UGBS 202 Study Guide

UGBS 202
BUSINESS
MATHEMATICS
STUDY GUIDE
UGBS 202
BUSINESS MATHEMATICS
STUDY GUIDE
For Undergraduates Level 200
2016/17 Academic Year
Dr. Anthony Afful-Dadzie, University of Ghana Business School

Mr. Divine Agozie, University of Ghana Business School
Acknowledgements
Many thanks to Mr. Charles Ofori Gyamfi, the Teaching Assistant, for
his immense contribution towards the development of this study guide as
well as the development of the course slides.
STUDY GUIDE
UGBS 202 BUSINESS MATHEMATICS
Table of Contents
1. COURSE WEBSITE ....................................................................................................... 4
2. INSTRUCTORS ............................................................................................................ 4
3. Support Contact Information ...................................................................................... 4
4. OVERVIEW ................................................................................................................. 5
5. COURSE FORMAT ...................................................................................................... 5
6. COURSE OBJECTIVE ................................................................................................... 5
7. LEARNING OUTCOMES.............................................................................................. 5
8. ASSESSMENT .............................................................................................................. 6
9. RECOMMENDED TEXT ............................................................................................... 6
10. COURSE SCHEDULE .................................................................................................... 7
11. SESSION 0 – INTRODUCTION TO UGBS 202 ............................................................. 7
11.1. Overview ................................................................................................................................. 7

11.2. Goals and Objectives ........................................................................................................... 7
11.3. Activities and Assignments .................................................................................................... 7
12. PART 1 – BASIC CALCULUS AND ALGEBRA .............................................................. 7
12.1. Session 1 – Introduction to Functions and Differentiation ............................................... 8

12.1.1. Goals and Objectives ........................................................................................................... 8
12.1.2. Activities and Assignments .................................................................................................... 8
12.2. Session 2 – Continuation of Session 1 ................................................................................ 8
12.3. Session 3 – Relative Extrema and its applications in business ...................................... 9
12.6 Session 4 – Integration.......................................................................................................... 9
12.4.1 Goals and Objectives ........................................................................................................... 9
12.4.2 Activities and Assignments ..................................................................................................10
12.6 Session 5 – Continuation of Integration ...........................................................................10
12.5.1 Goals and Objectives .........................................................................................................10
12.6 Session 6 – Introduction to Mathematical Modeling .....................................................10
UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 2 of 16
STUDY GUIDE

13. PART 2 – MATHEMATICAL FINANCE ...................................................................... 11
13.1 Session 7 – Indices ...............................................................................................................11

13.1.2. Activities and Assignments ..................................................................................................12
13.2 Session 8 – Introduction to financial mathematics ..........................................................12
13.3 Session 9 – Continuation of Introduction to financial mathematics .............................12
13.4 Session 10 – Investment Appraisal ...................................................................................13
14. PART 3 – BASIC PROBABILITY AND STATISTICS ..................................................... 14
14.1 Session 11 – Introduction to Probability and Probability distributions......................14

14.2 Session 12 – Decision making under uncertainty ...........................................................15

STUDY GUIDE
COURSE DESCRIPTION
1. COURSE WEBSITE
Please check the University of Ghana Sakai Website
2. INSTRUCTORS
Dr. Anthony Afful-Dadzie* Mr. Divine Agozie
Dept. of Operations and MIS Dept. of Operations and MIS
University of Ghana Business School University of Ghana Business School
P. O. Box LG 78 P. O. Box LG 78
Legon, Accra Legon, Accra
Email: aafful-dadzie@ug.edu.gh Email: dagozie@ug.edu.gh

Office: GS 3, UGBS Office: 3W4, New Graduate Block,
UGBS
Dr. Anthony Afful-Dadzie is the corresponding instructor.
3. Support Contact Information

School of Continuing and Distance Education
University of Ghana
P. O. Box XXXXXXX
Legon, Accra
Phone: XXXXXXXXX
Email: XXXXXXXXXXXX

