This course will provide an understanding of time value of money and relevant business related mathematical concepts. Topics covered include simple and compound interest, annuities, sinking funds, mortgages, bonds, business investment decisions, linear and non linear cost-volume profit analysis.
- Pertinent algebra review: weighted average, exponents, logarithms, problem-solving logic.
- Graphing of linear functions: using the slope and y intercept as applied to a variety of business problems.
- Systems of linear equations: solving two equations for two variables and three equations for three variables. Use of Gauss-Jordan matrices.
- Cost-Volume-Profit analysis: linear and quadratic break-even by quantity, dollar amount, percent of capacity.
- Simple interest: time value of money, equivalent values, promissory notes, commercial papers, demand loans.
- Compound interest: present, future and equivalent values, continuous compounding, interest rate and number of conversion period calculations, equivalent and effective interest rates.
- Annuities: ordinary annuities, simple annuities, annuities due, complex annuities; loan amortization, mortgages, perpetuities, bonds and sinking funds; present and future values, payment, interest rate and number of conversion period calculations.
- Business investment decisions, including net present value of an investment, payback period calculations.
Methods Of Instruction
Material will be presented within a lecture format.
Means of Assessment
Minimum of 3 evaluations, none of which exceed 40%, for a total of 100%.
At the end of the course, the successful student should be able to:
- perform weighted average, exponential and logarithmic calculations and apply problem solving logic to business-related problems;
- demonstrate competence in the solving of financial problems involving the calculation of simple and compound interest and discount, annuities, mortgages, sinking funds, bonds and net present value;
- solve basic problems involving systems of linear equations and determine break even and equilibrium positions in business;
Textbooks and Materials to be Purchased by Students
- Jerome, Ernest F. Business Mathematics in Canada, latest ed. Toronto: Irwin Publishing.
- Financial business calculator.