Ch 7: Introduction to Money 💰🪙

 

Chapter 7: Introduction to Money 💰🪙

Welcome, PSTET Aspirants! 🌟

Money makes the world go round! Teaching children about money is one of the most practical and exciting parts of mathematics. It connects classroom learning to real-life situations—shopping, saving, and planning expenses. For PSTET (Paper 1), this chapter is crucial because it tests both your mathematical skills and your ability to teach financial literacy to young learners.

In this comprehensive chapter, we'll explore Indian currency, conversion between rupees and paise, basic operations with money, and even simple budgeting. Let's become money masters! 🚀

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7.1 Identifying Coins and Currency Notes: Indian Currency 🇮🇳

The first step in teaching money is helping children recognize and differentiate between various coins and notes. Indian currency, the Indian Rupee (INR) with symbol ₹, consists of 100 paise .

🪙 Coins in Circulation

Indian coins come in various denominations. Here's a comprehensive table:

Denomination	Shape	Metal Composition	Obverse (Front)	Reverse (Back)	Common Nickname
50 Paise	Circular	Ferritic stainless steel	Lion Capitol	Emblem with "Satyamev Jayate"	Small coin (rarely used)
₹1	Circular	Ferritic stainless steel	Lion Capitol	Hand showing thumb (mudra)	One rupee coin
₹2	Circular	Ferritic stainless steel	Lion Capitol	Hand showing two fingers	Two rupee coin
₹5	Circular	Nickel-brass	Lion Capitol	Floral motif	Five rupee coin
₹10	Circular with 12 edges	Bi-metallic (outer ring: nickel-brass, inner: cupro-nickel)	Lion Capitol	Value with floral pattern	Ten rupee coin
₹20	Circular with 12 edges	Bi-metallic	Lion Capitol	Value with grains	Twenty rupee coin

Teaching Tip: Let children sort real or play coins by size, color, and shape. This tactile experience builds recognition faster than any worksheet!

💵 Currency Notes in Circulation

According to the Reserve Bank of India (RBI), banknotes are currently issued in denominations of ₹10, ₹20, ₹50, ₹100, ₹200, and ₹500. ₹2000 notes, while still legal tender, are being withdrawn from circulation .

Denomination	Mahatma Gandhi (New) Series Features	Dominant Colour	Motif on Reverse	Size (mm)
₹10	See-through register, latent image, micro-lettering	Chocolate brown	Sun temple, Konark	123 × 63
₹20	See-through register, latent image, micro-lettering	Greenish yellow	Ellora caves	129 × 63
₹50	See-through register, latent image, micro-lettering	Fluorescent blue	Hampi with chariot	135 × 66
₹100	See-through register, latent image, micro-lettering	Lavender	Rani ki Vav (stepwell)	142 × 66
₹200	See-through register, latent image, micro-lettering	Bright yellow	Sanchi Stupa	146 × 66
₹500	See-through register, latent image, micro-lettering	Stone grey	Red Fort	150 × 66

Security Features to Teach Children: 

Feature	Description	How to Check
Watermark	Mahatma Gandhi portrait and electrotype denomination number	Hold note against light
Security Thread	Silver thread with inscriptions	Visible when held against light
See-through Register	Floral design on left side	Hold note against light to see perfect floral shape
Latent Image	Denomination value	Hold note horizontally at eye level
Micro-lettering	Tiny letters "RBI" and denomination	Use magnifying glass
Intaglio Printing	Raised printing	Feel with fingers (helps visually impaired)

Classroom Activity: Create a "Currency Museum" in your classroom. Have students bring different notes and coins (with permission), observe them carefully, and record their features in a chart.

🏛️ Legal Tender Status

The Indian Rupee is the official currency of India. Here are important facts every teacher should know :

• Legal Tender: All banknotes issued by RBI (₹10 and above) and coins issued by Government of India are legal tender for any amount.

