BUSINESS MATHEMATICS

FUNDAMENTAL OPERATIONS

A. BASIC OPERATIONS

1. ADDITION : is a mathematical operation in which the sum of two or more numbers is computed or calculated.
The process is being aided by a (+) sign.

1. Add 4,569; 2,096; 1096; and 932

Addend 4,569

Addend 2,096

Addend 1,096

Addend 932

____________

Sum 8,693 Answer

2. SUBTRACTION : is a mathematical operation in which the difference of two numbers is being calculated. The subtrahend
is the number to be subtracted while the number from which we subtract is called minuend. The result of the process is the
difference. The process is aided by (-)sign.

1. Subtract 6,025 from 10, 233

Minuend 10, 233

Subtrahend (-) 6,025

______________

Difference 4,208 Answer

3. MULTIPLICATION : is a mathematical operation in which the product of two numbers is being computed or determined.
The multiplier tells how many times the multiplicand would be added. The process is aided by (x)sign.

1. Multiply 261 by 48

Multiplicand 261

Multiplier (x) 48

______________

2088 Partial Product

1044 Partial Product

------------------------

Product 12, 528 Answer

4. DIVISION : is the finding of the unknown factor in the process of multiplication when the product and one factor are
known or given. The number to be divided is called the dividend, the number by which the dividend is divided is called the
divisor and the resulting number is called quotient.

1. Divide 2,432 by 32

__76_ Quotient

Divisor 32/ 2,432 Dividend

2 244

__________

92

92

__________

0 remainder
EXERCISES:

A. Add the following.

1. 2,146; + 128; + 784; + 566; + 1,058 = ___________

2. 8,105; + 2,431; + 18,694; + 2,488; + 1,248 = ________

3. 64, 021; + 25,878; + 21,848; + 12,695; + 48,932 = __________

4. 5,495; + 34,921; + 4,782; + 495; + 8,946= _____________

5. 185; + 3,408; + 28,648; + 129,491; + 34,698= _____________

B. Subtract the following

1. 39, 307 from 48, 941 = ___________

2. 601, 246 from 789, 435 =__________

3. 469,749 from 1,246,985= _____________

4. 488,782 from 579,432= ______________

5. 895 from 9,435 = ______________

C. Multiply each of the following.

1. 25 by 36 = ___________

2. 158 by 49 = ________

3. 849 by 341= __________

4. 1,258 by 135 = _____________

5. 4,358 by 349 = _____________

D. Divide the following

1. 48 by 4= ___________

2. 68 by 12= ___________

3. 78 by 6 =__________

4. 349 by 12= _____________

5. 548 by 42= ______________

B. APPLICATION TO DECIMALS AND FRACTIONS

1. ADDITION & SUBTRACTION with

In adding decimals, addends with decimal component should be arranged according to their proper order or column. The
decimal point should fall in one vertical column in order to align the figures according to their values.

Add 3.085; 12.314; 94. 650

3.085

12.314

94.650

-------------------

Sum 110.049 Answer

Subtract 453. 562 from 794.650

794. 650

453. 562

__________________

Difference 341. 088 Answer

2. MULTIPLICATION with Decimals

In multiplying number with decimals , the number of decimal places of the product is equal to the total number of decimal
places of the factors.

Multiply 3.248 and 1.260

3.248 Multiplicand

(x) 1.260 Multiplier

- ----------------------------------

19488

6496

3248

---------------------

Product 4.09248 Answer

3. DIVISION with Decimals

In dividing numbers with decimal, the decimal point of the quotient is aligned vertically above the decimal point of the
dividend if the dividend contains decimal fractions while the divisor is a whole number. When both dividend and divisor
contain decimal fractions , the divisor should be made into a whole number by moving the decimal point to the right of the last
digit. Then, the decimal point of the dividend should follow and be moved to the same number of decimal places to the right as
done in the divisor.

Divide 125. 265 by 2.5

50. 106 Answer

2.5/1252.65

125

---------

---------

26

25

-------------

15

___________

150

150

______________

C. ROUNDING OF NUMBERS

Generally, numbers are rounded off to two-decimal places in making estimates and forecast specifically in monetary
computations. It is a practice to round off the final figure to the nearest centavo because the third decimal place is sometimes
immaterial.

