Contemporary Business Mathematics with Canadian Applications, 12th Edition
By S. A. Hummelbrunner, Kelly Halliday, and Ali R. Hassanlou
Contents:
Preface … xi
Student’s Reference Guide to Rounding and Special Notations … xix
Part 0 Mathematics Fundamentals and Business Applications … 2
1 Review of Arithmetic … 4
1.1 Basics of Arithmetic . . . 5
1.2 Fractions … 7
1.3 Percent . . . 13
1.4 Applications-Averages .. . 17
1.5 Applications-Payroll … 24
1.6 Applications-Taxes … 32
BUSINESS MATH NEWS … 37
Review Exercise … 38
Self-Test .. . 40
Challenge Problems . . . 41
Case Study Businesses and the GST / HST … 42
Glossary .. . 43
2 Review of Basic Algebra … 45
2.1 Simplification of Algebraic Expressions … 46
2.2 Integral Exponents . . . 53
2.3 Fractional Exponents .. . 61
2.4 Logarithms-Basic Aspects … 64
BUSINESS MATH NEWS … 71
2.5 Solving Basic Equations … 72
2.6 Solving Equations Involving Algebraic Simplification . . . 77
2.7 Solving Word Problems .. . 82
Review Exercise … 88
Self-Test .. . 9 0
Challenge Problems … 91
Case Study Investing in a Tax-Free Savings Account . .. 92
Swrnnary of Formulas … 92
Glossary .. . 94
3 Ratio, Proportion, and Percent … 95
3.1 Ratios . . . 96
3.2 Proportions . . . 101
3.3 The Basic Percentage Problem . . . 107
3.4 Problems Involving Increase or Decrease … 115
3.5 Problems Involving Percent .. . 120
BUSINESS MATH NEWS … 124
3.6 Applications–Currency Conversions … 127
3.7 Applications-Index Numbers . .. 131
3.8 Applications-Personal Income Taxes .. . 134
Review Exercise . . . 136
Self-Test . . . 138
Challenge Problems . . . 13 9
Case Study The Business of Taxes … 140
Summary of Formulas … 14 1
Glossary … 141
4 Linear Systems … 142
4.1 Graphing Linear Equations . . . 143
4.2 Graphing Linear Systems of Equations in Two Variables … 155
CONTENTS VII
4.3 Algebraic Solution of Systems of Linear Equations in Two Variables .. . 159
BUSINESS MATH NEWS … 166
4.4 Problem Solving … 167
4.5 Graphing Inequalities .. . 172
4.6 Problem Solving … 178
Review Exercise . . . 180
Self-Test . . . 181
Challenge Problems . . . 181
Case Study Determining the Right Combination … 182
Summary of Formulas . .. 183
Glossary . . . 183
Part 1 Comprehensive Case … 184
Part • Mathematics of Business and Management … 188
5 Cost-Volume-Profit Analysis and Break-Even … 190
5.1 Cost-Volume-Profit Analysis and Break-Even Charts … 191
5.2 Contribution Margin and Contribution Rate . .. 206
5.3 Effects of Changes to Cost-Volume-Profit .. . 210
BUSINESS MATH NEWS … 214
R eview Exercise . . . 2 15
Self-Test . . . 216
Challenge Problems … 2 1 7
Case Study Segway Tours . . . 2 1 7
Summary of Formulas . .. 218
Glossary … 2 19
6 Trade Discounts, Cash Discounts, Markup, and Markdown … 220
6.1 Determining Cost with Trade Discounts … 222
6.2 Payment Terms and Cash Discounts .. . 230
6.3 Markup .. . 238
6.4 Markdown . .. 246
6.5 Integrated Problems … 252
BUSINESS MATH NEWS … 259
Review Exercise … 260
Self-Test . .. 262
Challenge Problems . .. 263
Case Study Focusing on Prices . . . 263
Summary of Formulas … 264
Glossary .. . 265
7 Simple Interest … 267
7 .1 Calculating the Amount of Simple Interest .. . 268
7.2 Calculating the Principal, Rate, or Time . . . 274
7.3 Computing Future Value (Maturity Value) . . . 279
7.4 Calculating the Principal (Present Value) … 283
7.5 Computing Equivalent Values . . . 285
BUSINESS MATH NEWS … 294
R eview Exercise … 297
Self-Test . . . 298
Challenge Problems . . . 298
Case Study Cost of Financing: Pay Now or Pay Later … 299
Summary of Formulas … 300
Glossary .. . 300
8 Simple Interest Applications … 301
8.1 Promissory Notes … 302
8.2 Treasury Bills and Commercial Paper .. . 309
8.3 Demand Loans … 312
8.4 Lines of Credit and Simple Interest Loans … 315
8.5 Loan Repayment Schedules … 319
BUSINESS MATH NEWS … 324
Review Exercise … 325
Self-Test . . . 326
Challenge Problems .. . 327
Case Study Debt Consolidation . .. 327
Swmnary of Formulas .. . 328
Glossary … 329
Part 2 Comprehensive Case . . . 330
Part • Mathematics of Finance and Investment … 333