• Coin Acceptance Limits:

  • Coins of ₹1 and above: Legal tender for any sum up to ₹1000 in a single transaction

  • 50 paise coin: Legal tender for any sum up to ₹10

  • Anyone can voluntarily accept coins beyond these limits, but cannot be forced to do so

• Demonetized Notes: ₹500 and ₹1000 notes of the Mahatma Gandhi series issued up to November 8, 2016, have ceased to be legal tender

PSTET Tip: Questions about legal tender limits and demonetization sometimes appear in general knowledge sections. Remember these key facts!

📱 RBI Resources for Teachers

The RBI has launched excellent resources to educate the public about currency :

• Microsite: https://indiancurrency.rbi.org.in — Offers 360-degree views of banknotes, interactive games, and videos

• RBI Kehta Hai website: Detailed information about banknote features 

• RBI MANI app: Helps visually impaired persons identify denominations (does NOT detect counterfeit notes)

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7.2 Conversion of Money: Rupees to Paise and Vice-Versa 🔄

Understanding the relationship between rupees and paise is fundamental. 1 Rupee = 100 Paise .

📊 Rupees and Paise: The Basics

Concept	Explanation	Example
Symbol	Rupees: ₹, Paise: p	₹25.50 means 25 rupees and 50 paise
Decimal Representation	Rupees and paise are separated by a dot (.)	₹24.65 = 24 rupees and 65 paise
Place Value	Two digits after decimal represent paise	₹45.05 = 45 rupees and 5 paise

🔢 Converting Rupees to Paise

Rule: Multiply the rupee amount by 100 to convert to paise .

Type	Rupees	Calculation	Paise
Whole Rupees	₹5	5 × 100	500 paise
Whole Rupees	₹15	15 × 100	1500 paise
With Paise	₹10.45	(10 × 100) + 45 = 1000 + 45	1045 paise
With Paise	₹7.08	(7 × 100) + 8 = 700 + 8	708 paise

Step-by-Step Method for Converting ₹X.YZ to Paise:

1. Multiply the whole rupees (X) by 100 → gives X × 100 paise

2. Add the paise part (YZ) → (X × 100) + YZ paise

3. That's your answer!

Example: Convert ₹23.75 to paise

• Step 1: 23 × 100 = 2300 paise

• Step 2: 2300 + 75 = 2375 paise

🔢 Converting Paise to Rupees

Rule: Divide the paise amount by 100 to convert to rupees. Place a decimal point after two digits from the right .

Type	Paise	Calculation	Rupees
Less than 100p	75 paise	75 ÷ 100	₹0.75
Exactly 100p	500 paise	500 ÷ 100	₹5.00
More than 100p	145 paise	145 ÷ 100 = 1.45	₹1.45
Large Amount	1256 paise	1256 ÷ 100 = 12.56	₹12.56

Step-by-Step Method for Converting Paise to Rupees:

1. Count the digits in the paise amount

2. If there are two digits or less, put a decimal point before them with a zero in rupees

3. If there are three or more digits, put a decimal point after the first digit(s) from the right

Shortcut: Take the paise number and place a decimal point before the last two digits.

Paise	Put decimal before last two digits	Rupees
75	0.75	₹0.75
450	4.50	₹4.50
800	8.00	₹8.00
1250	12.50	₹12.50

📝 Expressing Money in Different Forms

Form	Example	How to Read
Decimal Form	₹4.75	Four rupees seventy-five paise
Long Form	4 rupees 75 paise	Four rupees and seventy-five paise
Only Rupees	₹4.00	Four rupees
Only Paise	475 paise	Four hundred seventy-five paise

Practice Examples: 

• ₹1.09 = 1 rupee 9 paise

• ₹5.50 = 5 rupees 50 paise

• ₹32.15 = 32 rupees 15 paise

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7.3 Basic Operations with Money 🧮💰

Once students can identify money and convert between units, they're ready to use money in calculations. This connects directly to real-life shopping experiences.

➕ Addition of Money

Adding money is similar to adding decimal numbers. The key is to align the decimal points correctly .

