💷 Maths: Money and Financial Calculations

1. A customer buys three items costing £4.75, £6.30 and £3.99. They pay with a £20 note. How much change should they receive?

1. £4.96
2. £5.04
3. £4.04
4. £15.04

The total is £4.75 + £6.30 + £3.99 = £15.04, so the change from £20 is £20 - £15.04 = £4.96. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 10 (decimals/money))

2. A shop sells one type of plant pot at £12.49 each. What is the total cost of buying three of these pots?

1. £36.27
2. £37.47
3. £24.98
4. £37.27

Three pots cost £12.49 × 3 = £37.47. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 10 (money calculations))

3. When writing and calculating amounts of money in pounds and pence, to how many decimal places should a final monetary answer normally be given?

1. One decimal place
2. Two decimal places
3. Three decimal places
4. No decimal places

Money in pounds and pence is written to two decimal places, rounding the final answer to the nearest penny (0.01). (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 10 (decimals applied to money))

4. A coat is priced at £80. A sign reads '15% off everything'. What is the sale price of the coat?

1. £65.00
2. £68.00
3. £12.00
4. £72.00

A 15% discount means paying 85%: £80 × 0.85 = £68.00 (the discount itself is £12). (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 13 (discounts); sale price = original × (1 − discount rate))

5. A plumber charges a net price of £45 for a job, before VAT is added. Using the current UK standard rate of VAT, what is the total price the customer pays?

1. £45.90
2. £54.00
3. £47.25
4. £90.00

The standard VAT rate is 20%, so the gross price is £45 × 1.20 = £54.00 (£9 of VAT). (HMRC/GOV.UK, 'VAT rates' (standard rate 20%); gross = net × 1.20)

6. What is the current UK standard rate of VAT that is normally added to taxable goods and services?

1. 5%
2. 17.5%
3. 20%
4. 25%

The UK standard rate of VAT is 20%, set at this level on 4 January 2011. (HMRC/GOV.UK, 'VAT rates' (gov.uk/vat-rates))

7. A till receipt shows a total of £90.00, which already includes VAT charged at the standard rate of 20%. What was the net (pre-VAT) price of the goods?

1. £72.00
2. £75.00
3. £70.00
4. £18.00

Because the gross includes 20% VAT, divide by 1.20: £90 ÷ 1.20 = £75.00 net (the VAT element is £15). (HMRC/GOV.UK, 'VAT rates' (20%); net = gross ÷ 1.20)

8. At a cafe, a sandwich is £3.50, crisps are £1.20 and a drink is £1.85 when bought separately. A 'meal deal' offers all three together for £4.50. How much is saved by choosing the meal deal?

1. £2.05
2. £1.05
3. £2.55
4. £1.55

Bought separately the items cost £3.50 + £1.20 + £1.85 = £6.55, so the £4.50 deal saves £6.55 - £4.50 = £2.05. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 10 (money totals and comparison))

9. A jacket originally priced at £240 is first reduced by 30% in a sale, and then a further 10% is taken off the reduced price at the till. What is the final price paid?

1. £144.00
2. £151.20
3. £168.00
4. £148.80

After 30% off: £240 × 0.70 = £168; then a further 10% off: £168 × 0.90 = £151.20. Successive discounts are not simply added. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 13 (discounts), successive percentage decreases)

10. A '3 for 2' offer applies to bags of compost priced at £4.20 each. A customer takes three bags. Under the offer, how much do they pay in total?

1. £12.60
2. £8.40
3. £4.20
4. £10.40

With '3 for 2' the cheapest item is free, so the customer pays for two bags: £4.20 × 2 = £8.40. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 (money calculations / multi-buy offers))

11. A pack of 12 identical bottles costs £9.60. What is the cost per bottle?

1. £1.20
2. £0.96
3. £0.80
4. £0.75

Unit cost = £9.60 ÷ 12 = £0.80 per bottle. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 (unit cost = total price ÷ quantity))

12. Coffee is sold as a 750 g jar for £2.40 or a 500 g jar for £1.70. Which jar gives the better value for money, and why?