STUDY GUIDE
4. OVERVIEW
Business Mathematics brings together a collection of mathematical tools that are useful in most
quantitative business courses. These tools include differentiation, integration, functions and matrix
algebra as well as basic statistics and probabilities. We will quickly review functions,
differentiation, integration, and linear inequalities, and their application in business in the first
part of the course. This will be followed by an introduction to basic mathematical finance in the
second part. The third part of the course focuses on basic statistics and probabilities and its
application in business. These tools and their applications will be demonstrated using MS Excel
whenever possible.
5. COURSE FORMAT
The course content will be delivered online through the SAKAI Learning Management System
(Sakai LMS). The Sakai LMS will be used to deliver
• Video Sessions
• Session Slides
• Session Reading Materials
• Assessments – Tests, Quizzes and Assignments
6. COURSE OBJECTIVE
The overall objective of this course is to give students the understanding of the basic mathematics
needed for analyzing business problems. At the end of the course, students are expected to be
able to formulate, solve, interpret, and analyze further, real world business problems using the
mathematical concepts covered. Students should also appreciate the importance of data and
understand the various techniques for collecting, presenting and describing data.
7. LEARNING OUTCOMES
Students are expected to have a good knowledge in the mathematical concepts covered in this
course which will serve as a foundation for most of the business courses at the senior
undergraduate level.
Specifically, students must:
 Understand differentiation and Integration and their applications in business
 Be able to formulate and optimize business decisions
 Understand Time Value of Money and be able to use concepts such as Payback Period,
NPV, and IRR to assess business ventures.
 Be able to collect, present, and analyze data for insight and decision making purposes
 Be able to analyze business problems using decision tress

STUDY GUIDE
8. ASSESSMENT
Students will be assessed based on their performances in the Interim Assessment (IA) exam to
be held in the middle of the semester, and the final exam to be taken at the end of the semester.
Both exams will have a blend of multiple choice and standard full questions. A summary of the
weights for each exam is provided below.
Exam FORM OF ASSESSMENT DELIVERED MARKS

Interim Assessment (IA) Close book exam Middle of semester 30%
Final Examination Close book exam End of semester 70%
Total 100%
9. RECOMMENDED TEXT
Part 1 and 2:
Ernest F. Haeussler, Richard. S. Paul, and Richard J. Wood. Introductory Mathematical Analysis
for Business, Economics, and the Life and Social Sciences. Pearson, 2013.
Bradley, T., and Patton, P. (2013). Essential mathematics for economics and business. Wiley.
Waters, D., & Waters, C. D. J. (2008). Quantitative methods for business. Pearson Education.
Part 3:
Groebner, D. F., Shannon, P. W., Fry, P. C., and Smith, K. D. (2011). Business Statistics: A Decision
Making Approach. Prentice Hall/Pearson.

STUDY GUIDE
DETAILED COURSE SCHEDULE

The course is organized into 3 PARTS (each comprising a number of sections) along the following
lines: (1) Overview; (2) Goals and Objectives; and (3) Activities and Assignments.
10. COURSE SCHEDULE
Week Part
1-5 1
6-10 2
11-13 3
11. SESSION 0 – INTRODUCTION TO UGBS 202

11.1. Overview
This course makes use of the course learning management system (LMS), Sakai. Sakai is password
protected. To access Sakai, go to https://sakai.ug.edu.gh/portal/, and enter your index number in
the space for user id, and your UG four digit number for the password.
11.2. Goals and Objectives

At the end of the session, the student will
1. Become familiar with the tools in the Sakai LMS to be used in the course.
2. Understand why business mathematics is important. Students will be able to differentiate

between business problems that requires the use of mathematics and those that do not.
11.3. Activities and Assignments

The following tasks should be completed after the completion of Session 0:
1. Log onto the UG Sakai LMS course site
2. Familiarize yourself with the course description provided in this text
3. Watch the Video for Session 1, Session 1 - Differentiation
4. Visit the Chat Room and introduce yourself while discussing expectations for the course
5. Explore the online tools available in Sakai.
12. PART 1 – BASIC CALCULUS AND ALGEBRA

This part will overview concepts such as Functions, Differentiation, Integration, and their applications
in business. These concepts will be useful in future courses in economics, finance and accounting.
Students are encouraged to make the effort to understand the concepts as well as the role they
play in the analysis of real world business problems. In a nutshell, while differentiation looks to