Steps for Adding Money:

1. Write the amounts in rupees and paise, aligning the decimal points

2. Add the paise column first

3. If paise add up to 100 or more, convert 100 paise to 1 rupee and carry over

4. Add the rupees column

5. Place the decimal point correctly in the answer

Example 1 (Simple): Add ₹45.50 and ₹6.50

text

   ₹45.50
 + ₹ 6.50
 --------
   ₹52.00

Example 2 (With Carry): Riya bought vegetables for ₹86.00 and fruits for ₹72.00. How much did she spend altogether? 

text

   ₹86.00
 + ₹72.00
 --------
  ₹158.00

Answer: ₹158.00

Example 3 (Real-life): A packet of biscuits costs ₹15.50. What is the cost of 6 packets? 

This requires multiplication, which we'll cover later!

➖ Subtraction of Money

Subtraction follows the same decimal alignment principles .

Steps for Subtracting Money:

1. Write the amounts with aligned decimal points

2. Subtract the paise column first (borrow from rupees if needed—1 rupee = 100 paise)

3. Subtract the rupees column

4. Place the decimal point correctly

Example 1 (Simple): Subtract ₹332.25 - ₹180.50 

text

   ₹332.25
 - ₹180.50
 --------
   ₹151.75

Example 2 (With Borrowing): Two friends wanted to buy a book costing ₹500. Ritu had ₹170 and Vani had ₹260. How much more money do they need? 

Step 1: Find total money they have = ₹170 + ₹260 = ₹430
Step 2: Subtract from cost = ₹500 - ₹430

text

   ₹500.00
 - ₹430.00
 --------
   ₹70.00

Answer: They need ₹70 more.

🧮 Multiplication and Division of Money

For PSTET level, students should be able to multiply and divide money amounts by whole numbers .

Multiplication of Money:

1. Write the amount in rupees and paise

2. Multiply using the rule for decimal multiplication

3. Place the decimal point correctly in the product

Example: Multiply ₹35.09 by 2 

• 35.09 × 2 = ₹70.18

Example: Cost of one machine is ₹13678.55. Find cost of 19 machines 

• 13678.55 × 19 = ₹259892.45

Division of Money:

1. Divide the amount by the number as you would divide whole numbers

2. Place a decimal point in the quotient after two digits from the right

Example: Divide ₹25.05 by 5 

• 25.05 ÷ 5 = ₹5.01

🏪 Calculating Total Cost and Change

This is the most practical application—shopping!

The Shopping Formula:

• Total Cost = Sum of prices of all items purchased

• Change = Money Given - Total Cost

Example 1 (Menu Problem) :

Ramesh and friends order from this menu:

Item	Price
Burger	₹75 each
Pizza	₹350 each
French Fries	₹90
Ice cream	₹70 per scoop

They order:

• 2 burgers

• 5 French fries

• 5 scoops of ice cream

Questions:

1. Find total amount paid

2. If 5 friends share equally, each person's share?

3. If they give ₹1000, change received?

Solution:

Step 1: Calculate cost of each item

• 2 burgers = ₹75 × 2 = ₹150

• 5 French fries = ₹90 × 5 = ₹450

• 5 scoops ice cream = ₹70 × 5 = ₹350

Step 2: Total cost = ₹150 + ₹450 + ₹350 = ₹950

Step 3: Each friend's share = ₹950 ÷ 5 = ₹190 per person

Step 4: Change from ₹1000 = ₹1000 - ₹950 = ₹50

Example 2 (Simple Shopping):
A notebook costs ₹25.50 and a pen costs ₹15.75. If you buy both and give ₹50, how much change do you get?

• Total = ₹25.50 + ₹15.75 = ₹41.25

• Change = ₹50.00 - ₹41.25 = ₹8.75

📋 Rate Charts and Bill Preparation

Teaching children to read rate charts and prepare bills is an excellent real-world skill .

Sample Rate Chart:

Item	Price
Apples	₹80 per kg
Bananas	₹40 per dozen
Milk	₹55 per liter
Bread	₹35 per packet

Bill Preparation Exercise:
Prepare a bill for:

• 2 kg apples

• 1 dozen bananas

• 3 liters milk

• 2 packets bread

Item	Quantity	Rate	Amount
Apples	2 kg	₹80/kg	₹160
Bananas	1 dozen	₹40/dozen	₹40
Milk	3 liters	₹55/liter	₹165
Bread	2 packets	₹35/packet	₹70
TOTAL			₹435

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7.4 Planning a Budget: Simple Exercises 📋💡

Budgeting is a life skill that even young children can begin to learn. For PSTET, you should understand how to introduce simple budgeting concepts through classroom activities .

