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Consumer Mathematics: Financial Management · Form 4

Consumer Mathematics: Financial Management: Worked Examples (KBAT)

Real-life, multi-step problems where you must first decide which tool to use, simple interest, the compound maturity formula, or unit pricing, then carry the numbers through to a decision. Practises reading a situation and choosing a method, the skill higher-order questions test.

General information only, not financial advice.

Written by the spmmath.com.my editorial team.

Worked example 1

Puan Salmah has RM6 000 to save for 3 years towards her daughter's RM6 800 college registration. Bank P offers simple interest at 4.2% per year.

Bank Q offers compound interest at 4% per year, MV = P(1 + r)n. (a) Which bank returns more, and by how much?

(b) Does either bank alone reach the RM6 800 target?

  1. Bank P (simple): I = 6 000 × 0.042 × 3 = 756, so MV = 6 000 + 756 = RM6 756.
  2. Bank Q (compound): (1.04)3 = 1.124864.
  3. Bank Q MV = 6 000 × 1.124864 = 6 749.184 ≈ RM6 749.18.
  4. Compare: RM6 756 > RM6 749.18, so Bank P returns more by 6 756 − 6 749.18 = RM6.82.
  5. Target check: Bank P RM6 756 and Bank Q RM6 749.18 are both below RM6 800.
  6. Shortfall for the better bank (P): 6 800 − 6 756 = RM44.

Worked example 2

A hostel warden buys cooking oil for a kitchen that uses 60 litres a month. Supplier A sells a carton of 12 bottles of 1 litre for RM71.40.

Supplier B sells a 5-litre jerry can for RM28.75. (a) Find the price per litre from each supplier.

(b) Which is cheaper, and how much would the hostel save in one month by choosing it?

  1. Supplier A volume = 12 × 1 L = 12 L; price per litre = RM71.40 ÷ 12 = RM5.95/L.
  2. Supplier B price per litre = RM28.75 ÷ 5 = RM5.75/L.
  3. Compare: RM5.75 < RM5.95, so Supplier B is cheaper by RM0.20 per litre.
  4. Monthly use = 60 L, so monthly saving = 60 × RM0.20 = RM12.00.

Worked example 3

A phone costs RM1 800 if paid in full. On the installment plan a buyer pays a RM300 deposit, and the remaining balance is charged simple interest at 8% per year for 2 years, then split into 24 equal monthly payments.

(a) Find the monthly payment. (b) Find the total paid under the plan and how much more it is than the cash price.

  1. Balance after deposit = 1 800 − 300 = RM1 500.
  2. Simple interest on the balance = 1 500 × 0.08 × 2 = RM240.
  3. Amount to repay on the balance = 1 500 + 240 = RM1 740.
  4. Monthly payment = 1 740 ÷ 24 = RM72.50.
  5. Total paid = deposit + repayments = 300 + 1 740 = RM2 040.
  6. Extra over cash price = 2 040 − 1 800 = RM240.

Worked example 4

Puan Aishah has RM8000 to save for 2 years to pay for her child's school fees, which will be RM8700. Bank P offers 4.5% per year simple interest and Bank Q offers 4.2% per year compound interest.

Find the final amount from each bank, state which is higher, and determine whether either plan meets her RM8700 target.

  1. Bank P (simple): I = 8000 × 0.045 × 2 = RM720, so amount = 8000 + 720 = RM8720.
  2. Bank Q (compound): A = 8000(1.042)² = 8000 × 1.085764 = RM8686.11.
  3. Compare: RM8720 > RM8686.11, so Bank P gives more, by 8720 − 8686.11 = RM33.89.
  4. Check target RM8700: Bank P (RM8720) reaches it; Bank Q (RM8686.11) does not.

Worked example 5

A laptop costs RM3000 if paid in cash. On the installment plan a customer pays a deposit of 20% of the cash price, and the remaining balance is charged simple interest at 7.5% per year for 2 years, then paid in 24 equal monthly installments.

Find the monthly installment and how much more the installment plan costs than paying cash.

