MGMT 150 - Business Mathematics

This introductory course examines practical financial and mathematical problems encountered in the business community such as the mathematics of merchandising, break-even analysis and the time value of money. Other calculations include using the valuation principle to determine the pricing of T-bills, interest paid on GICs, pricing of annuities, mortgages, bonds, and preferred shares.

 

Credits: 3

 

Hours: 45 (Lecture Hours: 45)

 

Prerequisites:Business Management Post Degree Diploma students: None. 
All others: One of the following with a 'C' grade (60%) or higher: Pre-calculus 11, Principles of Mathematics 11, Foundations of Math 11, Math 040, Math 042, or equivalent.

 

Non-Course Prerequisites:
None

 

Co-Requisites:
None

 

Course Content:
- Basic mathematics and algebra. 
- Ratios and Proportions. 
- Markup, markdown, margin, cash and trade discounts. 
- Break-even analysis, profit-volume-contribution analysis. 
- Simple interest formulas I = Prt and S = P(1 +rt) and investments at simple interest
- Maturity value, time value of money, future value, present value.
- Equivalent value, equations of value, equivalent payment streams.
- Time diagram.
- Blended payment loans. 
- Accrued interest and principal balance owed on a loan.
- Nominal, effective and periodic rates of interest. 
- Unknown payments in a payment stream. 
- Solving for variables, S, P, i, n, and payment
- Introduction to annuities.
- Deferred annuities, annuities due, and perpetuities.
- Amortization schedules.
- Sinking fund schedules 
- Market value, yield rate, premium and discount of a bond.

 

Learning Outcomes:Upon the successful completion of this course the student should have: 
1. Increased knowledge and skill in the solution of practical financial and mathematical problems encountered in the business community. 
Performance indicators:
- Solve merchandising problems involving trade and cash discounts, markups, markdowns, and terms of payment.
- Apply the formulas I = Prt and S = P(1 +rt) to cases of loans and investments at simple interest.
- Define and calculate using algebraic formulas the following terms: maturity value, time value of money, equivalent value, future value, present value, equivalent payment streams and equations of value.
- Describe arrangements for the repayment of certain types of demand loans including blended payment loans. 
- Calculate the accrued interest and principal balance owed on a loan at any point. 
- Calculate an unknown payment in a payment stream so that the stream will be equivalent to another stream of known payments. 
- Solve for variables, S, P, i, n and payment 
Solve for Payment:
- Distinguish between various types of annuities. 
- Calculate the market value of an annuity or loan, size and duration of payments or interest rate. 
- Solve for present or future value, interest rate, payment size, deferral period for deferred annuities, annuities due, or perpetuities.
- Produce an amortization schedule including determining the principal balance, principal and interest components at any payment. 
- Prepare a sinking fund schedule.
- Determine the market value, yield rate, premium or discount of a bond. 
2. A base for mathematical topics used in other business courses such as accounting, finance, economics, management, and marketing.
Performance indicators: 
- Solve merchandising problems involving trade and cash discounts, markups, markdowns, and terms of payment.
- Construct a break even chart.
- Convert between nominal, effective and periodic rates of interest.
- Calculate the market value of an annuity or loan, size and duration of payments or interest rate.
- Produce an amortization schedule including determining the principal balance, principal and interest components at any payment. 
- Prepare a sinking fund schedule. 
- Determine the market value, yield rate, premium or discount of a bond.
3. Increased knowledge and skill in solving mathematical problems.
Performance indicators: 
- Present information about the size and timing of payments in a time diagram. 
- Convert problems into equations and solve word problems.

 

Grading System: Letters

 

Passing Grade: D (50%)

 

Textbooks:
Textbooks are subject to change.  Please contact the bookstore at your local campus for current book lists.