🎯 What is a Budget?

A budget is a plan for how to spend money. It helps us make sure we have enough for the things we need and want .

Key Budgeting Concepts for Children:

Concept	Kid-Friendly Explanation	Example
Income	Money that comes in	Pocket money, gift money, allowance
Expenses	Money that goes out	Buying snacks, toys, school supplies
Savings	Money kept for later	Piggy bank money
Needs	Things you must have	Food, school books
Wants	Things you'd like to have	Candy, toys, movies

🎉 Classroom Activity: Planning a Class Party Budget

This is an excellent hands-on budgeting exercise for students.

Scenario: Your class has ₹500 to spend on a small party. Plan what to buy.

Step 1: List needed items

Item	Estimated Cost
Snacks	₹200
Juice	₹150
Decorations	₹100
Paper plates/cups	₹50
TOTAL	₹500

Step 2: Research actual prices

Item	Actual Price
Potato chips (2 packets)	₹100
Biscuits (2 packets)	₹80
Juice (2 liters)	₹120
Balloons and streamers	₹80
Paper plates and cups	₹60
TOTAL	₹440

Step 3: Make decisions

• Total cost = ₹440, which is less than ₹500

• We have ₹60 left! What should we do with it?

  • Option A: Buy more snacks

  • Option B: Save it for next time

  • Option C: Buy a small gift for the class

Step 4: Reflect

• Did we stay within budget? Yes!

• What would we do differently next time?

💰 Simple Monthly Budget for a Student

Income	Amount
Pocket money	₹300
Gift from grandmother	₹200
Total Income	₹500

Expenses	Amount
School snacks (₹20 × 10 days)	₹200
Notebooks and pencils	₹100
Movie with friends	₹150
Total Expenses	₹450

Savings	Amount
Money left to save	₹50

Discussion Questions:

1. Did the student spend more than they earned? (No)

2. How much could they save in 3 months? (₹150)

3. What could they buy with savings?

🏦 The "Save, Spend, Share" Method

A simple budgeting framework for children :

Category	Percentage	Purpose
Save 🏦	20-30%	For future goals (toy, bike, gift)
Spend 🛍️	50-60%	For everyday wants (snacks, small toys)
Share 🤝	10-20%	For charity, gifts for others

Activity: Give students ₹100 (play money) and three jars labeled SAVE, SPEND, SHARE. Have them divide the money and explain their choices.

📝 Budgeting Word Problems

Problem 1: Raj gets ₹100 pocket money each week. He wants to save ₹50 per week for a new game costing ₹500. How many weeks will it take?

• Savings per week = ₹50

• Weeks needed = ₹500 ÷ ₹50 = 10 weeks

Problem 2: Meena has ₹250. She needs to buy lunch for 5 days at ₹30 per day. Does she have enough?

• Total lunch cost = 5 × ₹30 = ₹150

• She has ₹250 > ₹150, so yes, she has enough.

• Money left = ₹250 - ₹150 = ₹100

Problem 3: A class of 40 students wants to buy a gift for their teacher costing ₹800. If they share equally, how much should each contribute?

• Each student's share = ₹800 ÷ 40 = ₹20

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Chapter 7 Exercises: Test Your Money Skills 🧪📝

A. Identify the Currency 🪙💵

Match the following denominations with their features:

Column A (Denomination)	Column B (Feature)
1. ₹500 note	A. Motif of Sanchi Stupa
2. ₹200 note	B. Motif of Red Fort
3. ₹100 note	C. Motif of Ellora Caves
4. ₹50 note	D. Motif of Rani ki Vav
5. ₹20 note	E. Motif of Hampi with chariot

B. Conversion Problems 🔢

Convert the following: 

1. ₹7.00 into paise

2. ₹10.45 into paise

3. 145 paise into rupees

4. 1256 paise into rupees

5. ₹32.15 into paise

6. 500 paise into rupees

7. 5 rupees 9 paise into decimal form

8. 4 rupees 75 paise into decimal form

C. Addition and Subtraction of Money ➕➖

Solve the following: 

1. ₹45.50 + ₹6.50 = ?

