Page 6 - Mathematics of Business and Finance

vi Contents

Chapter 4

Ratios, Proportions, and Applications 142
Introduction ...............................................................................................................143
4.1 Ratios ...........................................................................................................................143
Expressing a Ratio of Two Quantities .......................................................................143
Expressing a Ratio of More than Two Quantities ......................................................143
Equivalent Ratios ......................................................................................................144
Order of a Ratio ........................................................................................................147
Comparing Quantities of Items That Have the Same Kind
of Measure but Different Units ..................................................................................147
Rate, Unit Rate, and Unit Price .................................................................................148
Sharing Quantities Using Ratios ...............................................................................149
Exercises .................................................................................................................151

4.2 Proportions and Pro-rations ......................................................................................154
Proportions ...............................................................................................................154
Pro-rations ................................................................................................................157
Exercises .................................................................................................................158
4.3 Exchange Rates and Applications ............................................................................161
Exchange Rates ........................................................................................................161
Buying and Selling Currencies ..................................................................................164
Currency Appreciation and Depreciation ..................................................................167
Importing Goods from Another Country ...................................................................168
Exercises .................................................................................................................169

4.4 Index Numbers and Applications ..............................................................................172
Index Numbers .........................................................................................................172
Consumer Price Index (CPI) .....................................................................................174
Inflation Rate and Real Income .................................................................................176
Purchasing Power of a Dollar ...................................................................................177
Stock Index ...............................................................................................................178
Exercises .................................................................................................................178
Review Exercises ..........................................................................................................181
Self-Test Exercises ........................................................................................................183
Chapter 5

Mathematics of Merchandising 186

Introduction ...............................................................................................................187
5.1 Trade Discounts ..........................................................................................................188
Single Trade Discount ..............................................................................................188
Series of Trade Discounts .........................................................................................190
Single Equivalent Trade Discount Rate for a Series of Trade Discount Rates ..........193
Exercises .................................................................................................................195
5.2 Payment Terms and Cash Discounts ........................................................................199
Payment Terms .........................................................................................................201
Partial Payments .......................................................................................................203
Exercises .................................................................................................................205

5.3 Markup .........................................................................................................................208
Amount of Markup ....................................................................................................208
Rate of Markup .........................................................................................................209
Break-Even Price (BE)...............................................................................................214
Exercises .................................................................................................................216