Introduction
Objective
This Business Mathematics courses aim to have students understand basic business problems, interpret them in mathematical terms, and use the tools of mathematics to solve these problems. The objective of this material is to provide mathematical theory, demonstration and practice for first-year Business students.
A grade of C+ or better in Algebra 11 (or equivalent) is the prerequisite for this course; students requiring extensive review or remedial work are expected to have completed a preparatory course such as OPMT 0199, which is offered through part-time studies at BCIT.
These notes explain the applications of basic mathematics to business and industry using ratios, functions and graphs, simple and compound interest, financial instruments and discounting, annuities, mortgages, loans, and leases. Cash-flow analysis applying rates of return, net present value, and payback is included.
We expect students to read the material carefully and follow the worked examples. You should also work through the learning activities in each chapter and check the recommended solutions. Practice problem sets with selected answers are included at the end of each chapter. You are expected to have a pre-programmed business/financial calculator; the Texas Instruments BA II Plus is recommended, and will be used in solving problems.
Calculator Instructions
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The recommended calculator for this course is the Texas Instruments BAII Plus. You may purchase another calculator as long as that calculator has per-programmed financial functions. Your calculator should be able to perform Net Present Value (NPV) and Internal Rate of Return (IRR) cash flow analysis. Please talk to the instructor before purchasing any calculator other than the BAII plus. |
Formatting a BAII Plus:
| Step | To | Press | Display |
| 1 | Select FORMAT function | [2ND] [./FORMAT] | DEC= 2.00 |
| 2 | Change the number of decimals to 9
(with 9 decimals it hides the zeros after the decimal point) |
[9][ENTER] | DEC= 9 |
| 3 | Change calculator to BEDMAS (AOS)
(gives correct order of operations) Scroll to where it says AOS or Chn ** You want AOS Check by entering: $3+2\times 5$ You should get 13 (not 25) |
[↓]
[↓] [↓] [↓] [2ND][ENTER/SET] |
DEG
US-12-31-1990 US 1,000 Chn Skip step if it shows AOS AOS |
| 4 | To get out of the FORMAT function | [2ND][CPT/QUIT] | 0 |
Or if you are a visual learner, here’s a handy video, courtesy of former BCIT instructor Chris Kellman: Setting up your BAII Plus
Another option:
Memory Operations with the BAII Plus
Compute: [latex]\frac{525+287+309}{\left(\frac{0.4}{0.6}\right)}[/latex]
| Step | To | Press | Display |
| 1 | Sum $525 + 287 + 309$ | [5][2][5][+][2][8][7][+][3][0][9][=] | 1,121 |
| 2 | Store the value in Memory 1 | [STO][1] | |
| 3 | 0.4 divided by 0.6 | [.][4][÷][.][6][=] | 0.666666667 |
| 2 | Store the value in Memory 2 | [STO][2] | |
| 5 | Memory 1 divided by Memory 2 | [RCL][1][÷][RCL][2][=] | 1681.5 |
The sum of all Inflows, minus all Outflows, adjusted for time.
The rate for which the NPV = 0
