Introduction to Identifying Denominations
For everything we think of doing throughout the day, there is a chance of money being involved. Paying school fees, buying lunch during recess, to buy any item, you need money.
Denominations of money
In the past, barter system was used to trade. It is a system of exchange where participants in a transaction directly exchange goods or services for other goods or services. So, a sack of rice could be exchanged for, say, 5 sacks of salt. But modern currency has moved away from such exchanges and uses paper currency or coins for all commercial transactions. Denomination of currency notes or coin denotes the value of the note or the coin.
How do we understand the denominations?
You must recall how we learnt about numbers and their place values. Place values like units, tens, thousands, ten thousands, lakhs and so on. The denominations of numbers are counted in the same way. Currency notes or coins can be in units, tens, or hundreds, or thousands. So, if you have a thousand rupee note, it is equivalent to the thousands place value.
₹1, ₹10, ₹100 are all similar to the place values of Units, Tens and Hundreds respectively. This will help you operate with money.
The different denominations we use
Let us take a look at the image below, which tells us what are the different denominations of currency notes we have in India at present. These are our current denominations:
Every currency note or coin has a monetary value. The number of notes you have multiplied with the monetary value of the note gives you the total money you got. Arithmetic operations( Addition and Subtraction) are also applicable on currency notes.
Similarly, you have ₹100 and you spent ₹20. To know how much money you are left with, subtract 20 from 100. This means you are left with ₹80.
₹80 after spending ₹20.
8 notes of ₹10 are equivalent to 1 note of ₹.50 and 3 notes of ₹.10 by using addition.
The Importance of Understanding Denominations
Let us say you ask your father for some chocolates and cookies, and he gives you a ₹100 note. You buy 2 chocolate bars for ₹10 each, and you buy 3 cookies for ₹5 each. Your total expense
= (2 x 10) + (3 x 5) = 20 + 15 = 35.
You have done this math and handed over the hundred rupee note to the shopkeeper. You also do the math in your head and find out that you would get a change of ₹.65 back. But what are the denominations you will get your money back in? There are several ways, and a few are listed here:
For a two-digit value of money there are so many ways, so just imagine how many combinations of currency notes and coins would be there in larger numbers. That is why it is very important to understand denominations.