Table Of ContentA01_HUMM2312_FM.pi-001.indd 2 27/11/13 9:55 PM
contemporary
business
mathematics
with canadian
applications
A01_HUMM2312_FM.pi-001.indd 1 27/11/13 9:55 PM
S. A. Hummelbrunner
kelly HAllidAy
k. SuzAnne coombS
contemporary
business
mathematics
with canadian
applications
10tH
edition
Toronto
A01_HUMM2312_FM.pi-001.indd 3 27/11/13 9:55 PM
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10 9 8 7 6 5 4 3 2 1 [CKV]
Library and Archives Canada Cataloguing in Publication
Hummelbrunner, S. A. (Siegfried August), author
Contemporary business mathematics with Canadian
applications
/ S.A. Hummelbrunner, Kelly Halliday,
K. Suzanne Coombs.—Tenth edition.
Includes index.
ISBN 978-0-13-305231-2 (bound)
1. Business mathematics—Textbooks. I. Halliday, Kelly, author
II. Coombs, Suzanne, author III. Title.
HF5691.H85 2014 650.01’513
C2013-904776-X
ISBN 978-0-13-305231-2
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1.2 fractions v
brief contentS
Preface … xi
Student’s Reference Guide to Rounding and Special Notations … xx
Part 1 Mathematics Fundamentals and Business Applications … 2
1 Review of Arithmetic … 4
2 Review of Basic Algebra … 38
3 Ratio, Proportion, and Percent … 84
4 Linear Systems … 133
Part 2 Mathematics of Business and Management … 169
5 Cost-Volume-Profit Analysis and Break-Even … 171
6 Trade Discounts, Cash Discounts, Markup, and Markdown … 201
7 Simple Interest … 246
8 Simple Interest Applications … 277
Part 3 Mathematics of Finance and Investment … 309
9 Compound Interest—Future Value and Present Value … 312
10 Compound Interest— Further Topics … 363
11 Ordinary Simple Annuities … 391
12 Ordinary General Annuities … 432
13 Annuities Due, Deferred Annuities, and Perpetuities … 463
14 Amortization of Loans, Including Residential Mortgages … 517
15 Bond Valuation and Sinking Funds … 569
16 Investment Decision Applications … 613
Appendix I: Further Review of Basic Algebra … 648
Appendix II: I nstructions and Tips for Three Preprogrammed Financia
Calculator Models … 668
Answers to Odd-Numbered Problems, Review Exercises,
and Self-Tests … 685
Index … 699
A01_HUMM2312_FM.pi-001.indd 5 27/11/13 9:55 PM
contentS
Preface … xi
Student’s Reference Guide to Rounding and Special Notations … xx
Part 1 Mathematics Fundamentals and Business Applications … 2
1 Review of Arithmetic … 4
1.1 Basics of Arithmetic … 5
1.2 Fractions … 6
1.3 Applications—Averages … 12
1.4 Applications—Payroll … 18
1.5 Applications—Taxes … 25
BUSINESS MATH NEw S BOX … 29
Review Exercise … 31
Self-Test … 33
Challenge Problems … 34
Case Study Businesses and the GST/HST … 34
Glossary … 36
2 Review of Basic Algebra … 38
2.1 Simplification of Algebraic Expressions …39
2.2 Integral Exponents … 45
2.3 Fractional Exponents … 52
2.4 Logarithms—Basic Aspects … 56
BUSINESS MATH NEwS BOX … 62
2.5 Solving Basic Equations … 63
2.6 Solving Equations Involving Algebraic Simplification …67
2.7 Solving word Problems … 72
Review Exercise … 77
Self-Test … 78
Challenge Problems … 80
Case Study Investing in a Tax-Free Savings Account … 80
Summary of Formulas … 81
Glossary … 82
3 Ratio, Proportion, and Percent … 84
3.1 Ratios … 85
3.2 Proportions … 90
3.3 Percent … 95
3.4 The Basic Percentage Problem … 99
3.5 Problems Involving Increase or Decrease … 106
3.6 Problems Involving Percent … 111
