Master Math: Business and Personal Finance Math - Ballina

1 Master math : Business andPersonal FinanceMathMary HansenAustralia Brazil Japan Korea Mexico Singapore Spain United Kingdom United StatesCourse Technology PTRA part of Cengage Learning 2012 Course Technology, a part of Cengage Learning. ALL RIGHTS RESERVED. No part of this work covered by thecopyright herein may be reproduced, transmitted, stored, or usedin any form or by any means graphic, electronic, or mechanical,including but not limited to photocopying, recording, scanning,digitizing, taping, Web distribution, information networks, orinformation storage and retrieval systems, except as permittedunder Section 107 or 108 of the 1976 United States Copyright Act,without the prior written permission of the math : Business and Personal Finance MathMary HansenPublisher and General Manager,Course Technology PTR: Stacy L. HiquetAssociate Director of Marketing:Sarah PanellaManager of Editorial Services:Heather TalbotMarketing Manager:Jordan CastellaniSenior Acquisitions Editor: Emi SmithProject Editor and Copy Editor:Kim BenbowTechnical Reviewer: David LawrenceInterior Layout Tech: Judy LittlefieldCover Designer: Mike TanamachiIndexer: Larry SweazyProofreader: Sue BoshersPrinted in the United States of America1 2 3 4 5 6 7 13 12 11 For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, permission to use material from this text or product, submit all requests online at permissions questions can be emailed to trademarks are the property of their respective images Cengage Learning unless otherwise of Congress Control Number: 2011922401 ISBN-13: 978-1-4354-5788-1 ISBN-10.

2 1-4354-5788-9 Course Technology, a part of Cengage Learning20 Channel Center StreetBoston, MA 02210 USAC engage Learning is a leading provider of customized learning solutions with office locations around the globe,including Singapore, the United Kingdom, Australia, Mexico, Brazil, and Japan. Locate your local office at: Learning products are represented in Canada byNelson Education, Ltd. For your lifelong learning solutions, visit our corporate website at by RR Donnelley. Crawfordsville, IN. 1st Ptg. 04/2011eISBN-10: 1-4354-5789-7To my children It is my prayer that you will always embrace learning and cultivate a love of to the Reader:Publisher does not warrant or guarantee any of the products described herein or performany independent analysis in connection with any of the product information containedherein. Publisher does not assume, and expressly disclaims, any obligation to obtain and include information other than that provided to it by the manufacturer.

3 The reader is expressly warned to consider and adopt all safety precautions that might be indicated by the activities described herein and to avoid all potential hazards. By following theinstructions contained herein, the reader willingly assumes all risks in connection withsuch instructions. The reader is notified that this text is an educational tool, not a practicebook. Since the law is in constant change, no rule or statement of law in this book shouldbe relied upon for any service to any client. The reader should always refer to standardlegal sources for the current rule or law. If legal advice or other expert assistance is required,the services of the appropriate professional should be sought. The publisher makes norepresentations or warranties of any kind, including but not limited to, the warranties offitness for particular purpose or merchantability, nor are any such representations impliedwith respect to the material set forth herein, and the publisher takes no responsibility withrespect to such material.

4 The publisher shall not be liable for any special, consequential,or exemplary damages resulting, in whole or part, from the readers use of, or reliance upon, this is with great thankfulness that I reflect on the many people who havesupported and encouraged me both in mathematics and in this you, Mr. Mayer, for opening my eyes in junior high school to theusefulness of mathematics in solving real problems in the real world. I am grateful for my Dad and Mom for encouraging me, especially to you,Dad, for sharing with me your talent for math and reasoning. I am gratefulto my high school geometry teacher, Mrs. Benson, and my college advisorand mathematics professor, William Trench, who taught many of my math -ematics classes and also allowed me to work on his life s contribution tomathematics. Both challenged me to stretch myself and learn more. I never outgrew a childhood dream to be a teacher, and I am so thankfulthat in my teaching jobs I was encouraged by many to explore new waysto teach mathematics.

5 Specifically, I appreciate my college educationprofessor, David Molina; my mentor teacher, Laurie Bergner; and prin -cipals, Chula Boyle and Joanne Brookshire, who supported my dreamthat all students can learn am thankful for Eve Lewis and Enid Nagel from South-Western Publishing who believed in my writing and teaching abilities and choseme, an unpublished writer, to be on the authorship team of the South-Western Algebra, Geometry, and Algebra 2 series, beginning my journeyin the world of educational publishing. Thank you Emi Smith and KimBenbow for your work on this project and your patience as we sorted out various , I would be remiss if I did not thank my wonderful husband, whohas supported me and believed in me through all the years and differentprojects. You have been loving and patient. You have always encouragedme to do my best and take the next step. Thank you, my Hansenhas taught K-12 and post-secondary mathematics andspecial education in three states.

6 She has travelled the United States extensively, doing teacher workshops on effective teaching strategies and effective mathematics teaching with two different educational consulting firms. Hansen received a Master of Arts in teaching and abachelor s degree in mathematics from Trinity University in San Antonio,Texas. She is the author of Business Mathematics, 17th Editionand the co-author of South-Western Algebra 1: An Integrated Approach,South-Western Geometry: An Integrated Approach, and South-WesternAlgebra 2: An Integrated Approach(all from South-Western Publishing).About the AuthorTable of ContentsAcknowledgmentsvAbout the AuthorviIntroductionxiiiChapter 1: math Fractions2 Equivalent Fractions2 Adding and Subtracting Fractions5 Multiplying and Dividing Decimals10 Rounding10 Operations with Decimals11 Fractions and Percents16 Fractions, Decimals, and Percents16 Operations with Formulas20 Exponents21 Order of Operations21 Chapter 2: Gross Hourly Pay23 Overtime Commission27 Commission Based on Quota28 Graduated Commission30 Rate of Other Wage Plans32 Piece-Rate Pay32 Per Diem Pay32 Tip Average Pay34 Averages34 Average as a Goal 36 Chapter 3.

