Money

Section 3.5 Money

Ever wondered how people buy sneakers from the US or how your phone got here from another country? In this topic, we’re unlocking money secrets from world currencies and currency exchange to taxes, profits and why chocolate sometimes costs more than chips! It’s maths, but with a global twist, let’s make sense of shillings, dollars, euros and maybe even learn something about currency exchange from one country to the next.

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Subsection 3.5.1 Currencies used in different countries.

Activity 3.5.1.

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In this activity, you will learn about the various currencies used in different countries around the world. Understanding global currencies is essential for international travel, online shopping, and global finance.

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Materials needed: Use textbooks, internet resources, or currency charts to find the official currencies of at least 10 different countries.

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Objective: By the end of this activity, you will be able to identify the official currency of various countries, understand their symbols, and recognize their significance in global trade and economics.

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1. Research and Collect Images of Currencies.

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Internet Search: Use search engines like Google Images or Bing Images.

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Search for East African Countries like:

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Kenyan Shilling notes
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Ugandan Shilling notes
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Tanzanian Shilling notes
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Somali Shilling notes
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Rwanandan Franc notes
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Burundian Franc notes
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South Sudanese Pound notes
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Ethiopian Birr notes
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Eritrean Nakfa notes
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Main Currencies we have in East Africa are:

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Shilling (Kenya, Uganda, Tanzania, Somalia)

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Franc (Rwanda, Burundi)

Pound (South Sudan)

Birr (Ethiopia)

Nakfa (Eritrea)

Other Global Currencies include:

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Euro (EUR) - European Union

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US Dollar (USD) - United States

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British Pound (GBP) - United Kingdom

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Japanese Yen (JPY) - Japan

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Chinese Yuan (CNY) - China

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Indian Rupee (INR) - India

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south African Rand (ZAR) - South Africa

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Canadian Dollar (CAD) - Canada

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Australian Dollar (AUD) - Australia

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Swiss Franc (CHF) - Switzerland

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Brazilian Real (BRL) - Brazil

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Russian Ruble (RUB) - Russia

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Mexican Peso (MXN) - Mexico etc...

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Image Sources:

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Websites of Central Banks (e.g., Central Bank of Kenya)

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Educational websites on world currencies

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Wikimedia Commons (royalty-free images)

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2. Download or Save the Images

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Right-click on the currency images and select “Save image as…” to save them to your computer or device.

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Name the files clearly, e.g., Kenya Shilling.jpg, Euro.jpg, etc.

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3. Create the Collage

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Use free online collage makers or graphic design tools such as:

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Canva (https://www.canva.com/)
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Fotor (https://www.fotor.com/)
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Adobe Express (https://express.adobe.com/)
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Microsoft PowerPoint or Google Slides (if you want to arrange manually)
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$\textbf{Collage Creation}$

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Open the collage maker or design tool of your choice.

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Upload the saved currency images.
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Arrange them in a creative layout.
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Add titles or labels to show the country and currency name.
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4. Save or Export the Collage

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Export the collage as JPEG or PDF.

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You can print it or share it digitally.

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Research Task:

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Research and list the official currency of each country.
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Identify the symbol and code for each currency (e.g., USD for US Dollar, EUR for Euro).
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Discuss the significance of each currency in its respective country
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5. Create a Table of Currencies

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Sample Table to Complete:
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Table 3.5.1. Currency Table

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No.	Country	Currency Name	Symbol
1.	Kenya	Kenya Shilling	Ksh
2.	Tanzania	Tanzanian Shilling	Symbol
3.	Uganda	Ugandan Shilling	UGX
4.	Japan	Japanese Yen	¥
5.	European Union	Euro	€
6.	United States	US Dollar	$
7.	United Kingdom	British Pound	£
8.	South Africa	South African Rand	R
9.	China	Chinese Yuan	¥ or 元
10.	India	Indian Rupee	₹

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Activity 3.5.2. Multiple-Choice, Not Randomized, One Answer.

What is the official currency of the United Kingdom?

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Euro
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Euro is the official currency of the European Union, not the UK.
Pound Sterling
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The Pound Sterling is the official currency of the United Kingdom.
US Dolar
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The US Dollar is the official currency of the United States, not the UK.

Solution.

The correct answer is Pound Sterling.

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Activity 3.5.3.

2.The symbol ¥ represents the currency of which country?