9 Compound Interest-Future Value and Present Value . .. 336
9.1 Basic Concepts and Calculations … 337
9.2 Using the Future Value Formula of a Compound Amount
FV = PV ( 1 + i) II ••• 344
9.3 Present Value and Compound Discount … 356
9.4 Application-Discounting Negotiable Financial Instruments
at Compound Interest . . . 362
BUSINESS MATH NEWS … 368
9.5 Equivalent Values .. . 369
Review Exercise … 384
Self-Test … 385
Challenge Problems … 386
Case Study Planning Ahead … 387
Sununary of Formulas … 388
Glossary .. . 388
10 Compound Interest-Further Topics … 389
10.1 Determining n and Related Problems . . . 390
10.2 Calculating i and Related Problems … 398
10.3 Effective and Equivalent Interest Rates . . . 402
BUSINESS MATH NEWS … 412
Review Exercise … 413
Self-Test … 414
Challenge Problems … 414
Case Study Comparing Car Loans … 415
Summary of Formulas … 415
Glossary … 4 16
11 Ordinary Simple Annuities … 417
11.1 Introduction to Annuities … 418
11.2 Ordinary Simple Annuity-Calculating Future Value FV .. . 421
11.3 Ordinary Simple Annuity-Calculating Present Value PV .. . 431
CONTENTS IX
11.4 Ordinary Simple Annuities-Determining the Periodic Payment PMT .. . 442
11.5 Determining the Term n of an Annuity . .. 448
BUSINESS MATH NEWS … 454
11.6 Calculating the Periodic Rate oflnterest i Using Preprogrammed Financial
Calculators .. . 455
Review Exercise … 457
Self-Test .. . 458
Challenge Problems . .. 458
Case Study Getting the Picture … 459
Sununary of Formulas … 460
Glossary … 461
12 Ordinary General Annuities … 462
12.1 Ordinary General Annuities-Calculating the Future Value FV . .. 463
12.2 Ordinary General Annuities-Calculating the Present Value PV . . . 471
12.3 Ordinary General Annuities-Determining the Periodic Payment PMT . .. 473
12.4 Ordinary General Annuities-Determining the Term n … 476
12.5 Ordinary General Annuities-Calculating the Periodic Interest Rate i … 480
BUSINESS MATH NEWS … 480
12.6 Constant-Growth Annuities … 482
Review Exercise .. . 488
Self-Test . .. 489
Challenge Problems . .. 490
Case Study Vehicle Cash-Back Incentives … 490
Summary of Formulas . .. 491
Glossary . . . 492
13 Annuities Due, Deferred Annuities, and Perpetuit ies … 493
13.1 Simple Annuities Due .. . 494
13.2 General Annuities Due .. . 508
BUSINESS MATH NEWS … 515
13.3 Ordinary Deferred Annuities … 516
13.4 Deferred Annuities Due .. . 525
13.5 Perpetuities .. . 533
Review Exercise … 541
Self-Test . . . 543
Challenge Problems … 545
Case Study Planning for University … 54 5
Summary of Formulas … 546
Glossary . . . 54 7
14 Amortization of Loans, Including Residential Mortgages … 548
14.1 Amortization Involving Simple Annuities … 549
14.2 Amortization Involving General Annuities . .. 569
14.3 Determining the Size of the Final Payment . .. 576
14.4 R esidential Mortgages in Canada . . . 584
BUSINESS MATH NEWS … 591
R eview Exercise … 596
Self-Test … 598
Challenge Problems .. . 599
Case Study Managing a Mortgage .. . 599
Summary of Formulas . . . 600
Glossary … 600
15 Bond Valuation and Sinking Funds … 602
15.1 Purchase Price of Bonds .. . 603
15.2 Purchase Price of a Bond When Market R ate Does Not
Equal Bond R ate … 604
BUSINESS MATH NEWS … 620
15.3 Bond Schedules … 621
15.4 Determining the Yield R ate … 627
15.5 Sinking Funds . .. 629
R eview Exercise … 643
Self-Test .. . 646
Challenge Problems … 64 7
Case Study R aising Capital Through Bonds . . . 64 7
Summary of Formulas … 648
Glossary .. . 649
16 Investment Decision Applications … 650
16.1 Discounted Cash Flow … 651
16.2 Net Present Value . .. 659
BUSINESS MATH NEWS … 670
16.3 R ate of Return on Investment .. . 671
R eview Exercise … 683
Self-Test .. . 684
Challenge Problems … 685
Case Study To Lease or Not to Lease? … 686
Sununary of Formulas .. . 686
Glossary … 687
Part 3 Comprehensive Case … 688
Appendix I:
Appendix II:
Further R eview of Basic Algebra . . . 691
Instructions and Tips for Three Preprogrammed
Financial Calculator Models . .. 704
Answers to Odd-Numbered Problems, R eview Exercises, and Self-Tests .. . 717
Index .. . 734