General Guidelines:

1. When the digit to be dropped is 5 or higher, add 1 to the number to be rounded off.

a. 123.65 to the nearest unit = 124

b. 36.0589 to the nearest hundredths = 36.06

c. 615,678 to the nearest thousands = 616,000

2. When the digit to be dropped is less than 5, retain the digit to be rounded off.

a. 812.5 to the nearest tens = 810

b. 481.025 to the nearest units = 481

c. 1,246.85 to the nearest hundreds = 1200

EXERCISES:

A. Determine the sum of the following.

1. 13.058; 0.156; 156.891; 12.650; 165.9015 = ___________

2. 30.21921; 38.455; 138.5051; 642.133; 58.453= ________

3. 51.342; 2,421.463; 489,284.721; 907,246.318= __________

4. 1.085; 0.0058; 4,395.059; 125.00891; 2.580091= _________

5. 574.01; 32.51; 1.4531; 4.671; 563.13; 23.561; 0.345= _____

B. Subtract the following

1. 468.432 minus 391.681 = ___________

2. 874.31 minus 51.9231=__________

3. 3,019.2563 minus 564.3298= _____________

4. 90.183052 minus 56.732199= ______________

5. 910. 432 minus 56.195825 = ______________

FRACTIONS

In the field of business, the fraction in its basic form is very important. Shares in the corporations and the likes deal with parts
or portions which in turn are fractions. While we are exposed to numbers in business, we deal mostly with whole numbers.

But, we also come across figure in the form of fractions like one-half, three-fourths, two-fifths, etc. if a unit is divided equally
into two or more parts, each equal part is fractional parts of the unit which is usually express in fraction

1. Classification of Fractions

a. Proper Fractions – are fractions whose numerators are smaller than the denominators. These fractions specify values of
less than one (1).

Examples

2/3 3/7 45/56 8/45

b. Improper Fractions – fractions whose numerators are greater than the denominators. These fractions specify vales of more
than (1).

Examples

3/2 7/3 56/45 45/8

c. Mixed Numbers – are combination of fraction and whole number written as the sum of integer or whole number and a
proper fraction. An improper fraction can be expressed as a mixed number or vice versa.

Examples:

2¼ 12 4/7 23 5/9 6 14/27

PERCENT IN BUSINESS

A. PERCENT TO FRACTION

Percent number is really expressed in fraction having a denominator of 100 based on the meaning of word. Although the
denominator is not written in the percent number, it is understood that the number is a fractions having a denominator of
100.

Examples

1. 65% = 65/100 / 5/5 = 13/20

2. 82% = 82/100 / 2/2 = 41/50

3. 36% = 36/100 / 4/4 = 9/25

4. 12 ½ % = 25/2 % = 25/2/100 = 25/200 / 25/25 = 1/8

PERCENT TO DECIMAL

Percent is per “centrum meaning “for every one hundred or per 100”. In order to get the real value of a percent number , it
should be divided by 100. This basic process is converting percent number to decimal.

Examples:

12% = 12/100 = 0.12

47% = 47/100 = 0.47

68. 35% = 68.35/100 = 0. 6835

52.5% = 52.5/100 = 0.0275

DETERMINING THE PERCENTAGE

Percentage is the fractional portion of a whole which is called the Base B. This fractional portion is being described by the
Rate r . In the equation: P= B x r, the base B is the basis of comparison; the rate r is the percent indicating the number or
quantity for every hundred; while the percentage P refers to the fractional portion of the Base in the situation.

Formula:

P= Br

Where:

P= Percentage B=Base r=Rate

Examples:
 1. An employee who earned P25,000 a month spent 25% of his earnings to buy a wrist watch. How much is the wrist
watch?

Solution: Identify the given and the unknown data.

Given: B=P25,000 r=25% P=?

Formula : P=Br

P=P25,000 x 0.25

P=P6,250.00

FINDING THE RATE

One of the most commonly use word in business world is the word “Rate”. Financial analysts and consultants are the usual
users of this word in the form of “rate of return on investments”, +rate of return on equity”, etc. Comparison in terms of
performance is usually based on rates such as “this year sales is 15% greater than last tear sales.”