BUSINESS MATH NEwS BOX … 115
3.7 Applications—Currency Conversions … 117
3.8 Applications—Index Numbers … 121
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contEnts vii
3.9 Applications—Personal Income Taxes … 124
Review Exercise … 127
Self-Test … 129
Challenge Problems … 130
Case Study The Business of Taxes … 131
Summary of Formulas … 132
Glossary … 132
4 Linear Systems … 133
4.1 Algebraic Solution of Systems of Linear Equations in Two Variables … 134
4.2 Graphing Linear Equations … 139
4.3 Graphing Linear Systems of Equations in Two Unknowns … 152
BUSINESS MATH NEw S BOX … 155
4.4 Problem Solving … 156
Review Exercise … 161
Self-Test … 162
Challenge Problems … 162
Case Study Finding the Right Combination … 163
Summary of Formulas … 163
Glossary … 164
Part 1 Comprehensive Case … 165
Part 2 Mathematics of Business and Management … 169
5 Cost-Volume-Profit Analysis and Break-Even … 171
5.1 Cost-Volume-Profit Analysis and Break-Even Charts … 172
5.2 Contribution Margin and Contribution Rate … 187
5.3 Effects of Changes to Cost-Volume-Profit … 191
BUSINESS MATH NEw S BOX … 194
Review Exercise … 196
Self-Test … 197
Challenge Problems … 198
Case Study Segway Tours … 198
Summary of Formulas … 199
Glossary … 200
6 Trade Discounts, Cash Discounts, Markup, and Markdown … 201
6.1 Determining Cost with Trade Discounts … 203
6.2 Payment Terms and Cash Discounts … 211
6.3 Markup … 219
6.4 Markdown … 227
6.5 Integrated Problems … 232
BUSINESS MATH NEwS BOX … 239
Review Exercise … 240
Self-Test … 242
Challenge Problems … 243
Case Study Focusing on Prices … 243
Summary of Formulas … 244
Glossary … 245
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viii contEnts
7 Simple Interest … 246
7.1 Finding the Amount of Simple Interest … 247
7.2 Finding the Principal, Rate, or Time … 251
7.3 Computing Future Value (Maturity Value)… 256
7.4 Finding the Principal (Present Value) … 258
BUSINESS MATH NEwS BOX … 261
7.5 Computing Equivalent Values … 261
Review Exercise … 273
Self-Test … 274
Challenge Problems … 274
Case Study Cost of Financing Pay Now or Pay Later … 275
Summary of Formulas … 276
Glossary … 276
8 Simple Interest Applications … 277
8.1 Promissory Notes … 278
8.2 Treasury Bills—Present Value … 285
8.3 Demand Loans … 287
8.4 Lines of Credit and Credit Card Loans … 291
8.5 Loan Repayment Schedules … 296
BUSINESS MATH NEwS BOX … 300
Review Exercise … 301
Self-Test … 302
Challenge Problems … 303
Case Study Debt Consolidation … 303
Summary of Formulas … 304
Glossary … 305
Part 2 Comprehensive Case … 306
Part 3 Mathematics of Finance and Investment … 309
9 Compound Interest—Future Value and Present Value … 312
9.1 Basic Concepts and Calculations … 313
9.2 Using the Future Value Formula of a Compound Amount
FV = PV (1 + i)n … 319
9.3 Present Value and Compound Discount … 331
9.4 Application—Discounting Negotiable Financial Instruments
at Compound Interest … 336
BUSINESS MATH NEwS BOX … 342
9.5 Equivalent Values … 343
Review Exercise … 358
Self-Test … 359
Challenge Problems … 360
Case Study Planning Ahead … 361
Summary of Formulas … 362
Glossary … 362
10 Compound Interest—Further Topics … 363
10.1 Finding n and Related Problems … 364
10.2 Finding i and Related Problems … 372
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contEnts ix