1. The 500 g jar, because it costs less in total
2. The 750 g jar, because its cost per 100 g is lower
3. Both are equal value because the price per gram is the same
4. The 500 g jar, because larger jars are always overpriced

Cost per gram: 750 g jar = £2.40 ÷ 750 ≈ 0.32p/g; 500 g jar = £1.70 ÷ 500 = 0.34p/g. The lower unit cost (750 g jar) is the better value. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 (best value via lowest unit cost))

13. A saver invests £4,000 in an account paying 2.5% compound interest per year. To the nearest penny, how much interest is earned after 3 years?

1. £300.00
2. £307.56
3. £312.50
4. £256.41

Using A = P(1 + r)^n: £4,000 × 1.025³ = £4,307.56, so the interest is £4,307.56 - £4,000 = £307.56. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 13 (compound interest), A = P(1 + r)^n)

14. To calculate compound interest on savings, how is the interest worked out each year?

1. The rate is applied only to the original amount invested each year
2. The rate is applied to the new balance, which includes interest already earned
3. A fixed cash amount is added regardless of the balance
4. The rate is halved each year before being applied

With compound interest the rate is applied to the growing balance each period, so interest is earned on previous interest: A = P(1 + r)^n. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 13 (compound interest))

15. A worker earns £12.71 per hour (the National Living Wage from 1 April 2026) and works 37.5 hours in a week. What is their gross weekly pay?

1. £476.63
2. £466.25
3. £480.00
4. £452.50

Gross pay = £12.71 × 37.5 = £476.625, which rounds to £476.63. (GOV.UK, 'National Minimum Wage and National Living Wage rates' (£12.71 from 1 April 2026))

16. In a month, a person has a take-home income of £1,850 and expenditure of £650 (rent), £210 (food), £95 (phone), £180 (travel), £120 (energy) and £240 (other). Do they have a surplus or shortfall, and how much?

1. A shortfall of £355
2. A surplus of £355
3. A surplus of £255
4. They exactly break even

Total expenditure is £1,495, so £1,850 - £1,495 = £355 surplus (income exceeds spending). (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 13 (simple budgeting))

17. In a personal budget, what does it mean if total expenditure is greater than total income?

1. There is a surplus
2. The budget breaks even
3. There is a shortfall (deficit)
4. The income has been taxed

When expenditure exceeds income, spending is greater than money coming in, which is a shortfall or deficit. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 13 (simple budgeting))

18. A person is paid £320 net each week. Approximately how much is this per year, assuming 52 weeks?

1. £3,840
2. £16,640
3. £15,360
4. £17,280

Annual pay = £320 × 52 = £16,640. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 10 (money) and budgeting over time)

19. A household receives an annual council tax bill of £1,680, paid in 10 equal monthly instalments. How much is each instalment?

1. £140.00
2. £168.00
3. £160.00
4. £280.00

Each instalment = £1,680 ÷ 10 = £168.00. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 10 (division with money))

20. A monthly net income is £1,640. Fixed outgoings are rent £595, council tax £140, energy £85, food £260 and transport £150. How much is left for saving or other spending?

1. £410
2. £310
3. £455
4. £395

Outgoings total £1,230, so £1,640 - £1,230 = £410 remains. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 13 (simple budgeting))

21. On what date each year are the UK National Minimum Wage and National Living Wage rates normally updated?

1. 1 January
2. 6 April
3. 1 April
4. 31 March

The rates are reviewed and change on 1 April every year. (GOV.UK, 'National Minimum Wage and National Living Wage rates' (change on 1 April annually))

22. A worker is paid £11.20 per hour for the first 35 hours of a week, then time-and-a-half for any extra hours. In a week they work 40 hours. What is their gross pay?

1. £448.00
2. £476.00
3. £392.00
4. £504.00

Basic: 35 × £11.20 = £392; overtime: 5 × £11.20 × 1.5 = £84; total £392 + £84 = £476.00. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 10 (money) applied to wages and overtime)

23. A salary of £24,000 per year is increased by 3.5%. What is the new annual salary?

1. £24,840
2. £24,084
3. £24,350
4. £27,360

A 3.5% rise adds £24,000 × 0.035 = £840, giving £24,000 + £840 = £24,840 (or £24,000 × 1.035). (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 6 (percentage increase))

24. A trader buys an item for £1.20 and sells it for £1.95. What is the profit on each item?

1. £0.75
2. £0.85
3. £0.65
4. £3.15

Profit = selling price - cost price = £1.95 - £1.20 = £0.75 per item. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 (profit = selling price − cost price))

25. A market stallholder buys 80 candles at £3.50 each and sells 65 of them at £5.99 each. The rest are unsold. What is the overall profit or loss?