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Kenya
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The Kenyan Shilling is represented by the symbol Ksh, not ¥.
Japan
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The symbol ¥ represents the currency of Japan, known as the Yen.
South Africa
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The South African Rand is represented by the symbol R, not ¥.
China
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The symbol ¥ is also used for the Chinese Yuan, but it is more commonly associated with Japan.

Solution.

The correct answer is Japan and China.

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Activity 3.5.4.

2.The symbol ¥ represents the currency of which country?

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KES
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KSh
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KS
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K$
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Solution.

The correct answer is KSh.

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Activity 3.5.5.

4. Which of the following countries uses the Euro (€) as its currency?

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Kenya
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The Kenyan Shilling is the official currency of Kenya, not the Euro.
France
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France is a member of the Eurozone and uses the Euro (€) as its official currency.
Nigeria
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The Nigerian Naira (₦) is the official currency of Nigeria, not the Euro.
European Union
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The Euro (€) is the official currency of many countries in the European Union, not just France.

Solution.

The correct answer is France and European Union.

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Example 3.5.2.

Amina from Kenya wants to buy a mobile phone from the United States.

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In Kenya, she uses Kenyan Shillings (KSh).
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In the United States, people use US Dollars ($).
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To buy the phone, Amina needs to exchange her Kenyan Shillings for US Dollars.
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This is because each country uses its own currency for buying and selling goods and services.
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Why?
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Solution.

Different countries use different currencies to manage their own economies and trade with other countries.

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Example 3.5.3.

John from Uganda wants to visit Tanzania for a holiday.

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In Uganda, he uses Ugandan Shillings (UGX).
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In Tanzania, people use Tanzanian Shillings (TZS).
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When John arrives in Tanzania, he cannot use Ugandan Shillings to pay for food or transport.
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He has to exchange his Ugandan Shillings for Tanzanian Shillings at a bank or forex bureau.
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Why?
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Solution.

1. Because each country has its own money system, and people in Tanzania only accept Tanzanian Shillings for payment.

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2. This is because each country has its own currency for transactions.

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Subsection 3.5.2 Conversion of currencies to Kenya shillings

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Activity 3.5.6. Converting Shillings to Notes.

In Kenya, money is expressed in shillings (KES) and cents. 1 shilling is equal to 100 cents. We use both coins (for small amounts) and notes (for larger amounts).

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In this activity, you will practice converting amounts of money into notes and coins, and convert between shillings and cents.

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The available notes in Kenya are Ksh. 1,000, Ksh. 500, Ksh. 200, Ksh. 100 and Ksh. 50

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The available coins are Ksh. 20, Ksh. 10.Ksh. 5, Ksh. 2 and Ksh. 1.

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Convert the following amounts into notes, coins or cents..

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1.Convert Ksh. 350 into notes.

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To convert Ksh. 350 into notes, we can use the largest denominations first. The available notes are KES 100, KES 50 in this case. We can express KES 350 as:

\begin{gather*} 350 = 3 \times 100 + 1 \times 50 \end{gather*}

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So, Ksh. 350 can be made using:

\begin{align*} 3 × 100 = \amp 300\, \text{shilling notes} \\ 1 × 50 = \amp \text 5\, \text{shilling note} \end{align*}

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Therefore, KES 350 can be made using 3 notes of KES 100 and 1 note of KES 50.

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2. Convert 7 shillings and 85 cents to cents only.

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To convert shillings to cents, we multiply the number of shillings by 100 and add the cents.

\begin{gather*} (7 \times 100) + 85 = 700 + 85 = 785 \text{ cents} \end{gather*}

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So, 7 shillings and 85 cents = 785 cents.

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Convert 645 cents to shillings and cents.

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To convert cents to shillings, we divide the number of cents by 100. The quotient gives us the number of shillings and the remainder gives us the cents

\begin{gather*} 645 \div 100 = 6 \text{ shillings } \text{ and } 45 \text{ cents} \end{gather*}

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So, 645 cents = 6 shillings and 45 cents.

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4. Using 100, 50, and 20 shilling notes, how can you make KES 270?

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To make KES 270 using the available notes, we can use:

\begin{gather*} 2 \times 100 + 1 \times 50 + 1 \times 20 \end{gather*}

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So, KES 270 can be made using:

\begin{align*} 2 × 100 = \amp 200\, \text{shilling notes} \\ 1 × 50 = \amp 50\, \text{shilling note} \\ 1 × 20 = \amp 20\, \text{shilling note} \end{align*}

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Therefore, KES 270 can be made using 2 notes of KES 100, 1 note of KES 50, and 1 note of KES 20.