STUDY GUIDE
‘break up’ the whole, integration does the opposite and ‘brings together’, the smaller pieces making
up the whole.
12.1. Session 1 – Introduction to Functions and Differentiation
To differentiate, is to ‘break up’ in to pieces. In mathematics, if the variable y is related to the
variable x, so that y is a function of x, then to differentiate the function y with respect to the variable
x, is to find the changes/impact on y, as a result of an infinitesimal change in the variable x. For
instance, profit is known to relate to product quantity. One could be interested in what happens to
profit when the current quantity size is increased by a small amount. If the profit function is
differentiable, this can be determined using differentiation. The aim of this session is to introduce
students to this important concept of differentiation and its application in business.
12.1.1. Goals and Objectives
At the end of the session, the student should be able to understand the following concepts:
1. Functions
a. What is a function
b. The role of a function
c. Example functions in business and economics
2. Differentiation of a function
a. Differentiating from the First Principle
b. Rules of differentiation
i. Single function
ii. Two or more functions of the same variable
iii. The Quotient Rule
12.1.2. Activities and Assignments

This week, complete the following tasks:
1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh
2. Read chapters 2 and 11 of Haeussler and chapters 4, 6 and 7 of Bradley
3. Watch the Videos for Session 1
4. Review lecture Slides for Session 1
5. Visit the Chat Room and discuss the Forum question for Session 1
6. Complete the Individual Assignment for Session 1
12.2. Session 2 – Continuation of Session 1

1. Chain Rule
2. The generalized Power Function
3. Differentiation of special functions
4. Partial Differentiation

STUDY GUIDE

2. Read chapters 11 and 12 of Haeussler and chapter 7 of Bradley
12.3. Session 3 – Relative Extrema and its applications in business
Often in business, one is interested in determining the very best from every endeavor. This is often
equivalent to finding a certain decision value that will lead to the attainment of the maximum or the
minimum objective (e.g. profit, revenue, utility, cost, etc). The concept of ‘relative extrema’ (i.e.
maxima and minima) which make use of differentiation can be used to determine such decision
values that achieve either the maximum or minimum objective. This session introduces the concept of
relative extrema and its applications in business.
5. Relative Extrema
6. Applications of Relative Maxima and Minima

8. Read chapter 13 of Haeussler and chapter 6 of Bradley
12.6 Session 4 – Integration

Just as to differentiate is to ‘break up’, to integrate, is to ‘bring together’. For example, one might
know the marginal production cost of a product. Integration helps in finding the total production
cost from the marginal cost. The concept of integration is popular especially in the determination of
areas of shapes, most importantly for irregular shapes. An example of this can be seen in the
determination of producer and consumer surplus especially for non-linear supply and demand
curves in economics.
12.4.1 Goals and Objectives

1. Differentials and Integral
2. The Indefinite Integral
3. Integration
STUDY GUIDE
a. Elementary Integral formulas

b. Integration with Initial Conditions
c. Power Rule for Integration
4. The Definite Integral
12.4.2 Activities and Assignments
2. Read chapters 14 and 15 of Haeussler and chapter 8 of Bradley
12.6 Session 5 – Continuation of Integration

Sometimes a function might be too difficult to integrate. That is to say, it might be difficult or even
impossible to use the rules of integration studied earlier. Fortunately, using the idea of ‘area’ of
shapes, one can approximate the integration of such difficult functions easily and faster. In fact, this
is the approach employed in modern computers for large sized integration problems. This session
will introduce students to the popular approximation techniques for integration.
1. Integrating a function via approximation techniques

a. The Trapezium Rule
b. The Simpson’s Rule
c. Applications

2. Read chapters 14 of Haeussler
12.6 Session 6 – Introduction to Mathematical Modeling

This session will introduce students to techniques for transforming business ‘word’ problems into
mathematical formulas. Mathematical formulation makes use of functions and equations, which are
then solved using techniques including those discussed in earlier chapters. The session places more
emphasis on mathematical formulation of business problems.

