# Apply ratios, proportions and percents to solve a variety of business problems, as indicated by: setting up, manipulating and using ratios to solve allocation problems;

**QNM106 - Mathematics of Finance**

**Subject Description **

This one semester subject provides students with the fundamentals of mathematics for business and finance. Students will study topics relevant to both service organizations and merchandise operations.

**Learning Outcomes **

Upon successful completion of this subject the student will be able to:

LEARNING OUTCOME 1

- Apply ratios, proportions and percents to solve a variety of business problems, as indicated by:
- setting up, manipulating and using ratios to solve allocation problems;
- setting up, solving and using proportions to solve problems involving the equivalence of two ratios;
- finding percentages, computing rates percent, finding the base for a rate percent, and applying these skills to solve business problems;
- solving problems of increase and decrease including the finding of the rate of increase or decrease and the original quantity on which the increase or decrease is based.

- Determining gross earnings for employees remunerated by the payment of salaries, hourly wages, or commissions as indicated by:
- determining hourly rates;
- computing overtime pay;
- finding straight/graduated commissions;
- calculating gross pay per pay period

LEARNING OUTCOME 2

- Determine trade discounts, cash discounts, mark-up and mark-down, as indicated by:
- solving problems involving trade discounts, including discount series and equivalent single rates of discount;
- dealing with the three most commonly used methods of cash discount;
- solving problems involving margin based on either cost or selling price;
- solving pricing problems involving mark-up, mark-down and discounts.

LEARNING OUTCOME 3

- Use exchange rate calculations, as indicated by:
- converting currency amounts between two countries;
- using exchange rate calculations to determine cost of goods bought in foreign countries considering taxes and duties.

LEARNING OUTCOME 4

- Perform Cost-Volume-Profit Analysis using either the contribution margin or the algebraic approach to:
- calculate and explain the effect of a change in sales activity on variable costs and net income;
- compute the break-even point in sales units and dollars;
- compute sales in units and dollars to achieve a desired net income.

LEARNING OUTCOME 5

- Solve commercial problems involving simple interest, discounts, and partial payments, as indicated by:
- determining the exact time in days between two dates;
- computing the exact simple interest by means of the formula I = Prt;
- finding the principal, rate or time from the formula I= Prt;
- using the formula S = P(1 + rt) to find the maturity value when the principal, rate and time are given;
- using the formula P = S(1 + rt)
^{-1}to compute the principal (or present value) when the maturity value, rate and time are given; - using the above concepts to evaluate common investment products (e.g. GICs, Treasury Bills, Commercial Paper, etc.)

LEARNING OUTCOME 6

- Analyse problems involving the time value of money, compound interest and compound discount, using formulae or a financial calculator, as indicated by:
- compute future values, including problems involving changes in rate of interest and principal;
- compute the present value of future sums of money;
- discounting commercial paper;
- solving problems while computing periodic, nominal and effective rates of interest and determining the number of conversion periods.

LEARNING OUTCOME 7

- Analyse annuities and their applications to loans, investments, mortgages, and perpetuities, using formulae or a financial calculator, as indicated by:
- For ordinary and general annuities,
- computing the future value
- computing the present value
- computing the periodic payment
- computing the term

- For ordinary and general perpetuities,
- computing the present value
- computing the periodic payments

- For ordinary and general annuity due,
- appropriate applications

**Essential Employability Skills**

Execute mathematical operations accurately.

Apply a systematic approach to solve problems.

Use a variety of thinking skills to anticipate and solve problems.

Manage the use of time and other resources to complete projects.

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