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Checkpoint 3.5.4.

Exercise: Currency Conversion

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Now, try these exercises to practice converting between shillings and cents, and using notes.

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1.Convert Ksh. 780 into the fewest number of notes.

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2. Convert 925 cents to shillings and cents.

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3. Write 12 shillings and 30 cents as cents only.

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4. Using 100, 50, and 20 shilling notes, how can you 4make KES 270?

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Activity 3.5.7.

Figure 3.5.5. Introduction to currency exchange video

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Develop a table showing the exchange rates for the Kenyan Shilling (KSH) against other currencies. The exchange rates should include the buying and selling rates for each currency as shown below.

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Table 3.5.6. Exchange Rates for Kenyan Shilling (KSH)

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Currency	Symbol	Buying Rate (KSH)	Selling Rate (KSH)
Uganda	Ugandan Shilling	UGX	≈ 27.76 UGX
Tanzania	Tanzanian Shilling	TZS	20.44 TZS
Rwanda	Rwandan Franc	RWF	11.13 RWF
Burundi	Burundian Franc	BIF	23.07 BIF
South Sudan	South Sudanese Pound	SSP	1.01 SSP
US Dollar	$	129.20	129.20
Euro	€	151.51	151.51
British Pound	£	175.50	175.50

In this activity you’re required to watch the video below to learn about currency exchange rates and how to convert currencies.

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Figure 3.5.7. Currency exchange rates

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$\textbf{Key Takeaway}$

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Currency conversion is the process of changing money from one country’s currency into another’s using an exchange rate.
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Currency conversion is important for international trade, travel, online shopping, and remittances. It allows individuals and businesses to exchange money for goods and services in different countries, receive and send money from abroad etc.
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An exchange rate shows how much one unit of a currency is worth in another currency. Exchange rates change regularly due to supply and demand in the global market.
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$\textbf{Note:}$ Exchange rates can vary between banks and money exchange services, so it’s important to check the current rates before converting money.

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Sometimes there are charges or fees for converting currency

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To convert currency: $\text{Amount in New Currency} = \text{Amount in Original Currency} \times \text{Exchange Rate}$

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Example 3.5.8.

Convert $100 to Kenya Shillings, if 1 USD = 150 KES

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Solution.

To convert $100 to KES, we multiply the amount in USD by the exchange rate: $\text{Amount in New Currency} = \text{Amount in Original Currency} \times \text{Exchange Rate}$

\begin{align*} = \amp \frac{\cancel{$}\,100 \times \text{Ksh} 150}{1\,\cancel $} \\ = \amp \text{Ksh}.15,000 \end{align*}

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Subsection 3.5.3 Conversion of currencies from Kenya Shillings to other currencies

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Activity 3.5.8.

When you want to convert Kenya Shillings (KES) to other currencies, you need to know the exchange rate. The exchange rate tells you how much one currency is worth in terms of another currency.

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Exchange rate link

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https://share.google/7CkDZSTsJu2oKR0D7 Click here to check the exchange rate for any country to Ksh.

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Table 3.5.9. Exchange Rates for East African and International Currencies (as of July 2025)

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Country	Currency	Symbol	Buying Rate	Selling Rate
Kenya	Kenya Shilling	KES	127.50	129.00
Tanzania	Tanzanian Shilling	TZS	56.30	58.10
Uganda	Ugandan Shilling	UGX	35.90	37.20
Rwanda	Rwandan Franc	RWF	11.00	12.20
Burundi	Burundian Franc	BIF	0.045	0.053
South Sudan	South Sudanese Pound	SSP	1.10	1.25
United States	US Dollar	USD	155.50	158.00
European Union	Euro	EUR	168.00	171.00
United Kingdom	British Pound	GBP	198.30	202.00
Japan	Japanese Yen	JPY	1.05	1.10

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Subsection 3.5.4 Import duty charged on goods and services

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Activity 3.5.9. Understanding Import Duty.

When goods are brought into a country from another country, this is called importing. The government may charge an $\textbf{import duty}$—a type of tax—to help protect local businesses and raise revenue.

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In this activity, you will work in groups to decide which imported product you would choose and calculate the import duty and total cost.

