Mathematical Literacy Level 3 Module 11

Mathematical Literacy NQF 3 Downloaded from hlayiso.com Maths Lit NQF Level 3

Banking in the workplace Module 11 Downloaded from hlayiso.com Maths Lit NQF Level 3

Overview 11.1 Comparing bank products 11.2 Bank Statements 11.3 Investigating bank charges 11.4 Comparing bank charges and service fees Downloaded from hlayiso.com Maths Lit NQF Level 3

Comparing bank products Unit 11.1 Banks are institutions that make it safe and easy for a business to conduct their financial affairs. Making payments and Making loans and Depositing cash cash transfers overdrafts Having a credit and Investing money from Downloaded fuel cards from hlayiso.com business profits Maths Lit NQF Level 3

Types of accounts Unit 11.1 • Cheque or current account • Savings account • Credit card Downloaded from hlayiso.com Maths Lit NQF Level 3

Choosing a bank account Unit 11.1 • First determine what each bank has to offer. • Your choice must be based on what your banking needs are. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.1 page 213 Unit 11.1 Steve owns a painting company. His main banking needs are: • electronic banking services that include Internet banking and cell phone banking • an easy way to pay when purchasing materials from the hardware store Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.1 page 213 Unit 11.1 • a way to monitor his work-related transport costs • a facility for customers to pay for services by electronic transfer • a short- term credit facility occasionally, for times when his expenditure is greater than his income • a savings account where he can bank some of his profit, and where he can withdraw from his account in emergencies. Steve considers the business banking options of two banks. He finds that business packages include a cheque account, a credit card and a savings facility. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.1 page 213 Unit 11.1 Bank 1: Fiscal Bank Bank 2 The Business Account is suited to sole • A business account with a debit proprietors. The account is flexible. It offers: card and cheque book • simple tools to pay for day-to-day • 30 electronic transactions operations and other business transactions (transfers and payments) • electronic (internet, cell phone), ATM or • Free subscriptions to online, cell face-to-face banking in a banking hall phone and telephone banking • a cheque card, a credit card and a petrol Other benefits: card • Free legal advice • a savings facility with investment options • Concierge services • a credit card facility • Debit order switching services • a loan facility • An enterprise service desk • a credit card • A separate savings account Other benefits: • A separate credit card account • A team of experts to offer advice based on the specific needs of the business 1. Are there any services • A business banking app for tablets and smartphones provided by one bank that are • Earn rewards on cheque and credit card not provided by the other? spending 2. Which bank offers more • Free software for doing business financial attractive benefits? Give reports • Free software for invoicing clients reasons. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.1 page 213 Unit 11.1 1. Bank 1 offers a cheque card, credit card and petrol card. Bank 2 only offers a cheque card. Bank 1 offers a savings facility and loan facility. Bank 2 offers these as separate accounts. Bank 1 offers free software for financial reporting and invoicing. Bank 1 also offers rewards on purchases. 2. Bank 1 offers more attractive benefits. All businesses need access to financial reporting and invoicing. This is a very attractive benefit. There is also the savings and loan facility. It is convenient to have all business dealings consolidated in one package. Downloaded from hlayiso.com Maths Lit NQF Level 3

Bank fees Unit 11.1 Bank fees need to be kept to the minimum. The higher the bank costs, the higher the expenditure of a business. The higher the expenditure, the less the profit to the business. Downloaded from hlayiso.com Maths Lit NQF Level 3

Exercise 11.1 Unit 11.1 Complete Exercise 11.1 on page 215 of your Student’s Book Downloaded from hlayiso.com Maths Lit NQF Level 3

Bank Statements Unit 11.2 A bank statement provides the business person with a record of all the financial transactions for a given period: • all withdrawals, deposits, electronic transfers and bank fees Bank statements are issued on demand and are now almost always sent electronically via email. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 Like all financial documents, bank statements have the following distinct information in their header. Name of institution Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 Like all financial documents, bank statements have the following distinct information in their header. Name of account holder Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 Like all financial documents, bank statements have the following distinct information in their header. Statement date Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 Like all financial documents, bank statements have the following distinct information in their header. Statement period Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 Like all financial documents, bank statements have the following distinct information in their header. Bank account number Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 The statement has columns with the following headings: Date - is the date of the transaction Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 The statement has columns with the following headings: Description – the details of the transaction Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 The statement has columns with the following headings: Debits – money that is leaving the account Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 The statement has columns with the following headings: Credits – money coming into the account Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 The statement has columns with the following headings: Balance – the balance in the account after that specific transaction. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example of a typical bank statement on page 217 Unit 11.2 The statement has columns with the following headings: Opening balance is the balance that the statement starts at. Closing Balance is the balance left after all transactions depicted on the statement have been calculated. Downloaded from hlayiso.com Maths Lit NQF Level 3

Exercise 11.2 Unit 11.2 Complete Exercise 11.2 on page 217 of your Student’s Book Downloaded from hlayiso.com Maths Lit NQF Level 3