  1. Deposit = 20% × 3000 = RM600.
  2. Balance = 3000 − 600 = RM2400.
  3. Interest on balance = 2400 × 0.075 × 2 = RM360.
  4. Amount paid in installments = 2400 + 360 = RM2760.
  5. Monthly installment = 2760 ÷ 24 = RM115.
  6. Total paid = 600 + 2760 = RM3360; extra vs cash = 3360 − 3000 = RM360.

Worked example 6

A hostel buys detergent. Option A is a 3 kg box at RM24.00.

Option B is a 5 kg refill at RM37.50 with a further 8% discount at checkout. The hostel uses 15 kg of detergent each month.

Find the price per kg for each option, decide which is cheaper, and calculate the monthly saving if the cheaper option is used.

  1. Option A price per kg: RM24.00 ÷ 3 = RM8.00.
  2. Option B price after discount: RM37.50 × (100% − 8%) = 37.50 × 0.92 = RM34.50.
  3. Option B price per kg: RM34.50 ÷ 5 = RM6.90.
  4. Cheaper option: Option B (RM6.90 < RM8.00).
  5. Saving per kg = 8.00 − 6.90 = RM1.10; monthly saving = 1.10 × 15 = RM16.50.

Worked example 7

A class of 40 students is planning a graduation dinner with a budget of RM3 000. Catering Company X charges RM65 per student but gives a 12% discount for early booking.

Catering Company Y charges a flat RM2 850 for up to 40 students, plus a RM150 service charge if paid by credit card (no service charge for cash payment). (a) Find the cheapest total cost available from each company.

(b) Which company should the class choose, and how much would they save compared to the other company's cheapest option?

  1. Company X: full cost = 65 × 40 = RM2 600.
  2. Apply the 12% discount: 2 600 × (1 − 0.12) = 2 600 × 0.88 = RM2 288.
  3. Company Y: cheapest option is cash payment, so cost = RM2 850 (no service charge).
  4. Compare: RM2 288 (Company X) < RM2 850 (Company Y), and both are within the RM3 000 budget.
  5. Saving by choosing Company X = 2 850 − 2 288 = RM562.

Worked example 8

Encik Farid buys groceries from a regular supermarket at an average cost of RM480 a month, before any discount. A wholesale club charges a one-time annual membership fee of RM120, but members get a 15% discount on the same amount of groceries.

(a) Find Encik Farid's total yearly spending at the regular supermarket. (b) Find his total yearly spending, including the membership fee, if he joins the wholesale club and buys the same groceries there.

(c) Should he join the club, and how much would he save (or lose) in a year?

  1. Yearly cost at the regular supermarket = 480 × 12 = RM5 760.
  2. Cost of the same groceries at the wholesale club before discount = RM5 760 (same amount bought).
  3. Apply the 15% discount: 5 760 × (1 − 0.15) = 5 760 × 0.85 = RM4 896.
  4. Add the membership fee: 4 896 + 120 = RM5 016.
  5. Compare: RM5 016 (club) < RM5 760 (supermarket). Saving = 5 760 − 5 016 = RM744.

Source:DSKP KSSM Mathematics Form 4 and 5 (Versi English)

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Frequently asked questions

What do KBAT questions on financial management usually ask?

KBAT questions present a real financial decision, like choosing between two savings accounts, loan packages, or spending plans, and ask you to work out and compare the numbers before recommending the better option. You must justify your choice using the figures you calculated, not just state a preference.

What does the examiner reward in a financial-management KBAT answer?

Full marks need a clear final recommendation that is backed by your calculated values, for example, stating which option gives more savings or costs less overall, with the actual numbers referenced. Correct calculations without a concluding statement that answers the question will not earn full marks.

What's a common pitfall in financial-management KBAT questions?

Many students calculate both options correctly but never write a final comparative sentence, leaving the examiner to guess the conclusion. Others compare the wrong quantities, for example interest earned instead of total amount received, so read exactly what the question is asking you to decide.

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