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Imagine you are a business owner in Kenya who wants to import products from other countries. The government charges import duty on certain goods, which affects how much you pay for them.

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Work in pairs or groups. Each group will pick one product from the list below and follow the steps provided.

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Here are some products you can choose from:

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School Buses – Value: Ksh 2,000,000 – Import duty: 25%
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Laptops – Value: Ksh 120,000 – Import duty: 10%
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Clothing – Value: Ksh 80,000 – Import duty: 15%
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Machinery – Value: Ksh 300,000 – Import duty: 20%
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🔹 Choose one product your group would import and explain why you chose it.

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🔹 Calculate the import duty using the formula: $\textbf{Import Duty = (Rate ÷ 100) × Value of the product}$

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🔹 Add the import duty to the original product value to find the total cost after importing.

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🔹 If the import duty was reduced by 5%, how would this affect your total cost? Would it change your choice? Discuss.

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Example 3.5.10. Example: Calculating Import Duty on Machinery.

A business is importing machinery worth Ksh 300,000. The import duty is 20%.

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Solution.

Step 1: Calculate the import duty: Import Duty = (20 ÷ 100) × 300,000 = Ksh 60,000

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Step 2: Add the duty to the original price: Total Cost = 300,000 + 60,000 = Ksh 360,000

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So, the total cost after importing is $\textbf{Ksh 360,000}\text{.}$

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Example 3.5.11. Example: Import and Excise Duty Calculation.

Alex imported a generator with a customs value of Ksh 60,000. He was charged an import duty of 12% and an excise duty of 15%.

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How much did he pay as import duty?
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Calculate the excise value for the generator.
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Determine the excise duty paid.
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How much money did Alex pay in total for the generator?
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Solution.

Calculate the import duty:

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\begin{align*} \text{Import Duty} = 12\% \text{ of } 60,000 = \frac{12}{100} \times 60000 \amp = 7,200 \end{align*}

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Excise value = Customs value + Import duty:

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\begin{align*} 60000 + 7200 \amp = 67,200 \end{align*}

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Calculate the excise duty:

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\begin{align*} 15\% \text{ of } 67200 = \frac{15}{100} \times 67200 \amp = 10,080 \end{align*}

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Total amount paid = Customs value + Import duty + Excise duty:

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\begin{align*} 60000 + 7200 + 10080 \amp = 77,280 \end{align*}

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$\textbf{Alex paid a total of Ksh 77,280 for the generator.}$

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Subsection 3.5.5 Export duty charged on goods and services

Activity 3.5.10.

In this activity, you will act as an export officer in Kenya. Your task is to understand how export duty works and how it affects the money you earn from exporting goods.

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Imagine you run a business in Kenya. You want to export your products to earn money. But the government charges export duty on certain goods. Your job is to choose the best product to export and calculate the duty you will pay.

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Work in pairs or groups. Each group picks one product from the list below and follows the steps provided.

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Here are some products you can choose from:

Coffee – Value: Ksh 70,000 – Export duty: 5%
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Flowers – Value: Ksh 50,000 – Export duty: 4%
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Tea – Value: Ksh 90,000 – Export duty: 6%
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Hides and Skins – Value: Ksh 60,000 – Export duty: 10%
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🔹 Choose one product to export from the list above. Discuss and write down why you chose it.

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🔹 Calculate the export duty for your chosen product using this formula: $\textbf{Export Duty = (Rate ÷ 100) × Value of the product}$

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🔹 Subtract the export duty from the product’s value to find out how much money you will actually earn.

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🔹 Now imagine the export duty increases by 2%. Recalculate your earnings. Would your group still export the same product? Why or why not?

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This activity helps you understand how export duty affects business profits and the choices exporters make in the real world.

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$\textbf{Key Takeaway} $

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Export duty is a tax imposed by the government on goods that are sent out of the country. This duty is charged to ensure that the country benefits from the export of its resources.

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$\textbf{NOTE:}$

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When goods are sent out of a country to be sold in other countries, this is called exporting. Sometimes, the government adds a charge called $\textbf{export duty}$ on the goods. This money helps support the country’s economy.

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Example 3.5.12.

A company in Kenya exports coffee worth Ksh 50,000. If the government charges an export duty of 5%, how much duty must the company pay?

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Hint.

To find the export duty, multiply the value of the goods by the duty rate (as a decimal).

