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Business Math (Olivier)


Business math is the study of mathematics required by the field of business. Business professionals will work with taxes, gross earnings, product prices, and currency exchange; they will be offered loans, lines of credit, mortgages, leases, savings bonds, and other financial tools. This textbook covers all of these topics and how these financial tools can maximize their earnings and minimize their costs. It also discusses how to execute smart monetary decisions both personally and for their business.

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Business math is a type of mathematics course that is meant to teach people about money and provide them with the tools they need to make informed financial decisions. Business math not only teaches about the specifics of finances related to owning and operating a business but also offers helpful advice and information related to personal finance. These classes prepare any consumer to manage their finances responsibly and profitably by explaining everything they need to know about accounting, economics, marketing, financial analysis, and more. Business math will help to make the ins and outs of money and commerce make sense, even to the most math-averse individuals, using relevant and authentic applications.

Business math is not just for business owners, contrary to what its name might suggest. A number of different professionals utilize business math-related skills every day.

Bankers, accountants, and tax consultants all need to become well-acquainted with every aspect of corporate and personal finance in order to deliver appropriate advice and problem solve with customers. Real estate and property professionals also employ business mathematics often when calculating their commission, navigating the mortgage process, and managing taxes and fees upon closing a deal.

When it comes to professions that deal more with capital allocation, such as investment consulting and stockbroking, understanding investment growths and losses and making long-term financial predictions is a fundamental part of the daily job. Without business math, none of these jobs could function.

For those that do own a business, business math is even more important. Business math can help these individuals to be successful by providing them with a solid understanding of how to manage goods and services to make a profit. It teaches them how to juggle discounts, markups, overhead, profits, inventory management, payroll, revenue, and all of the other complexities of running a business so that their career and finances can flourish.


Intermediate Algebra

By: Lynn Marecek

Intermediate Algebra expands on the fundamental concepts of algebra while addressing the needs of students with diverse backgrounds and learning styles. Each topic builds upon previously developed material to demonstrate the cohesiveness and structure of mathematics.

Intermediate Algebra is licensed under a Creative Commons Attribution (CC BY) 4.0 International License.


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WHY TEST?

Organizations can greatly profit from hiring employees capable of analyzing numerical data, solving mathematical equations, and making calculations to perform a wide range of functions, from determining grade point averages to finalizing budget allowances. An employee who has a thorough understanding of basic mathematical principles can help prevent unintentional overspending, allocate receipt line items to appropriate accounts, and provide a high level of support by accurately calculating customer purchases and orders.

Find a talented, detail-oriented job candidate – who can immediately and effortlessly sweep into a new role – by using this business math test to gauge their mathematical proficiency. The business math test provides insight into a candidate’s ability to leverage formulas and numbers to support operational efficiencies and minimize errors and omissions.

The business math test helps predict a job candidate’s ability to:

  • Discover what fraction of sales originated from a particular sales territory.
  • Evaluate a budget and determine the amount of funds that can be allocated to a specific category.
  • Identify the percentage of students who are enrolled in extracurricular activities.
  • Figure the total cost of a catering order, taking into consideration item quantity, item cost, and tax rate.
  • Calculate the percentage of produce items a market needs to sell by the end of the week to remain profitable.
  • Reference a series of student homework and exam grades to assign final course grades.

Use this business math test to quickly and easily estimate the mathematical proficiency of entry-level or experienced candidates, including bookkeepers, accounting technicians, teachers, sales representatives, warehouse associates, event coordinators, catering managers, or any other applicable position that analyzes financial or numerical data to perform calculations or solve equations.

EXAMPLE QUESTIONS

Sample Question 1

PROJECT BUDGET
Expense Total Cost
Transit ?
Lodging $2,400
Conference fees $2,850
Meals $700
TOTAL BUDGET $8,000

How much money is in the budget for transit?

Sample Question 2

See the price sheet below:

Monitor Price Sheet
Item Price
Black Monitor $140
Wide Monitor $320
Touchscreen Monitor $400
Sleek Monitor $310

A customer wants to buy 3 Sleek Monitors and 2 Wide Monitors. What’s the total cost?


Assessing Your Math Quotient

If you aren’t sure what type of business math class to take or at what level you would be successful, an assessment exam can help. By taking a math assessment test, you can earn college credit, save time by taking advanced courses and, subsequently, save tuition costs.

There are many online assessment tests you can take. Make sure it is from an accredited college or school so you can receive credit for your efforts.

For example, the Athabasca University math course provides an online assessment test that contains 70 questions. The mathematics diagnostic assessment can help students to assess their mathematical skills to figure out which math course would work best for them.