Formula:

R=P/B

Examples:

1. An employee who earned P18,500 a month spent P2,500 for his monthly travelling allowance . What percent of his
earnings did he spent for his travelling allowance?

Solution: Identify the given and unknown data.

Given : B=P18,500 P=P2,500 r=?

Formula: r=P/B

r= 2,500/18,500

r= 0.1351 x 100%

r=13.51

FINDING THE BASE

The base is the basis of the rate and percentage. The quantity of it can be determined by applying the first two equations.

Formula:

B=P/r

Examples:

1. Mr. Santos pays P8,000 for the monthly installment of his house and lot. This amount is 25% of his monthly income.
How much is his monthly income?

Solution:

Identify the given and unknown data.

Given: P= P8,000 r=25% B=?

Formula: B=P/r

B= 8,000/0.25

B=P32,000

Exercises:

A. Convert the following percent numbers to fractions.

1. 20%

2. 30%

3. 50%

4. 55%

5. 42 ½%

B. Express the following percent numbers to decimals.

1. 3%

2. 24%

3. 27.1%

4. 85.67%

5. 38.54%

EXERCISES

A. Determining the Percentage

1. What portion of P5,500 is 60%

B. Finding the Rate

1. A car dealer sold a second hand car for P95, 000. If the profit was P7,500, at what percent of the selling price was the
profit?

C. Finding the Base

1. Ms. Reyes got 90 points which was 75% of total points in accounting subject. What was the total points of the
accounting subject?
Chapter 3
buying and selling

DISCOUNTS

1. Trade Discounts

is a discount offered by a seller (manufacturer or wholesaler) to induce trading. This type of discount is usually found
in where a list is printed together with the trade discount thereon.

2. Selling Price

is the difference between the list or tag price and the trade discount upon release of the product.

3. Cash Discount

is the reduction on the selling price offered to the buyer to induce him to pay cash promptly. The treatment in
computing cash discount is the same as the trade discount.

4. Net Price

is the difference between selling price and cash discount . If there is no cash DISCOUNT, THE Selling Price is
considered to be the net price.

The Selling

Or Net price can be found in two ways of methods. When a trade discount or cash discount is given to the buyer. The two
methods are:

1. DISCOUNT RATE METHOD

The formula for discount rate method is the same as the percentage in the previous chapter. The term percentage (P),
base (B), and rate (r) in the equation are substituted with the terms discount (D), List Price or Tag Price (LP) and discount
rate (d).

In the formula:

P=Br

P= Discount(D), whether Trade or Cash Discount

B= List or Tag Price (L.P) or maybe Selling Price if there is Cash Discount

r=Discount Rate (d), whether Trade or Cash Discount Rate

Hence,D=L.P x d or D=S.P x d

D=Discount

L.P =List Price or Tag Price, or Selling Price

d= Trade Discount or Cash Discount

Then,

S.P = L.P – D

N.P = S.P – D
2. NET PRICE RATE METHOD

The net price method is simpler than the discount rate method. It is equal to the list price times the net price rate.

S.P = L.P (100% - d in %) 100%

N.P = S.P (100% - d in %)100%

Example:

The list price of a colored tv at PTDS marketing is P21,250. The trade discount rate is 5%. How much will the buyer
pay for the television set?

Solution:

Using the Discount Rate Method

Given:

LP= P21,250.00

d= 15%

D=?

Formula:

D=LP x d

D=21,250 x 0.15

D=P3,187.50

Net Price:

NP: LP – D

NP=21,250 – 3,187.50

NP=P18,062.50 Answer

Solution 2.

Using the Net Price Rate Method

Formula:

NP = LP(100%-d)

100

NP= 21,250(100-15)

100

NP= P18, 062.50 Answer

FINDING THE DISCOUNT RATE

If the net price and list price are given in the transaction for the product to be sold, the buyer should know how to determine
the discount rate in order to reasonably evaluate the discount offered.