10.3 Effective and Equivalent Interest Rates … 377
BUSINESS MATH NEwS BOX … 385
Review Exercise … 387
Self-Test … 388
Challenge Problems … 388
Case Study Comparing Car Loans … 389
Summary of Formulas … 389
Glossary … 390
11 Ordinary Simple Annuities … 391
11.1 Introduction to Annuities … 392
11.2 Ordinary Simple Annuity—Finding Future Value FV … 394
11.3 Ordinary Simple Annuity—Finding Present Value PV … 404
BUSINESS MATH NEwS BOX … 413
11.4 Ordinary Simple Annuities—Finding the Periodic Payment PMT … 414
11.5 Finding the Term n of an Annuity … 420
11.6 Finding the Periodic Rate of Interest i Using Preprogrammed Financial
Calculators … 425
Review Exercise … 427
Self-Test … 428
Challenge Problem … 428
Case Study Getting the Picture … 429
Summary of Formulas … 430
Glossary … 430
12 Ordinary General Annuities … 432
12.1 Ordinary General Annuities—Finding the Future Value FV … 433
12.2 Ordinary General Annuities—Finding the Present Value PV … 441
12.3 Ordinary General Annuities—Finding the Periodic Payment PMT … 444
12.4 Ordinary General Annuities—Finding the Term n… 447
12.5 Ordinary General Annuities—Finding the Periodic Interest Rate i … 450
BUSINESS MATH NEwS BOX … 451
12.6 Constant-Growth Annuities … 453
Review Exercise … 458
Self-Test … 459
Challenge Problem … 460
Case Study Vehicle Cash-Back Incentives … 460
Summary of Formulas … 461
Glossary … 462
13 Annuities Due, Deferred Annuities, and Perpetuities … 463
13.1 Simple Annuities Due … 464
13.2 General Annuities Due … 477
BUSINESS MATH NEwS BOX … 484
13.3 Ordinary Deferred Annuities … 485
13.4 Deferred Annuities Due … 494
13.5 Perpetuities … 502
Review Exercise … 510
Self-Test … 512
Challenge Problems … 513
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x contEnts
Case Study Planning for University … 514
Summary of Formulas … 515
Glossary … 516
14 Amortization of Loans, Including Residential Mortgages … 517
14.1 Amortization Involving Simple Annuities … 518
14.2 Amortization Involving General Annuities … 538
14.3 Finding the Size of the Final Payment … 544
14.4 Residential Mortgages in Canada … 552
BUSINESS MATH NEwS BOX … 559
Review Exercise … 564
Self-Test … 566
Challenge Problems … 567
Case Study Managing a Mortgage … 567
Summary of Formulas … 568
Glossary … 568
15 Bond Valuation and Sinking Funds … 569
15.1 Purchase Price of Bonds … 570
15.2 Purchase Price of a Bond when Market Rate Does not Equal Bond Rate … 571
BUSINESS MATH NEwS BOX … 584
15.3 Bond Schedules … 585
15.4 Finding the Yield Rate … 590
15.5 Sinking Funds … 593
Review Exercise … 607
Self-Test … 609
Challenge Problems … 610
Case Study Raising Capital Though Bonds … 610
Summary of Formulas … 611
Glossary … 612
16 Investment Decision Applications … 613
16.1 Discounted Cash Flow … 614
16.2 Net Present Value … 621
BUSINESS MATH NEwS BOX … 631
16.3 Rate of Return on Investment … 632
Review Exercise … 644
Self-Test … 645
Challenge Problems … 646
Case Study To Lease or Not to Lease? … 646
Summary of Formulas … 647
Glossary … 647
Part 3 Comprehensive Case … 649
Appendix I: Further Review of Basic Algebra … 652
Appendix II: Instructions and Tips for Three Preprogrammed Financial Calculator Models …672
Answers to Odd-Numbered Problems, Review Exercises, and Self-Tests … 685
Index … 699
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