was testing.

Diagram

Worked example

A loaf costs R18. Inflation is 6% for the year. Estimated price next year?

Before any working — hunt first

Given

Numbers and units already in the sentence: R18 · 6%. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: Estimated price next year. Circle that word — that is the missing variable.

Find

We are required to find: Estimated price next year. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

Write new price = old price × (1 + inflation rate) with empty letters. Cross out every letter that already has a number. Calculate the letter that is still standing — that gives Estimated price next year.

Simplified approach

Multiply by 1.06 — that is a 6% increase.

Culture note

A year-on-year bread price at a Northam bakery is the inflation question.

Formulas

new price=old price×(1 + inflation rate)

One-year inflation

Exam tricks you must know

These are the moves markers look for — not shortcuts that skip the method, but the habits that earn the method mark.

If the price already includes VAT, divide by 1.15 — do not subtract 15%
How:Total = price × 1.15 when VAT is still to be added. When the till already shows VAT, price excluding = total1.15. Subtracting 15% of the total is a different number and loses the mark.
When to use it:Till slips, VAT, and SARS-style tax questions.
Fencing is perimeter. Grass, paint and tiles are area. Tanks are volume.
How:Underline the object: wire, border, fence → add the sides. Floor, wall, field, paint → multiply length by width, then divide by coverage and round tins up. Water in a tank → m³ then × 1 000 for litres.
When to use it:Measurement papers: school fields, paint, Jojo tanks.
Always substitute the usage into both tariff options — the cheaper one can swap after break-even
How:Write cost A and cost B as two lines. Set them equal if they ask where the deals match. Circle the smaller total at the given usage. A graph with two lines makes the swap obvious.
When to use it:Cellphone contracts, prepaid electricity, and cake-sale break-even.

Step 1 / 5

Write the multiplier

6% increase → × 1.06, not × 0.06.

18×1.06=19.08

Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

The exchange rate is R18 for 1 dollar. Convert 20 dollars into rand.

4. Step-by-step working

01
Write the formula
Rand=20×18.
20×18
02
Multiply
20×18=360.
R360

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: The exchange rate is R18 for 1 dollar. Convert 20 dollars into rand.

Before any working — hunt first

Given

Numbers and units already in the sentence: R18 for · 1 dollar · 20 dollars. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: Convert 20 dollars into rand. Circle that word — that is the missing variable.

Find

We are required to find: Convert 20 dollars into rand. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

Write 20 × 18 with empty letters. Cross out every letter that already has a number. Calculate the letter that is still standing — that gives Convert 20 dollars into rand.

In other words — as if you have never seen this before

If you have never seen this before: Multiply the number of foreign units by the rand rate. Do not divide, because the rate is already in rand per unit. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

R18 = 1 dollar. Amount: 20 dollars.

3. Which method — and why this one?

Multiply the number of foreign units by the rand rate. Do not divide, because the rate is already in rand per unit.

4. Step-by-step working

01 / 05
Write the formula
Rand=20×18.
20×18
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
02 / 05
Multiply
20×18=360.
R360
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
03 / 05
Sense-check
One dollar costs R18, so 20 of them cost 20 times that.
R360
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
04 / 05
Step F — Box the answer with its unit
R360
Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.
05 / 05
Step H — What the marker is looking for
On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.
Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

R360

Copy onto your answer sheet — in this order

Formula: 20 × 18

Answer: R360

6. Check it like a marker

Dividing by the rate answers the opposite question: how many foreign units a pile of rand will buy.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

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