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• Commercial Maths

• Links

Why Study Maths?

Like it or not, maths is used in most aspects of daily life.

Math is an integral part of life. It has a definite role to

play in every body's life.

men and educated people.

Lay men or service men use

math to add, subtract,

multiply or divide.

price of the purchases.

When he has to give back

some money, he subtracts.

When we buy more than a kilogram of tomatoes, say

2kgs of tomatoes, he uses multiplication table. When we

want half a kilogram of tomatoes, he divides the price of

1 kilogram by 2.

Doctors calculate the month of pregnancy to give the

right medicine to the expectant mothers. The growth of

the child in the womb is measured. After birth, the

injections and polio drops are to be given at the right

time in the right doses all of which involves math

calculation.

agriculture. Every nation has to feed its growing

population. The population of the world grows in

exponential terms but the agricultural land is the same.

Hence the math calculation involves such terms as how

to get more yield quality wise from the same land to

feed the growing population.

computer consultants, airline pilots, company directors

and a host of others require a solid understanding of

basic maths, and in some cases require a quite detailed

knowledge of maths.

games as a job, but don't bother to do well at maths,

you'll end up receiving lots of "Unfortunately you have

been unsuccessful……" letters.

be unrelated to maths, it is full of mathematical

techniques such as effects of translation, rotation,

symmetry, coordinate geometry, vectors, angles,

bearings etc.

know maths?" you may ask. Business is all about selling

a product or service to make money. All transactions

within a business have to be recorded in the Company

accounts and quite often involve very large sums of

money. So for example, you need to be able to estimate

the effect of changing numbers in the accounts when

trying to work out your expected performance for next

year. Also businesses rely heavily on using percentages,

in particular anyone who works as a sales person will

need to be quick at mental arithmetic, approximation

and in working out percentages. The more percentage

discount you give a customer when you sell them a

product, the less profit your company will make (and

quite often the less you will be paid!) so it really does

pay to know your maths.

This project highlights the uses,

need and benefits of business math

from the perspective of a general

business activity. It begins with

more simple money math including

decimals, place value, addition,

subtraction, and percentages. It

continues with earning money,

income and wages, taxes, checking

accounts, bank savings accounts,

investments, and more consumer

math skills.

What is Business Mathematics?

enterprises to record and manage business operations.

Commercial organizations use mathematics in accounting,

inventory management, marketing, sales forecasting, and

financial analysis. Mathematics typically used in commerce

includes elementary arithmetic, elementary algebra, statistics

and probability. Business management can be made more

effective in some cases by use of more advanced mathematics

such as calculus, matrix algebra and linear programming.

In academia, "Business

Mathematics" includes

mathematics courses taken

at an undergraduate level by

business students. These

courses are slightly less

difficult and do not always go

into the same depth as other

mathematics courses for

people majoring in

mathematics or science

fields. The two most common math courses taken in this form

are Business Calculus and Business Statistics.

mathematics course and a regular mathematics course would

be calculus. In a regular calculus course, students would study

trigonometric functions. Business calculus would not study

trigonometric functions because it would be time-consuming

and useless to most business students, except perhaps

economics majors. Economics majors who plan to continue

economics in graduate school are strongly encouraged to take

regular calculus instead of business calculus, as well as linear

algebra and other advanced math courses, especially real

analysis.

Commercial Maths

Another meaning of business mathematics, sometimes called

commercial math or consumer math, is a group of practical

subjects used in commerce and everyday life. In schools, these

subjects are often taught to students who are not planning a

university education. In the United States, they are typically

offered in high schools and in schools that grant associate's

degrees.

include a review of elementary

arithmetic, including fractions,

decimals, and percentages.

Elementary algebra is often included

as well, in the context of solving

practical business problems. The

practical applications typically

include checking accounts, price

discounts, markups and markdowns,

payroll calculations, simple and

compound interest, consumer and

business credit, and mortgages.

application, with practical application being predominant. For

instance, while computational formulas are covered in the

material on interest and mortgages, the use of prepared tables

based on those formulas is also presented and emphasized.

The Mathematics of Business

situations where you have to calculate payments,

incomes, wages, interest etc. To deal with such day to

day needs of your business you need maths.

debt to nil is something we all must do in our lifetime as we

make purchases that would only be feasible if we are given

sufficient time to pay down the amount of the transaction. This

is referred to as 'amortizing' a debt. Here is an example to

explain Simple Debt Amortization.

concept are:

1. Principal - the initial amount of the debt, usually the price of

the item purchased.

2. Interest Rate - the amount one will pay for the use of

someone else's money. Usually expressed as a percentage so

that this amount can be expressed for any period of time.

