Dividing Money Amounts

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  • 0:00 Why Divide Money?
  • 0:32 Dividing Money by…
  • 1:20 Example One
  • 2:58 Dividing Money by Decimals
  • 3:29 Example Two
  • 4:33 Lesson Summary
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Lesson Transcript
Instructor: Kevin Newton

Kevin has edited encyclopedias, taught history, and has an MA in Islamic law/finance. He has since founded his own financial advice firm, Newton Analytical.

I'll be honest, dividing money is normally not as fun as multiplying money. After all, it's hard to let your hard-earned cash get reduced so quickly! However, this lesson shows how dividing money can help make sure you get the best deal on cookies and avoid getting ripped off.

Why Divide Money?

Let's face it--dividing money is not nearly as fun to think about as multiplying money. After all, most of us would be happy making more money rather than watching it get divided. However, being able to divide money amounts is a central part of being able to properly manage money. In this lesson, we're going to learn how to divide money by both whole numbers and decimals, allowing us to calculate everything from the cost per ounce of something to the price per square foot of a yard-raking business.

Dividing Money by Whole Numbers

First, let's start by dividing money by whole numbers. This is actually pretty easy since it follows many of the other rules for dividing any other number. By far, the most important part is to remember to make sure that your decimal points line up in both the dividend as well as the answer. Other than that, simply divide like you would any other amount, but with two important changes.

First, if you are dividing to find the unit cost of something, or anything else that would result in a dollar amount, be sure to remember the dollar sign. Second, you don't have to divide money amounts out much further than three decimal points, since we can't pay in fragments of a penny. In fact, the only reason that I say three decimal points is to be sure that you know whether or not to round up or down.

Example One

Let's take a look with this example. One of the best ways that dividing money amounts can help us is by letting us know which is the cheaper buy at the grocery store. Say that you are looking at two packs of cookies. One box of cookies is 24 ounces for $3.00. The other box of cookies is 40 ounces and costs $4.50. There is no difference in quality between the boxes, and to be fair, you'd be happy to have either. Because of this, the determining factor that will decide which box of cookies goes home with you is solely the price per ounce. So, how do you find that?

To find the price per ounce, simply divide the price by the number of ounces. Let's start with the smaller box. $3.00 divided by 24 ounces leaves us with a final price of 0.125 dollars per ounce. 24 goes into 3 zero times, 30 once, 60 twice, and then 120 five times. Normally, we wouldn't leave it to three decimal places, but since the difference can be so small here, this is one example of where it makes sense to do that.

So, what about the other box? $4.50 divided by 40 is 0.112 dollars per ounce. That's zero times into 4, one time into 45, one time into 50, and twice into 100. If you ended up with 0.1125, or 0.113, that just means you took the math further. In other words, you save a bit more than a penny by buying the larger box. That's fine by me, as I prefer the big box of cookies anyway.

Dividing Money by Decimals

Just when you thought that you had it all figured out, someone decided to throw a curveball at you and ask you to divide by a decimal. Luckily, this can be pretty easily done, as well. However, you've got to figure out what to do about that pesky decimal. Wouldn't it just be better for everyone if it just went away? Actually, that's a great idea. Move the decimal point to the right until you are left with a whole number. Now, move the decimal point in the dividend over by the same number of points. Then, just divide away as before!

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