Business Math: Using Percents
Steven J. Wilson
Professor of Mathematics
Johnson County Community College
Published by: Kendall/Hunt
Publishing Company, 2001
2nd edition, 2006.
ISBN: 0-7575-2605-5
Jump to: Preface, Acknowledgements, Table of Contents
Preface
The second edition of Business Math: Using Percents is designed for a one-semester post-arithmetic college level course in Business Mathematics. Major features of the text include:
This course emphasizes the use of percentages in business. After an introduction to percents, topics include payroll, retailing, the value of assets, simple and compound interest, and annuities.
This textbook assumes that a student is proficient in the operations of elementary arithmetic (fractions and decimals). Chapter 1 is provided as a review of some of those operations needed in this course. Algebra is neither required as a prerequisite, nor are algebraic concepts taught in this text. Non-algebraic methods are used throughout. This text is not designed to be an applied pre-algebra course.
Upon completion of a Business Mathematics course using this textbook, the student should be able to:
This text endeavors to present business mathematics as an application of a very few mathematical topics, used in many different situations. Most business mathematics topics are applications of percents. Basic techniques in the use of percentages are presented in chapter 2. Business math topics presented in the later chapters will use these basic techniques. We encourage students to recognize the similarities in the different business math topics, rather than offering a plethora of recipes for many different contexts. Therefore, only a minimal number of broadly applicable formulas are used throughout.
Changes in the second edition are numerous. The few errors that did occur in the first edition have been corrected. Tax rates and information (sections 3.3-3.5) are now more current. Default payment terms (section 4.3) receive greater attention. Shrinkage (section 4.5) is now introduced using the percent change diagram, rather than a specialized shrinkage diagram. Neither the Sum-of-the-Years'-Digits depreciation method (section 5.3), nor the Rule of 78 (section 6.6) are currently used by financial professionals, and have been deleted. Explanations for partial-year conventions (section 5.4) have been expanded. The withdrawal of funds from savings (section 8.2) is now addressed. The table of Typical Financial Ratios (appendix) has been updated. And in almost every section of the text, a general updating of prices and rates has been made.
Technology is prevalent in business settings, and it is our desire that students be able to use the available technology. For problems involving compound interest or annuities (chapters 7 and 8), we recommend the use of a financial calculator. Current prices begin at about $25 for the simplest models, which are completely adequate for this course. No particular brand or model of financial calculator is necessary. The focus of the text is on setting up the problems and identifying the variables, not on the keystrokes of the calculator. Basic differences between different brands and models of calculators are briefly described in the text, and more specific details are given in the web appendix.
It is possible to use this text without a financial calculator, though we do not recommend that approach. The variables still need to be identified if algebraic formulas or tables are used. We do provide the algebraic formulas in the appendix, but those who wish to use tables will have to obtain them from another source. Tables are very limiting, in that each interest rate requires a different table, so a set of tables can never be complete. Algebraic methods are certainly superior to tables, in that every problem can be turned into an algebraic equation. However, solving the algebraic equation for the interest rate presents obstacles which most students at this level find insurmountable. The financial calculator avoids these difficulties.
The exercises of each section are graded. One-star exercises provide routine practice of the basic mathematical computations needed. Two-star exercises generally provide routine applications of business math. Three-star exercises may combine multiple ideas, be at a more difficult level, require a fair amount of time to complete, or ask the student to discuss the implications of various situations. We believe every business math student should become proficient in solving two-star problems.
One of the most annoying features of any business mathematics book is the speed at which business math material becomes dated. To partially alleviate this problem, we have made available a World Wide Web appendix, where current payroll tax information can be found. We have also provided some information about specific financial calculators on this web site. Point your browser to http://staff.jccc.net/swilson/businessmath/.
Acknowledgments
The author has taught business math at Johnson County Community College for many years, and has long felt the need for a textbook in line with the goals of the course as taught at JCCC. Encouraged by other colleagues in the same situation, he availed himself of a sabbatical opportunity offered by the college to write such a textbook. The author would like to express his sincere appreciation to the Board of Trustees of JCCC for granting sabbatical leave during the spring of 1999 which made this textbook possible. Special thanks for their comments and suggestions also go to Jeff Frost and Libby Holmgren, my colleagues in the JCCC mathematics department, and to the students from spring 2000, fall 2000, and spring 2001, who tested the preliminary edition. Additional thanks are due to colleagues and students too numerous to mention for their comments, corrections, and suggestions over the past four years. Their input has helped make the second edition a substantial improvement over the first.
Table of Contents
Index