Business math : a step-by-step handbook

"Business math is the study of mathematics required by the field of business. Business professionals will work with taxes, gross earnings, product prices, and currency exchange they will be offered loans, lines of credit, mortgages, leases, savings bonds, and other financial tools. This textbook covers all of these topics and how these financial tools can maximize their earnings and minimize their costs. It also discusses how to execute smart monetary decisions both personally and for their business. There are two versions for this book: The "Basic Edition" and the "Premium Edition." While they cover the same content, the Premium Edition includes additional features such as Excel integration, Excel templates, Excel screenshots, along with lots of extra visuals and graphics to help student wrap their heads around the numbers, procedures, and concepts that they work with. The Basic Edition does not include Excel and those extra visuals and graphics in order to streamline the book"--BC Campus website.


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The federal tax withholdings are challenging due to individual cases having different information and referencing the correct line on the table, especially if the pay scale is over the amount listed on the table.

Yes Kelsie! Haha. I don’t know about ya’ll, but when I was answering some of the questions I was like “Who is Michael? And how is he making 23,000 a month? And why am I not getting paid to figure out his federal income taxes?!” Pretty Funny!

I feel the same. Every case is different on number of with holdings.

I can honestly say that I am learning here. And I really enjoy how business math actually applies to real life. When I was in high school I took Calculus BC which, although challenging, I found pretty easy. Here, it’s a different story. And as much as I despise word problems, attention to detail is critical. Don’t get even me started with the case studies! One slip-up and you’re forced to take the practice questions all over again. Ugh! But in this class you can’t just plug-and-chug. You must understand what every problem is saying and know what you are trying to solve for. And you have to know why you are solving the problem.

Additionally, in this chapter there are a few concepts that I found difficult, like adjustments. Do adjustments get calculated into the gross income to achieve the adjusted gross income? If my memory serves me, I think this is what happens. And then we can use the adjusted gross income to find the Social Security Tax and Medicare Tax.

Also, why is anything after $118,500 non-taxable for social security tax? Was this number arbitrarily made up? Or does this benefit the wealthy? Think about it. If the majority of working class citizens are middle class and make less than $118,500/yr, then all of their income is taxable. Whereas anyone who makes more than this does not have to pay additional social security tax after $118,500.

Lastly, I never really thought about all that managers had to think about when hiring employees. If you have ever asked, “Well why don’t they just hope more people,” you may not understand all the taxes that business have to pay to the IRS. Think about it, an employee that makes $1,090 semimonthly every pay period might actually cost a business $1,800 after SUTA, FUTA, Social Security, Medicare, and additional taxes and incentives are factored into a paycheck. These kinds of expenses can effect a business location’s markup on goods too. For example, one store might offer lower markups because it’s not dishing out as many payroll expenses as the same store in the same city but in a crowded district that has many employees. Obviously the amount of sales a business receives effects prices too. However, you can see my point that one store may offer a 25% markdown that the same store elsewhere is not.

You have some great ideas, I also wonder about the amount $118500, who made it and what it is based on. You bring up a great point in the last paragraph, I never though about how these expenses can affect a business’s markups.

Working through the different classes in my accounting certificate has really opened my eyes to the many expenses that businesses face, not least of which is payroll! I took Payroll Accounting last semester and it was really quite overwhelming to realize the regulations and taxes that businesses have to keep up with, some of which change yearly!
I was curious about your Social Security question and googled it. From what I read, it seems that there is a cap on benefits as well as on taxes. So higher earners do not receive an equal benefit to those who paid SS tax on all their income. Someone can correct me if I’m wrong on that, but it seemed logical to me as well.

I never realized how expensive it is to hire employees with all the taxes. I always thought I wold try to expand my future business to be as big as possible as quickly as possible by hiring employees. Now I want to stay as small as possible for as long as possible. I think this could also be a reason why online businesses are growing and brick and mortar stores are closing.

I find the withholding tax to be most challenging only because it has the most steps involved. As long as I follow the steps, it usually ends up being pretty simple for me. I also find the social security to be a little tricky when it starts to get close to the limit but again, following the steps helps a lot.

Hi Rachael,
I too find it confusing as to remember when to figure in the withholding and when to not use it in the calculations. I have found many times I have to go back because I am not paying attention to the numbers and withholding amounts.

I have so much respect for payroll technicians and clerks after realizing all that they have to remember and calculate with all the different types of taxes, deductions, allowances, and exempt/non-exempt status. Doing that job would definitely require strong attention to detail and a really good checklist! When I worked for a large non-profit organization in cash management, I remember that the payroll clerk took about two days just to accurately compute everyone’s pay in preparation for the bi-weekly payroll run. Totally makes sense now!

I found the SS deductions tricky to with it dealing with the limit. It took me a couple practice tries before understanding it completely in the hw assignments. Now its engraved in my memory.

I tend to struggle with the income tax withholding and the allowance calculations. Nowadays we have software that automatically calculates the federal, state, social security and medicare taxes. Starring at the IRS tables can be quite confusing and if you are not careful you will obtain the incorrect withholding amount.