3. Time- essentially the amount of time that will be taken to

pay down (eliminate) the debt. Usually expressed in years, but

best understood as the number of and interval of payments, i.e.,

36 monthly payments.

I= PRT, where

I=Interest

P=Principal

R= Interest Rate

T= Time.

The challenge: John decides to buy a car for his business. The

dealer gives him a price and tells him he can pay on time as

long as he makes 36 installments and agrees to pay six per cent

interest (6%). The facts are:

Agreed price 18,000 for the car, taxes included.

The first payment will occur 30 days after receiving the loan.

A simple timeline will give you an idea of the question we need

to address.

principal so we can pay off the original debt.

that is equal to 1/36 of the total interest.

amounts at a fixed interest rate.

This picture shows the calculation of interest for each month,

reflecting the declining balance outstanding due to the principal

pay down each month . ( 1/36 of the balance outstanding at the

time of the first payment.,., in our example 18,090/36 = 502.50)

By totaling the amount of interest and calculating the average,

you can arrive at a simple estimation of the payment required

to amortize this debt. Averaging will differ from exact because

you are paying less than the actual calculated amount of

interest for the early payments, which would change the

amount of the outstanding balance and therefore the amount of

interest calculated for the next period.

terms of a given time period and realizing that amortization is

nothing more than a progressive summary of a series of simple

monthly debt calculations should provide a person with a better

understanding of loans and mortgages. The math is both simple

and complex; calculating the periodic interest is simple but

finding the exact periodic payment to amortize the debt is

complex.

Role of Maths in Business Decisions

important in the process of managerial decision models

and algorithms. Mathematics can provide powerful

support for business decisions. In their later business

careers, this will motivate them to consult with

mathematicians and employ effective quantitative

methods.

decision making process, it is possible to recognize three

distinct phases in every decision situation. First is

carefully defined the problem. Second is a conceptual

model to be generated and third is the selection of the

appropriate quantitative model that may lead to a

solution.

the orderly delineated sequences of mathematical

operations that lead to a solution. The algorithms

generate the decision which is subsequently

implemented managerial action program.

Where to Use Maths in Business?

methods. Also their needs and requirements are different.

Taking in view a general business activity, the businessman or

entrepreneur will have to make use of maths in the following

fields-

making purchase or sale of goods and

services, a businessman will have to make

certain additions, subtractions,

multiplications, divisions, percents and

percentages, fractions, decimals,

estimations and rounding offs.

calculated keeping in mind various factors

including performance, efficiency, results

attained, working hours etc. They again

entail an individual to make use of maths.

Maths helps in understanding earnings

statements, time card sheets, income, health insurance,

deductions and other aspects related to earning and

making money.

both the businessman as well as the service

employee. Knowing what tax is not enough,

one must also learn how to calculate the

same. This can be learned with the help of maths

through its basic tax calculating techniques.

hand to your business by teaching you

techniques and ways of operating and

managing its checking accounts. With the

help of maths you can learn to write a check,

make checking account deposits and

withdrawals, manage and balance your checkbook and

checkbook reconciliation.

easily attain a basic understanding of

banking and interest rate as it is a

fundamental money skill.

also guides an individual about discounts,

needs and wants, receipts, tipping,

estimation, comparison shopping, invoices

and lots more so as to run his business

effectively and efficiently.

7. Investing- this section of business deals with

investing money and money management.

Through maths one can learn basic investing

and financial concepts including stocks, the

stock market, interest, income statements,

buying stocks, calculating shares purchased,

percentage change in share price, how to read a stock

table and security pricing.

budgeting lessons that teach real life basic

budget concepts.

internationally then you must learn the

mathematical lesson to convert one currency

into another. This conversion method is also

called foreign exchange rate.

statement is a basic worksheet of a businesses'

profitability. Every business must maintain the

same. Again maths plays a basic role in creating

and maintaining a P&L statement.

11. Business Decisions- last but not the least,

maths (basic algebra) proves to be highly

useful in making financial or monetary

decisions in a business.

References

• http://www.moneyinstructor.com/business.asp

• http://www.scribd.com/doc/12243159/Role-of-Mathematics-in-Business

• http://en.wikipedia.org/wiki/Business_mathematics

• http://www.businessweek.com/magazine/content/06_07/c3971027.

htm

• http://wiki.answers.com/Q/Role_of_mathematics_in_Business_decisi

ons

• http://mathforum.org/dr/math/faq/faq.why.math.html

• http://math.about.com/od/businessmath/tp/businessmathtp.htm

• http://www.easymaths.com/What_use_is_Maths.htm

• http://answers.yahoo.com/question/index?

qid=20081114200720AA1d51T

• http://answers.yahoo.com/question/index?

qid=20080127161257AAokehW

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