STUDY GUIDE

1. Decision variables
2. Objective functions
3. Constraints
a. Linear equations and inequalities
4. Mathematical formulation using decision variables, objective functions and constraints

2. Read chapter 7 of Bradley, and accompanied session notes
Complete the Individual Assignment for Session 6
13. PART 2 – MATHEMATICAL FINANCE

This section presents a collection of mathematical techniques for (1) tracking financial values over
time, and (2) evaluating financial projects/investments. It begins with a look at financial indices used
for monitoring changes in financial values over time. This is followed by financial techniques for
calculating the worth of a stream of cash flows over time, as well as techniques for evaluating the
worth of projects/investments.
13.1 Session 7 – Indices
Business managers, investors and stock traders often monitor the movement of prices of goods and
stocks, market share and sales over time. Such movement or changes can be monitored using Index
numbers. Various indices exist including the Consumer Price Index, the Producer Price Index, Retail
Price Index, and Commodity Price Index. A number of stock exchanges such as the New York Stock
Exchange (NYSE) and the London Stock Exchange (FTSE) maintain their own indices to track the
movement of average stock price over time. This session overviews the various techniques for
monitoring important business values over time.

1. understand the purpose of index numbers
2. calculate indices for changes in the value of a variable
3. change the base of an index
4. use simple aggregate and mean relative indices
5. calculate aggregate indices using base-weighting and current-weighting

STUDY GUIDE

2. Read chapter 7 of Donald and the accompanied notes for session 7
13.2 Session 8 – Introduction to financial mathematics

This session presents the financial techniques used in determining the worth of a stream of cash flows
over time, and for the evaluation of financial projects/investments. Because of inflation and
depreciation, Ghs 1 today might be worth less tomorrow. If one factor in the need to make profit,
and the fact that cash could be received over several periods spanning the life of a project, it is
imperative a systematic approach is followed to estimate the worth of projects for increase profit.
This session introduces the concept of time value of money, and derives shortcut formulas for
determining the present and future values for some familiar stream of cash flows over time.

At the end of the session, the student should be able to understand:
1. Simple and Compound Interest
2. Time value of money and compound interest
3. The relationship between present and future cash values
a. Single Amount
b. Stream of cash flows
i. Uniform
ii. Arithmetic gradient
iii. Geometric gradient
iv. Cash flows in perpetuity
2. Read chapter 5 of Bradley, chapter 5 Haeussler, and chapter 8 of Donald and the
accompanied notes for session 8.
13.3 Session 9 – Continuation of Introduction to financial mathematics

Often times, one is required to pay down a loan by depositing an amount each period towards
repayment (or amortizing) of the loan. Other times, one seeks to save money (ie. put money in a
sink) periodically towards the financing of future endeavors. The first part of this session introduces
STUDY GUIDE
students to the concepts of amortization and sinking fund for meeting future obligations. Another
important concept especially in lending transactions is length of compounding period. If interest is
compounded more than once per year, the effective rate per year will be slightly higher than the
nominal rate often quoted by lending agencies. The second part of the session introduces students
to the concepts of nominal and effective interest rates as used in the evaluation of investments,
banking transactions, and evaluation of assets.
At the end of the session, the student should be able to:
1. understand amortization and sinking fund
2. construct amortization and sinking fund schedule
3. understand Nominal and effective interest rates
4. determine effective interest rate from a nominal interest rate and vice versa
5. understand continuous compounding
6. compute Inflation adjusted interest rates
13.4 Session 10 – Investment Appraisal

When faced with the challenge of deciding which project(s) among a number of competing projects
to undertake, it often comes down to comparing the worth of the competing projects. This exercise
must be carried out with care especially when the competing projects/investments have different
life span/and or different rates of return. This session introduces students to the concepts of Payback
Period, Net Present Value (NPV), and Internal Rate of Return (IRR) for evaluating financial
projects/investments.

1. understand and apply capital appraisal techniques
a. Payback period
b. Net Present Value
i. Equal life span
ii. Unequal life span
c. IRR
STUDY GUIDE

14. PART 3 – BASIC PROBABILITY AND STATISTICS

Most times, one would have to make a decision before observing the outcome. For example, invest
in a business today and make profit/loss tomorrow; plan electricity generation capacity today in
anticipation of next year’s demand which is uncertain; toss a coin, the result is uncertain and could
be “Head” or “Tail”. How can one make better decisions in such an uncertain environment? Decisions
of such nature are made with the help of probabilities. This session introduces students to the basic
rules of probability, and random variables that are at the heart of decision making in the presence
of uncertainty. The session ends with an introduction to Decision Trees, which is a popular technique
for analyzing business problems of sequential nature under uncertainty.
14.1 Session 11 – Introduction to Probability and Probability distributions