7 Net Deductions from Pay40 Federal Withholding40 Social Security and Medicare Tax41 Net Federal Income Taxes44 Adjusted Gross Income and Taxable Income44 Income Tax Due45 Amount Due or State and City Income Taxes47 Flat Income Taxes47 Progressive Income Employee Benefits and Expenses49 Total Job Benefits49 Net Job Take Home Pay51 Raises52 Pre-Tax Deductions54 Chapter 4: Savings Accounts57 Simple Interest58 Compound Interest59 Annual Percentage Money Market and CD Annuities68 Future Value of an Ordinary Annuity69 Present Value of an Ordinary Annuity70 Master math : Business and Personal Finance Checking Accounts72 Deposits72 Check Register74 Reconciliation75 Chapter 5: Credit Credit Card Finance Charges82 Previous Balance Method84 Adjusted Balance Method85 Average Daily Balance Cash Debt Management91 Minimum Credit Card Payments91 Assessing Debt95 Chapter 6: Promissory Notes97 Exact and Ordinary Interest Methods99 Daily Interest Installment Loans101 Merchant Installment Plans101 Bank Installment Annual Percentage Early Loan Repayments107 Chapter 7: Auto and Home Mortgages112 Qualifying for a Mortgage112 Down Payment and Closing Costs113 Monthly Payments and Property Property Insurance120 Making an Insurance Claim121 Table of Buying a Leasing a Auto Insurance130 Chapter 8.

8 Insurance and Life Insurance134 Life Insurance Cash Health Insurance137 Health Insurance Benefits and Disability Bonds141 Bond Interest142 Current Yield143 Cost of Buying and Selling Stocks146 Stock Dividends147 Cost Yield147 Selling Mutual Funds150 Mutual Fund Commission152 Profit or Retirement Investments154 Pension Income154 Required Minimum Distributions155 Chapter 9: Average Monthly Creating and Adjusting a Best Optional Personal Expenses168 Master math : Business and Personal Finance MathxChapter 10: Business Payroll Property and Office Costs178 Unit Cost of Office Manufacturing Costs180 Breakeven Depreciation Costs182 Declining Balance Method182 Sum-of-the-Years-Digits Method183 Modified Accelerated Cost Recovery System Method (MACRS) Shipping Travel Expenses189 Chapter 11: Sales Managing Invoices and Credit196 Cash Discounts198 Rate of Cash Trade Discounts201 Rate of Trade Discount202 Series Markup205 Markup Based on Cost205 Markup Based on Selling Markdown210 Table of ContentsxiChapter 12: Ordering Tracking Reordering Valuing Inventory217 First In, First Out218 Last In, First Out218 Weighted Carrying Inventory220 Chapter 13: Financial Statements and Income Statement223 Net Sales225 Cost of Goods Sold225 Gross Profit226 Operating Expenses and Net Balance Financial Ratios230 Profit Margin231 Merchandise Turnover Rate232 Current Ratio234 Debt-to-Equity Ratio235 Return on Equity235 Appendix237 Index281 Master math : Business and Personal Finance MathxiiMany believe that there are two kinds of people in this world those whocan do math and those who can t.

9 I respectfully disagree. While there arecertainly people who have a talent or a gift for mathematics, all people arecapable of learning and applying mathematics. In our society, avoiding mathematics is not only a difficult task, but a riskyone. Paychecks, taxes, a checking account, credit cards, and loans are aneveryday part of the Personal Finance and Business world. To choose tolearn nothing is to be at the mercy of others and our own uninformed most common question posed to a math teacher is, When am I evergoing to have to use this? You will not have to ask that question whenworking through this book because its content is required to understand,and make good decisions about, Personal Finance and Business . This isthe math you can t afford to miss out on!It has always been my goal as a teacher to make mathematics relevantand understandable to students. While I wish I could sit beside you asyou work through this content, I have done my best to explain the topicsin everyday language and to show shortcuts and tips that will help youunderstand the process and perform the mathematics more quickly math : Business and Personal Finance Mathis designed as areference and resource tool.

10 It might be used by a student taking a businessmath or Personal Finance course who wants another resource to supple-ment a textbook. It might be used to refresh skills that have gotten rustyor to learn new skills to assist a person in managing Personal finances orworking in the Business book begins with a review of basic math skills that will be encounteredthroughout the book; it then moves into topics that impact both personalfinance and Business , including Calculating paychecks and taxes. Maintaining bank accounts, investments, and insurance. Managing credit. Making major purchases. Creating and managing a budget. The remainder of the book focuses on topics that are specific to a Business ,such as Managing costs, sales, and marketing. Creating and analyzing Business statements. Depending on your needs, you may choose to first work through all of theChapter 1 math review to prepare for the skills utilized in the remainingchapters, or you may find that you only need to brush up on a few skillsfrom the first chapter.