2. ₹332.25 - ₹180.50 = ?

3. ₹784.99 - ₹342.63 = ?

4. Riya bought vegetables for ₹86 and fruits for ₹72. Total spent?

5. Sony spent ₹86 and Richa spent ₹72. How much together?

D. Shopping Word Problems 🛒

1. The Bookstore: A book costs ₹125.50 and a notebook costs ₹45.75. If you buy both and give ₹200, how much change will you get?

2. The Stationery Shop: A pack of pencils costs ₹35, an eraser costs ₹8, and a sharpener costs ₹12. Rohan buys 2 packs of pencils, 3 erasers, and 2 sharpeners. He gives a ₹200 note. How much change does he get?

3. The Fruit Vendor: Apples are ₹80 per kg and oranges are ₹60 per kg. Mrs. Sharma buys 2.5 kg apples and 1.5 kg oranges. She gives ₹500. How much change will she receive?

4. The Canteen Menu: 

   • Samosa: ₹15 each

   • Pakora: ₹10 each

   • Juice: ₹25 per glass

   • Ice cream: ₹30 per scoop

   Four friends order: 4 samosas, 6 pakoras, 2 juices, and 4 scoops ice cream.
   a) What is the total bill?
   b) If they share equally, how much does each pay?
   c) If they give ₹500, what change do they get?

E. Exchange of Money 🔄

How many different ways can you make ₹10 using coins and notes? List at least 5 combinations. 

F. Budgeting Problems 📋

1. Weekly Allowance: Amit gets ₹200 per week. He spends ₹30 daily on snacks (5 days) and saves the rest. How much does he save in a week? In a month (4 weeks)?

2. Party Planning: Your class has ₹800 for a party. You need:

   • Snacks: ₹250

   • Juice: ₹180

   • Decorations: ₹120

   • Games prizes: ₹150

   • Cake: ₹200

   Do you have enough money? If not, what could you reduce?

3. Saving for a Goal: Priya wants to buy a bicycle costing ₹3500. She saves ₹150 per week from her allowance and ₹200 per month from helping neighbors. How many weeks will it take to save enough?

4. Charity Donation: A class collects ₹2500 for charity. They decide to give 40% to an animal shelter and the rest to an orphanage. How much does each get?

G. Bill Preparation 🧾

Create a bill for the following purchases:

Scenario: Rahul goes to a grocery store and buys:

• 3 kg rice at ₹45 per kg

• 2 liters oil at ₹110 per liter

• 500 g tea at ₹240 per kg

• 1 kg sugar at ₹40 per kg

• 2 packets biscuits at ₹25 each

Prepare a proper bill with items, quantity, rate, and total amount.

H. True or False? ✅❌

1. 50 paise coins are legal tender for any sum up to ₹10.

2. ₹2000 notes are no longer legal tender.

3. 1 rupee = 100 paise.

4. The RBI MANI app can detect fake currency notes.

5. ₹500 notes have a motif of the Red Fort on the reverse.

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Answer Key 🔑

A. Identify the Currency

1-B, 2-A, 3-D, 4-E, 5-C

B. Conversion Problems

1. 700 paise

2. 1045 paise

3. ₹1.45

4. ₹12.56

5. 3215 paise

6. ₹5.00

7. ₹5.09

8. ₹4.75

C. Addition and Subtraction

1. ₹52.00

2. ₹151.75

3. ₹442.36

4. ₹158

5. ₹158

D. Shopping Word Problems

1. Total = ₹125.50 + ₹45.75 = ₹171.25; Change = ₹200 - ₹171.25 = ₹28.75

2. Cost = (2×35) + (3×8) + (2×12) = 70 + 24 + 24 = ₹118; Change = 200 - 118 = ₹82

3. Cost = (2.5×80) + (1.5×60) = 200 + 90 = ₹290; Change = 500 - 290 = ₹210

4. a) Total = (4×15)+(6×10)+(2×25)+(4×30) = 60+60+50+120 = ₹290
   b) Each pays = 290 ÷ 4 = ₹72.50
   c) Change = 500 - 290 = ₹210

E. Exchange of Money

Possible combinations for ₹10:

• One ₹10 note

• Two ₹5 coins

• One ₹5 coin + five ₹1 coins

• Ten ₹1 coins

• One ₹5 coin + one ₹2 coin + three ₹1 coins

• Five ₹2 coins

• One ₹2 coin + eight ₹1 coins
  (and many more!)