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Solution.

Export duty = 5% of Ksh 50,000 = (5/100) × 50,000 = Ksh 2,500.

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The company will pay Ksh 2,500 as export duty.

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Example 3.5.13.

A farmer exports tea worth Ksh 120,000. If the export duty rate is 3%, how much duty will the farmer pay?

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Solution.

Export duty = 3% of Ksh 120,000 = (3/100) × 120,000 = Ksh 3,600.

\begin{align*} \amp \end{align*}

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The farmer will pay Ksh 3,600 as export duty.

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Example 3.5.14. Example: Export Duty on Mangoes.

A trader exports mangoes worth Ksh 80,000. If the export duty rate is 2.5%, how much duty will the trader pay?

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Hint.

To find the export duty, multiply the value of the mangoes by the export duty rate (as a decimal).

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Solution.

Export duty = 2.5% of Ksh 80,000 = (2.5/100) × 80,000 = Ksh 2,000.

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The trader will pay Ksh 2,000 as export duty.

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Subsection 3.5.6 Excise duty charged on goods and services

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Activity 3.5.11. Understanding Excise Duty.

Excise duty is a tax charged by the government on specific goods produced or sold in a country, especially items like fuel, alcohol, cigarettes, and sugary drinks. It is used to reduce consumption of harmful products and to raise government revenue.

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In this activity, you’ll choose a product, calculate the excise duty, and explore how this tax affects pricing.

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Petrol – Price: Ksh 180 per litre – Excise duty: Ksh 21 per litre
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Soft drinks – Price: Ksh 150 per litre – Excise duty: 10%
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Cigarettes – Price: Ksh 500 per pack – Excise duty: 30%
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Beer – Price: Ksh 200 per bottle – Excise duty: Ksh 60 per bottle
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🔹 Choose one product from the list above and explain why excise duty is applied to it.

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🔹 Calculate the excise duty using the appropriate method: $\textbf{Fixed duty per item}$ or $\textbf{Percentage of the price}\text{.}$

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🔹 Add the excise duty to the original price to get the total price a customer would pay.

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🔹 Discuss how excise duty might influence consumer behavior. Would people buy less of the product? Why or why not?

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Example 3.5.15. Example: Excise Duty on Cigarettes.

A packet of cigarettes costs Ksh 500. The excise duty is 30%.

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Solution.

Step 1: Calculate the excise duty: (30 ÷ 100) × 500 = Ksh 150

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Step 2: Add the excise duty to the original price: Total Price = 500 + 150 = Ksh 650

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The customer will pay $\textbf{Ksh 650}$ for one packet of cigarettes after excise duty is added.

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Example 3.5.16. Example: Excise Duty on Soft Drinks in Kenya.

In Kenya, a 1-litre bottle of soda costs Ksh 150. The government applies an excise duty of 10%.

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Solution.

Step 1: Calculate the excise duty: (10 ÷ 100) × 150 = Ksh 15

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Step 2: Add the duty to the original price: Total Price = 150 + 15 = Ksh 165

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In Kenya, the customer pays $\textbf{Ksh 165}$ after excise duty on a 1-litre bottle of soda.

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Example 3.5.17. Example: Excise Duty on Petrol in Uganda.

In Uganda, the price of petrol is UGX 5,000 per litre. The excise duty is fixed at UGX 1,200 per litre.

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Solution.

Step 1: Add the fixed excise duty to the base price: Total Price = 5,000 + 1,200 = UGX 6,200

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In Uganda, the customer pays $\textbf{UGX 6,200}$ per litre of petrol including excise duty.

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Subsection 3.5.7 Value added tax charged on goods and services

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Activity 3.5.12. Activity: Understanding Value Added Tax (VAT).

Amina visited a supermarket to buy some household items. After shopping, she was issued a receipt that included the following items:

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Table 3.5.18.

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$\textbf{Item}$	$\textbf{Quantity}$	$\textbf{Unit Price (Ksh)}$	$\textbf{VAT Rate}$
Cooking oil	2	300	16%
Books	3	250	0%
Petrol	1	1500	16%
Medicine	1	200	0%
Cooking gas	1	1200	8%
Bread	2	60	0%
Exercise books	5	80	16%
Mobile data bundle	1	300	16%

Calculate the total cost of each item (before VAT).
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Calculate the VAT charged for each item where applicable.
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Determine the total VAT paid on all items.
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What is the grand total Amina paid at the supermarket?
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Why do you think some items are charged VAT while others are not?
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Discuss the importance of VAT in Kenya with your classmates.
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Subsection 3.5.8 Use of money in day to day activities

Activity 3.5.13. Use of Money in Day-to-Day Life.