I agree the IRS tables can be overwhelming, and have often though about how easy we have it now with software doing most of the work.

I agree it is very overwhelming and can be confusing. I find if late at night the numbers all seem to blend together. I think the best time to figure out taxes is usually when you are most alert.

Agreed. After practicing the case study over and over and over and over again, I finally understand how to calculate the federal withholding tax using the percentage table method and the wage-bracket method.

Starring at those tables can be overwhelming. Having the software helps tremendously, I feel. I couldn’t imagine being in payroll before the software came out.

I would say that the calculation I find the hardest is remembering what is included in the tax withholdings. The example being when you use it and how such as with Social Security and Medicare taxing. I am sure the more practice will make this easier to grasp.

I find the calculation for what a employer has to pay more difficult, due to the fact that you have to remember two double the SS deduction.

That was confusing at first. The employee pays it but you deposit it in the total. That threw me off.

That one was a bit tricky for me as well. NI’m just not a fan of payroll in general I suppose!

I think that one of the most challenging calculations in payroll is the percentage method of calculating Federal income tax. The wage bracket method is pretty simple by comparison, although one still has to be very careful to read the correct lines.
Payroll taxes also get complicated as you get farther along in the year and employees meet income caps for different kinds of taxes. So you have to always be aware of when they are approaching the $7,000 yearly SUTA tax cap, for example, or the $118,500 Social Security tax cap.

Yes you do have to be very careful with staying in the right line to deduct the right amounts! I actually got in the habit from my income tax class of holding a paper up to the computer while I write down the amounts in the line so I don’t accidentally input the wrong numbers.

Yes! the SUTA and FUTA tax was very frustrating.

I agree with you, I got confused by the unemployment taxes.

The calculation I found most challenging was the FUTA one. I tried the way I thought was correct and then tried different input for the hw and the test and I missed it every time. I thought it was all the employees pay added together then multiplies by .6%. Did anyone else have issues with this one like I did or care to explain how I can get the right answers when calculating the equation? Other then that tax equations are definitely something you have to practice. I am taking income tax class right now and its not as easy as I thought it would be, I completely understand why so many people go to professionals to get their taxes done.

I had trouble with this one too. I kept getting the question wrong when trying to calculate the FUTA tax when I thought for sure I was doing it correctly. I kept having the amount of change wrong. It was very confusing. For example, I had one question that I thought came out to 168.40 but when I went over it after the test it was just the 168, I added it up again and still got the extra 40 cents, so I was baffled.

Payroll is what I want to do after I graduate, it was my favorite class so far in working towards my degree. I find that figuring out the federal withholding is the most difficult for me. There are so many different tables to go by to figure out the amount you’re supposed to have withheld.

I find the tax tables to be rather tedious. The tax laws seem almost too convoluted to understand. I have a lot of respect for accountants and tax professionals after this.

for me the most difficult part was the SUTA tax and the FUTA tax. I’m still having a hard time with it, I think I’m going to pull out my hair! lol

Same. It took me like 20 minutes to figure that one out!

I had the most trouble with calculating the FUTA and SUTA tax! It took me forever to figure out what I was doing wrong. In the end I finally figured it out though.

I think finding the federal tax withholding is most difficult. For federal tax withholding, there are so many factors to consider. You have to think about any adjustments that qualify to reduce the taxable income, then the allowances, then search a table for the correct filing status and pay period frequency. That’s a lot of steps to consider. No wonder people use payroll software or outsource the payroll.

The federal withholding tax using the percentage method was really confusing because of all the steps involved. Figuring out which table to use was also tricky and then reading the really small print!
Also, I messed up the fist time I used the differential piecemeal rates by overpaying the employee in the problem, but I learned from my mistake.
It took me a really long time to do the work this week, but I got it!

I too had trouble with this equation. When I saw the questions regarding this method on the test, I immediately went blank. I did not spend enough time going over this method.

The exam was a lot harder than I expected! I thought I had the tax equations down! For me the hardest part of this was the different situations that each person had. I think I missed one step on the longer questions on the exam even after completing them more than a couple times!!

The equation I have the hardest time with is the IRS tax withholding percentage method. I came across them in the test and was instantly confused. It will have to be something I go back and take a second look at.

Same here. I was attempting to follow the step by step directions from the book while doing the questions and I only came close on one of them. Hopefully I can master it soon, since I am also in Payroll accounting I am hoping one of my chapters will dive deeper into the explanation of the percentage tables!

A second third and fourth look for me but I believe ill get it down so that I don’t have to look into the chapter to remember how to do the steps.

I never thought I would enjoy payroll, but I really liked this chapter. I think figuring out withholdings and taxes in general is difficult. There is so much to remember. If you use the tables though, it helps a great deal. I found the hardest things for me were SUTA and FUTA. I am curious to know where all the random numbers come from (in the tables and such), or if they are indeed random.

