Doing calculations with large numbers is easy
SportPesa mega jackpot winner Samuel Abisai addresses journalists in Nairobi on May 2, 2017. PHOTO | STELLA CHERONO |
What you need to know:
- This case illustrates the problems people face when doing calculations comprising large numbers.
- In this example, it should have been obvious that if you divide Sh45 million among 45 million people, each person gets just one shilling!
- Even though the numbers being divided are very large, you don’t need a calculator to do the sum.
- The “million” in the shillings cancels out with the “million” in the number of people. So, you are left with just 45 divided by 45. The answer is one: so, every person gets one shilling.
I had an interesting discussion with one of my readers recently. He said that his friends think the Sportpesa betting company is unfair. “Why are they giving the whole Sh230 million jackpot to one person, it should be shared with everybody – all the 44 million Kenyans – and give the lion’s share to the winner.”
Their proposal was to distribute Sh44m to everyone and the remaining Sh186m to the winner. According to their calculation, each Kenyan could get one million shillings.
Well, there is something seriously wrong with that calculation! If you want to give 45 million people one million shillings each, you will need a lot more that Sh45m. As I pointed out to the reader, the total sum is more than all the money in Kenya!
This case illustrates the problems people face when doing calculations comprising large numbers. In this example, it should have been obvious that if you divide Sh45 million among 45 million people, each person gets just one shilling!
Even though the numbers being divided are very large, you don’t need a calculator to do the sum. The “million” in the shillings cancels out with the “million” in the number of people. So, you are left with just 45 divided by 45. The answer is one: so, every person gets one shilling.
If you wanted to find out how much is required to give each person one million shillings, you multiply 45 million people by Sh1 million. Again, you don’t need a calculator. A million has six zeroes; therefore, the result will have 12 zeroes.
What is the name of the number with 12 zeroes? Well that depends on where you come from. The British call it a billion and Americans a trillion.
In Kenya, even though we were once a British colony, we follow the American nomenclature. Twelve zeroes mean a trillion. So, the answer to the multiplication is that you need Sh45 trillion!
Do we have that kind of money? The answer is NO! For starters, the total national budget (that is, what the government plans to spend in one year) is only about Sh2.5 trillion. But that is not all the money in Kenya.
The total money supply is regularly monitored by the Central Bank of Kenya and published in bank’s quarterly reports. The most recent report is for the period ending on November 30, 2017.
The total money supply (that is, currency notes and coins in circulation plus all bank deposits) at that time was Sh3 trillion. This is a lot smaller than the Sh45 trillion that would be required to pay each person in Kenya Sh1,000,000.
By the way, the same report records that the total currency in all the banks combined (including the Central Bank itself) was Sh31 billion while the total value of all bank balances was Sh2.246 trillion. Think about that. It’s not a typo: Sh31 billion in notes and coins versus Sh2.4 trillion in bank balances! Where is the rest of the money?
www.figures.co.ke Twitter: @mungaikihanya