Money plays an important role in our daily lives. We use it to pay for food, transport, education, communication, entertainment, and other basic needs. Making good choices on how to spend and save money is a key life skill.

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In this activity, you will explore how money is used in real-life situations and practice basic decision-making with money.

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Buying food and groceries for the family
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Paying school fees or buying school supplies
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Using public transport (e.g., matatus or buses)
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Airtime and internet bundles
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Savings and mobile money transfers (e.g., M-Pesa)
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🔹 Choose two areas from the list above. For each, explain how money is used and how much a typical cost might be.

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🔹 Imagine you are given Ksh 1,000. Create a simple spending plan using it to cover needs from the areas you chose.

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🔹 What would you do if your money is not enough? What could you reduce, avoid, or save for later?

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🔹 Why is it important to budget your money? Share your ideas with a classmate or in a group.

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Example 3.5.19. Example: Using Money to Buy School Supplies.

A student is given Ksh 1,000 to buy the following school items:

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2 Exercise books at Ksh 60 each
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1 Mathematical set at Ksh 250
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3 Pens at Ksh 25 each
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How much will the student spend in total, and how much money will be left after shopping?

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Solution.

$\textbf{Step 1:}$ Calculate the total cost of exercise books.

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\begin{align*} 2 \times 60 \amp = 120 \end{align*}

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$\textbf{Step 2:}$ Cost of mathematical set is:

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\begin{align*} 250 \amp = 250 \end{align*}

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$\textbf{Step 3:}$ Calculate the cost of pens.

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\begin{align*} 3 \times 25 \amp = 75 \end{align*}

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$\textbf{Step 4:}$ Add all the costs to find the total spent.

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\begin{align*} 120 + 250 + 75 \amp = 445 \end{align*}

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$\textbf{Step 5:}$ Subtract total cost from the amount given.

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\begin{align*} 1000 - 445 \amp = 555 \end{align*}

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$\textbf{The student will spend Ksh 445 and have Ksh 555 left.}$

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Example 3.5.20. Example: Using Money to Buy Grocery Items.

A parent gives Joy Ksh 800 to buy the following from the market:

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2 kg of rice at Ksh 150 per kg
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🔗
1 litre of cooking oil at Ksh 320
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🔗
6 bananas at Ksh 10 each
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🔗

🔗

Joy needs to calculate the total cost of these items.

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How much will Joy spend in total, and how much will remain?

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Solution.

$\textbf{Step 1:}$ Cost of rice:

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\begin{align*} 2 \times 150 \amp = 300 \end{align*}

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$\textbf{Step 2:}$ Cost of cooking oil:

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\begin{align*} 320 \amp = 320 \end{align*}

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$\textbf{Step 3:}$ Cost of bananas:

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\begin{align*} 6 \times 10 \amp = 60 \end{align*}

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$\textbf{Step 4:}$ Total cost:

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\begin{align*} 300 + 320 + 60 \amp = 680 \end{align*}

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$\textbf{Step 5:}$ Remaining money:

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\begin{align*} 800 - 680 \amp = 120 \end{align*}

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$\textbf{Joy will spend Ksh 680 and remain with Ksh 120.}$

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Example 3.5.21. Example: Using Money for a School Trip.

A group of students is going on a school trip. The bus fare is Ksh 450 per student. Each student also needs Ksh 150 for lunch and Ksh 100 for park entry.

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What is the total amount each student should carry for the trip?

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Solution.

$\textbf{Step 1:}$ Add up the costs:

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\begin{align*} 450 + 150 + 100 \amp = 700 \end{align*}

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$\textbf{Each student should carry Ksh 700 for the trip.}$

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\(\textbf{Item}\)	\(\textbf{Quantity}\)	\(\textbf{Unit Price (Ksh)}\)	\(\textbf{VAT Rate}\)
Cooking oil	2	300	16%
Books	3	250	0%
Petrol	1	1500	16%
Medicine	1	200	0%
Cooking gas	1	1200	8%
Bread	2	60	0%
Exercise books	5	80	16%
Mobile data bundle	1	300	16%