I loved this chapter too. The FUTA number that I think your talking about is the amount of the tax. The way you find it is by multiply the (weekly/semimonthly/etc) salary and multiply it by the FUTA percentage and that’s the base tax amount for each pay period.

I find that the federal tax can be tricky, since it is a basis to basis calculation and many different factors play into it. I also am not quite understanding the percentage tables and all the factors that go into using those. I got one of the three questions using the percentage tables correct.

The federal withholding using the percentage method was easy but tricky for me. It seemed so easy to find and figure out but the steps did confuse me a bit. I believe I got it down but I forget some steps if I don’t have the text in front of me. if I just continue to study it I know I can get it down completely.


Business Math

The basic math and economic skills needed to function in a business setting are presented with the intent of providing students a practical math course for use in their daily lives. The American free-enterprise system is portrayed in a positive light throughout the curriculum. The study about basic finances, banking, and bookkeeping provides an excellent preparation for those who plan careers in business.

More specifically, students will create basic financial reports and perform many common calculations that reflect the health of a business. All forms of income, banking records, and investment opportunities will be explored. Students will learn about income taxes and generate multiple tax returns. The year will end with students creating a basic business plan. This excellent real-world math course uses business-related topics to demonstrate how math is needed for all business and personal finance decisions.

Available : Section 721-AA-SEP

Business Math

The basic math and economic skills needed to function in a business setting are presented with the intent of providing students a practical math course for use in their daily lives. The American free-enterprise system is portrayed in a positive light throughout the curriculum. The study about basic finances, banking, and bookkeeping provides an excellent preparation for those who plan careers in business.

More specifically, students will create basic financial reports and perform many common calculations that reflect the health of a business. All forms of income, banking records, and investment opportunities will be explored. Students will learn about income taxes and generate multiple tax returns. The year will end with students creating a basic business plan. This excellent real-world math course uses business-related topics to demonstrate how math is needed for all business and personal finance decisions.

Available : Section 721-AA-SEP


Course Lessons

Lesson 1: Introduction to Course on Business Math

  • Lesson 1 Video
  • Take Poll: Famous Quote
  • Take Survey: Reasons for Taking this Course
  • Complete: Lesson 1 Assignment: Getting Started
  • Complete: Lesson 1 Exam: Introduction to Course on Business Math

Lesson 2: Decimal System

  • Lesson 2 Video
  • Complete: Lesson 2 Assignment: Decimal Practice
  • Complete: Lesson 2 Exam: Decimal System

Lesson 3: Fractions, Decimals, and Percents

  • Lesson 3 Video
  • Complete: Lesson 3 Assignment: Practicing Percents
  • Complete: Lesson 3 Exam: Fractions, Decimals,Percents

Lesson 4: More Percents, Ratios, and Exponents

  • Lesson 4 Video
  • Complete: Lesson 4 Assignment : Percents and More
  • Complete: Lesson 4 Exam: More Percents, Ratios, Exponents

Lesson 5: Personal Finance

  • Lesson 5 Video
  • Take Poll: Business Math Experience
  • Complete: Lesson 5 Exam: Personal Finance

Lesson 6: Math in Retail and Sales

  • Lesson 6 Video
  • Complete: Lesson 6 Assignment: Retail Math
  • Complete: Lesson 6 Exam: Math in Retail and Sales

Lesson 7: Purchasing in Business Transactions

  • Lesson 7 Video
  • Complete: Lesson 7 Assignment: Invoices
  • Complete: Lesson 7 Exam: Purchasing in Business Transactions

Lesson 8: Bookkeeping

  • Lesson 8 Video
  • Complete: Lesson 8 Exam: Bookkeeping

Lesson 9: Graphs and Charts

  • Lesson 9 Video
  • Complete: Lesson 9 Assignment: Understanding Graphs
  • Complete: Lesson 9 Exam: Graphs and Charts

Lesson 10: Statistics, Measurements and Scale

  • Lesson 10 Video
  • Take Poll: Business Math Plans
  • Complete: Lesson 10 Assignment: Statistics and Measurement
  • Complete: Lesson10 Exam: Statistics, Measurements and Scale

Lesson 11: Office Practice

  • Lesson 11 Video
  • Complete: Lesson 11 Exam: Office Practice

Lesson 12: Balance in Life

  • Lesson 12 Video
  • Take Poll: Let us know what you think of this course
  • Take Survey: Program Evaluation Follow-up Survey (End of Course)
  • Complete: Lesson 12 Assignment: Learning About Yourself
  • Complete: Lesson 12 Exam: Balance in Life
  • Complete: The Final Exam


Watch the video: Business Math - Finance Math 1 of 30 Simple Interest (December 2021).