Investigating bank charges Unit 11.3 • Banks offer different options for transactions. • Each option has different bank charges. • When running a business, it is important that the cheapest option is chosen. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.2 page 218 Unit 11.3 Steve has done a big painting job at the Spaza Health Bar. His invoice was for R18 450,00. There are different ways that Steve could be paid: • Cheque • Cash • EFT Study the bank fees below, then answer the questions that follow. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.2 page 218 continued ... Unit 11.3 Transaction Fee Cheque deposit R40,00 R0 to R4 999,99: R8,40 + R2,81 per R100 or part thereof R5 000 to R14 999,99: R8,40 + R1,58 per R100 or part Cash deposit R15 000 to R49 999,99: R8,40 + R1,48 per R100 or part Branch counter R50 000 and more: R8,40 + R1,25 per R100 or part thereof R40 minimum fee Cash deposit - ATM R3,75 + R0,76 per R100 or part thereof Electronic transfers Free into account Electronic transfers out R4,00 of account Cash withdrawal - ATM R1,75 + R0,60 per R100 or part thereof R0,00 to R4 999,99: R2,93 per R100 or part thereof Cash withdrawal R5 000,00 to R14 999,99: R2,07 per R100 or part thereof Bank R15 000,00 to R49 999,99: R1,71 per R100 or part thereof R50 000,00 and more: R1,59 per R100 or part thereof Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.2 page 218 continued ... Unit 11.3 1. If Spaza Health Bar pays Steve by cheque, what would it cost Steve in bank fees? 2. a) If Spaza Health Bar pays Steve in cash, how much would it cost them to withdraw the cash at their bank? b) How much would it cost Steve to deposit this cash at the bank? 3. a) If Spaza Health Bar pays Steve by EFT, how much would it cost them to do the transaction? b) How much would it cost Steve in bank fees? Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.2 page 218 continued ... Unit 11.3 4. What is the cheapest method to pay Steve? 5. Would you advise Spaza Health Shop to do a cash payment? Give reasons for your answer. 6. Which form of payment would you advise Spaza Health Shop to choose? Give reasons for your answer. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.2 page 218 continued ... Unit 11.3 1. R40,00 2. a) Spaza Health Bar has to pay R18 450. The fee is R1,71 per R100 or part thereof. = 190 × R1,71 = R324,90 b) Steve would pay R8,40 + R1,48 per R100 or part thereof. R8,40 + () = R8,40 + (190 × R1,48) = R8,40 + R281,20 R289,60 3. a) R4,00 b) No charge 4. EFT 5. No. It carries the highest bank charges, and it would be very dangerous to transact in such a large amount of cash. 6. An EFT would be the cheapest and safest way to pay Steve. Downloaded from hlayiso.com Maths Lit NQF Level 3

Exercise 11.3 Unit 11.3 Complete Exercise 11.3 on page 219 of your Student’s Book Downloaded from hlayiso.com Maths Lit NQF Level 3

Comparing bank charges and service fees Unit 11.4 • Choosing the best pricing option to suit your business needs could save a considerable amount in bank chares every month. • Most banks have two options available for businesses, namely: Option 1 • A fixed monthly fee for a limited number of transactions. Option 2 • A schedule of fees for different transactions. You pay for what you use. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.3 page 221 Unit 11.4 Here is a different payment structure for a bank Bank 1 – Fixed fee structure You pay a fixed fee of R215 per month. You get: • 30 electronic debit transactions that include: • a maximum of 5 ATM cash withdrawals • cash deposits up to R50 000 • unlimited cheque card purchases • unlimited transfers and prepaid purchase • Excess electronic debit transactions @ R18,00 per transaction • Excess cash deposits @ R3,75 + R0,60 per R100,00 or part thereof • Debit orders charged at normal rate • Petrol card payments charged at normal rate Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.3 page 221 continued ... Unit 11.4 1. Calculate Steve’s bank fees if he chooses the fixed rate from Bank 1. 2. Some banks structure their fees differently. This Business Essentials package costs R199,00 per month. Calculate Steve’s bank fees if he chose this option. Transaction Type Threshold Electronic account payments, funds transfers and debit orders (excludes immediate Limited to 30 transactions per month interbank payments, branch transactions, as well as other transactions) Online banking Monthly subscription fee is free Out of bundle fee R18,00 per transaction for all payments and transfers Debit order R18,50 e-Statement No charge Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.3 page 221 continued ... Unit 11.4 3. Steve’s bank fees are R252,35 when he pays for each transaction at Bank 1. You can now compare the two fee structures in this example, with the fee structure in Example 11.1. Of the three options, which option would you advise Steve to choose? Give a reason for your answer. Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.3 page 221 continued ... Unit 11.4 1. Transaction Type Threshold Total Monthly account fee R215,00 R215,00 5 Electronic deposits 30 free R0,00 transactions Cash deposit at bank – R2 000 20 POS payments 3 ATM cash withdrawals of R1000 each 1 POS withdrawals of R500 POS withdrawals of R500 R18,00 x 1 R18,00 4 Petrol purchases R5,00 × 4 R20,00 3 debit orders R17,50 × 3 R52,50 e-Statement Free Total monthly fee = R305,50 Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.3 page 221 continued ... Unit 11.4 2. Transaction Type Threshold Total Monthly account fee R199,00 R199,00 5 Electronic deposits 30 free R0,00 transactions Cash deposit at bank – R2 000 20 POS payments 3 ATM cash withdrawals of R1000 each 1 POS withdrawals of R500 POS withdrawals of R500 R18,00 R18,00 4 Petrol purchases R18,00 × 4 R72,00 3 debit orders R17,50 × 3 R52,50 e-Statement No charge R0,00 Total monthly fee = R341,50 Downloaded from hlayiso.com Maths Lit NQF Level 3

Example 11.3 page 221 continued ... Unit 11.4 3. I would advise him to pay for each transaction at Bank 1. I would not advise him to choose the fixed rate because his transactions make it a more expensive option. Downloaded from hlayiso.com Maths Lit NQF Level 3

Exercise 11.4 Unit 11.4 Complete Exercise 11.4 on page 222 of your Student’s Book Downloaded from hlayiso.com Maths Lit NQF Level 3

Module assessment Module 11 Complete Module assessment on page 224 of your Student’s Book Downloaded from hlayiso.com Maths Lit NQF Level 3

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