1. A profit of £109.35
2. A loss of £109.35
3. A profit of £161.85
4. A loss of £15.00

Total cost = 80 × £3.50 = £280; revenue = 65 × £5.99 = £389.35; profit = £389.35 - £280 = £109.35. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 (profit and loss with costs and revenue))

26. A car is bought for £8,500 and later sold for £6,800. What is the percentage loss based on the purchase price?

1. 20%
2. 25%
3. 17%
4. 15%

Loss = £8,500 - £6,800 = £1,700; as a percentage of cost: £1,700 ÷ £8,500 × 100 = 20%. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 5 (one amount as a percentage of another))

27. A shopkeeper buys goods for £60 and sells them for £75. What is the profit margin as a percentage of the selling price?

1. 25%
2. 20%
3. 15%
4. 12.5%

Profit = £75 - £60 = £15; as a percentage of the selling price: £15 ÷ £75 × 100 = 20%. (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 statement 5 (expressing one amount as a percentage of another))

28. In a simple business scenario, how is a loss identified?

1. The selling price is greater than the cost price
2. The selling price is less than the cost price
3. Total income equals total costs
4. VAT has been added to the price

A loss occurs when the selling price (or total revenue) is less than the cost price (or total costs). (DfE, 'Functional Skills subject content: mathematics' (GOV.UK), Level 2 (profit and loss: loss when costs exceed revenue))

29. A jacket originally priced at £80 has 25% off in a sale. What is the sale price?

1. £60.00
2. £55.00
3. £20.00
4. £75.00

A 25% discount leaves 75% of the price, so £80 x 0.75 = £60.00. (DfE, 'Functional Skills subject content: mathematics', Level 2 statement 13 (discounts))

30. A pair of trainers costs £45 and has 30% off. How much money is taken off the original price (the discount amount)?

1. £13.50
2. £31.50
3. £15.00
4. £30.00

The discount amount is 30% of £45, which is £45 x 0.30 = £13.50. (DfE, 'Functional Skills subject content: mathematics', Level 2 statement 5 (percentages of amounts))

31. Which calculation correctly finds the sale price of an item after a 20% discount?

1. Original price x 0.80
2. Original price x 0.20
3. Original price x 1.20
4. Original price / 0.20

After a 20% discount, 80% of the price remains, so you multiply the original price by 0.80. (DfE, 'Functional Skills subject content: mathematics', Level 2 statement 13 (sale price = original x (1 - discount rate)))

32. A book priced at £24 is reduced by 15% in a sale. What is the sale price?

1. £20.40
2. £3.60
3. £21.60
4. £20.00

A 15% reduction leaves 85% of the price, so £24 x 0.85 = £20.40. (DfE, 'Functional Skills subject content: mathematics', Level 2 statement 13 (discounts))

33. A kettle costing £35 has 10% off. What is the new price?

1. £31.50
2. £3.50
3. £34.90
4. £32.50

A 10% discount leaves 90% of the price, so £35 x 0.90 = £31.50. (DfE, 'Functional Skills subject content: mathematics', Level 2 statement 13 (discounts))

34. A coat was priced at £120 and is now in a sale with 40% off. What is the sale price?

1. £72.00
2. £48.00
3. £80.00
4. £68.00

A 40% discount leaves 60% of the price, so £120 x 0.60 = £72.00. (DfE, 'Functional Skills subject content: mathematics', Level 2 statement 13 (discounts))

35. A garden bench is advertised as 'one third off'. The original price was £60. What is the sale price?

1. £40.00
2. £20.00
3. £45.00
4. £33.00

One third off leaves two thirds of the price, so £60 x 2/3 = £40.00. (DfE, 'Functional Skills subject content: mathematics', Level 2 statement 13 (discounts as fractions))