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
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.
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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