The concepts of probability and probability distributions are at the heart of decision making under
uncertainties. Probabilities are used to represent the chances of the occurrence of an event, whiles
probability distributions assign probabilities (i.e. chances) to the occurrence of every possible
outcome of an event yet to occur. This session reviews the basic rules of probability, explains some
notable concepts of probabilities, and introduces the concepts of random variables, probability
distribution.
1. understand the rules of probability and how to assign or determine probability for each
possible outcome of an event.
2. understand the concepts of random variables and probability distribution
3. understand and calculate expectation (ie. mean or average) of a random variable
4. understand and calculate standard deviation and coefficient of variation of a random
variable.
5. understand the role of coefficient of variation in business
2. Read chapters 12 and 13 of Donald, chapters 8 and 9 of Haeussler, and the accompanied
notes for session 11.

STUDY GUIDE
14.2 Session 12 – Decision making under uncertainty

This session takes a look at techniques for analyzing business problems under uncertainty with
particular emphasis on Decision Trees which is often used for evaluating business problems of
sequential nature and under uncertain environment.
1. understand and solve business problems under uncertain environment and of sequential
nature using decision trees.

7. Read the accompanied notes for session 12.

UGBS 202 Study Guide

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

UGBS 202 Study Guide

Uploaded by

Copyright:

Available Formats

UGBS 202

Dr. Anthony Afful-Dadzie, University of Ghana Business School

1. COURSE WEBSITE ....................................................................................................... 4

3. Support Contact Information ...................................................................................... 4

5. COURSE FORMAT ...................................................................................................... 5

6. COURSE OBJECTIVE ................................................................................................... 5

9. RECOMMENDED TEXT ............................................................................................... 6

10. COURSE SCHEDULE .................................................................................................... 7

11. SESSION 0 – INTRODUCTION TO UGBS 202 ............................................................. 7

11.1. Overview ................................................................................................................................. 7

12.1. Session 1 – Introduction to Functions and Differentiation ............................................... 8

12.6.1 Goals and Objectives .........................................................................................................11

13.1 Session 7 – Indices ...............................................................................................................11

14.1 Session 11 – Introduction to Probability and Probability distributions......................14

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 3 of 16

Email: aafful-dadzie@ug.edu.gh Email: dagozie@ug.edu.gh

Dr. Anthony Afful-Dadzie is the corresponding instructor.

3. Support Contact Information

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 4 of 16

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 5 of 16

Exam FORM OF ASSESSMENT DELIVERED MARKS

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 6 of 16

DETAILED COURSE SCHEDULE

10. COURSE SCHEDULE

11. SESSION 0 – INTRODUCTION TO UGBS 202

11.2. Goals and Objectives

2. Understand why business mathematics is important. Students will be able to differentiate

11.3. Activities and Assignments

12. PART 1 – BASIC CALCULUS AND ALGEBRA

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 7 of 16

12.1.2. Activities and Assignments

12.2. Session 2 – Continuation of Session 1

12.2.1. Goals and Objectives

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 8 of 16

12.2.2. Activities and Assignments

12.3.2. Activities and Assignments

12.6 Session 4 – Integration

12.4.1 Goals and Objectives

a. Elementary Integral formulas

12.6 Session 5 – Continuation of Integration

1. Integrating a function via approximation techniques

12.5.2 Activities and Assignments

12.6 Session 6 – Introduction to Mathematical Modeling

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 10 of 16

12.6.1 Goals and Objectives

12.6.2 Activities and Assignments

13. PART 2 – MATHEMATICAL FINANCE

13.1 Session 7 – Indices

13.1.1 Goals and Objectives

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 11 of 16

13.1.2. Activities and Assignments

13.2 Session 8 – Introduction to financial mathematics

13.2.1 Goals and Objectives

13.3 Session 9 – Continuation of Introduction to financial mathematics

13.4 Session 10 – Investment Appraisal

13.4.1 Goals and Objectives

13. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh

14. PART 3 – BASIC PROBABILITY AND STATISTICS

14.1 Session 11 – Introduction to Probability and Probability distributions

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 14 of 16

14.2 Session 12 – Decision making under uncertainty

14.2.2 Activities and Assignments

UGBS 202 BUSINESS MATHEMATICS - STUDY GUIDE 2016 Page 15 of 16

You might also like