Examples:

1. What is the discount rate if the list price of a commodity is P6,400 with a discount of P750?

Given:

LP = P 6400

D= P750

d= ?

Formula:

d= D x100

LP

d= 750 x100

6,400

d= 11. 72% Answer

Exercise:

What is the discount rate if the net price is P525 and the discount is P125?

Solution:

NP= P525 + 125 = P650

Given: NP= P525

D= P125

d= ?

Formula:

d= D x100%

LP

d= 125 x 100%

650

d=19.43%
Exercises:

1. MGM Auto Supply sold 12 tires at P4,275 each. The sale was subjected to a trade discount of 22 ½ %. What was the
total net price?

2. 2. Peter bought 2 sets of golf clubs for him and his son worth P62, 650 each. If he paid a total amount of P115,000,
what was the discount rate?

DISCOUNT IN SERIES

A common offer by the wholesalers and some retailers in the series of discounts. This trade practice is called discount in series.
If a wholesaler or manufacturer would give 15% and 5% trade discount on its goods or products, this does not mean that the
total amount of discount is 20%. In discount series, this only means that the first discount is 15% will be applied to the original
list price and second discount of 5% will be applied to the net price of the first discount.

Example:

A dealer of home appliances was offered a television set with a list price of P15, 375 less 10% les 15%. What is the net price?

Solution 1:

Discount Rate Method

Given:

LP = P15,375

d1= 10%

d2=15%

NP=?

D1=LP x d1

D1= 15,375 x 0.10 = P1537.50

NP1 =LP –D1

NP1=15,375 – 1537.50=P13,837.50

D2=NP1 x d2

D2 =13.837.5 x 0.15 = P2,075.62

NP=NP1 –D1

NP=13,837.5-2,075.62

NP=P11,761.88
Solution2:

Net Price Rate Method

NP=LP(100-d1)(100-d2)

100 x 100

NP = 15,375 (100-10)(100-15)

100 x 100

NP= 15,375 (0.90) (0.85)

NP=P11,761.88

Exercises:

1. The list price of a furniture set is P13, 500. Find the net price if the trade discount rates are 20 % and 15%?

2. A pair of shoes with a tag price of P2,580 was bought a net price of P2,010 with a first discount of 5%. What was the
second discount rate?

CASH DISCOUNT

are being offered to wholesalers or retailers to induce them to pay their purchases in cash. A cash discount should not
be confused with a trade discount. The former is a reduction in the selling price or invoice price upon payment on a specified
period of time while the latter is a reduction from the list price. The cash discount rates offered are written on the invoice like ,
“5/10, n/30 which means that a cash discount of 5% will be given if within 10 days the invoice will be paid. The ‘n/30means
that after 10days, no discount is given and that the invoice price will be paid not later than 30days of invoice date.

Example: An invoice with a list price of P182,000 dated May 5, has trade discounts of 15% and 10% and the terms are 4/10,
2/30, n/60. How much must be paid if the invoice is settled on (a) May 15, (b) June 4?

Solution: a. If the amount is settled on May 15

Given:

LP=P182,000

d1=15%

d2=10%

(100-d1)=85%

(100-d2)=90%

Cash discount: 4/10, 2/30, n/60

Trade Discount:

NP=LP(0.85)(0.90)

NP=182,000(.085)(0.90)

NP=P13,230

Cash Discount:

a. Maybe 5-May 15 is 10days , hence

Cash discount rate = 4%

Dc=NP(Cash Discount Rate)

Dc=139,230(0.04)

Dc=p5,569.20

Net Invoice Price:

NIP=NP-Dc

NIP=139,230-5,569.20

NIP=P133,750.80

b. If the amount is settled on June 4

May 5-June 4 is 30 days, hence

Cash discount rate =2%

Dc=NP(Cash Discount Rate)

Dc = 139,230-2,784.60

NIP=136,445.40

Exercises:

1. An invoice dated June 27 for P20,850 carried a cash discount of 5/30. If this invoice is paid on July 25, how much
should be the payment?

2. The invoice dated March 25 carried a list price of P587,950 with trade discounts of 12% and terms of 8/10,5/10 and
n/60. How much would be the payment if it is made on April 20?