F. Budgeting Problems

1. Weekly snacks = ₹30 × 5 = ₹150; Weekly savings = ₹200 - ₹150 = ₹50; Monthly savings = ₹50 × 4 = ₹200

2. Total needed = ₹250+₹180+₹120+₹150+₹200 = ₹900; Shortfall = ₹100; Could reduce decorations or games prizes

3. Weekly saving = ₹150 + (₹200÷4) = ₹150 + ₹50 = ₹200 per week; Weeks needed = ₹3500 ÷ ₹200 = 17.5 weeks (18 weeks)

4. Animal shelter = 40% of ₹2500 = ₹1000; Orphanage = ₹2500 - ₹1000 = ₹1500

G. Bill Preparation

text

BILL
-------------------------------------
Item              Qty  Rate  Amount
-------------------------------------
Rice               3kg  ₹45   ₹135
Oil                2L   ₹110  ₹220
Tea               500g  ₹240  ₹120
Sugar              1kg  ₹40   ₹40
Biscuits           2    ₹25   ₹50
-------------------------------------
TOTAL                    ₹565
-------------------------------------

H. True or False

1. ✅ True (50 paise coins are legal tender up to ₹10)

2. ❌ False (₹2000 notes continue to be legal tender)

3. ✅ True

4. ❌ False (RBI MANI app helps visually impaired identify denominations, not detect fakes)

5. ✅ True

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Chapter Summary: Quick Revision Notes 📝

Concept	Key Point	Example
Indian Currency	1 Rupee = 100 Paise, Symbol ₹	₹500 note has Red Fort motif
Rupees → Paise	Multiply by 100	₹7.50 = 750 paise
Paise → Rupees	Divide by 100, decimal before last two digits	750 paise = ₹7.50
Adding Money	Align decimals, add, carry 100p = ₹1	₹45.50 + ₹6.50 = ₹52.00
Subtracting Money	Borrow 1 rupee = 100 paise	₹332.25 - ₹180.50 = ₹151.75
Total Cost	Sum of all items	Burger ₹75 + Fries ₹90 = ₹165
Change	Money given - Total cost	₹200 - ₹165 = ₹35
Budget	Plan for income and expenses	Save 20%, Spend 60%, Share 20%
Legal Tender	Coins: up to ₹1000; 50p: up to ₹10	Cannot refuse genuine currency

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PSTET Success Tip: For the exam, focus on:

• Conversion problems (rupees ↔ paise) — these are guaranteed questions! 💯

• Word problems involving change calculation — practice the "total then subtract" pattern 🛒

• Understanding legal tender limits and RBI resources — often in pedagogy sections 📚

• Simple budgeting exercises — connect to real life 📝

Common Student Errors to Watch For:

1. Decimal placement: Forgetting that paise are two digits after decimal (₹5.5 is wrong, ₹5.50 is correct) ❌

2. Conversion confusion: Multiplying instead of dividing when converting paise to rupees 🔄

3. Borrowing in subtraction: Forgetting that 1 rupee borrowed becomes 100 paise ⚠️

4. Change calculation: Subtracting money given from total (not total from money given) 🤔

Remedial Strategies:

• Use play money for hands-on practice 🎮

• Set up a class shop for role-play activities 🏪

• Practice with real rate lists from local shops 📋

• Use number line to show money on a scale 📏

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Money skills are life skills! By mastering this chapter, you're not just preparing for PSTET—you're preparing to teach children how to navigate the financial world with confidence. Every time they shop, save, or plan, they'll use these skills. 🌟

Happy Studying, Future Teachers! 📚🍎