Abstract:
This guide covers foundational topics of business and financial mathematics usually discussed in a typical one semester course offered by business schools of Canadian Colleges of Applied Arts and Technology. The guide is suitable for diploma or degree-level courses.
The guide covers the following topics: Percent and percent change, compound percent, simple and compound interest, annuities and perpetuities, loan amortization and mortgages, fixed income instruments, NPV, sequences of discounts, exchange rates, invoices, price structure, break-even analysis.
The topics are explained by means of numerous examples. There are also end-of-chapter exercises with full solutions.
The academic philosophy of the guide is based on five pillars:
1. Briefness. The focus is only on the essential information.
2. Algebraic method. The priority is given to algebraic problem solving. However, essential calculator and Excel techniques are also discussed in the guide.
3. Logical flow. One topic sets the foundation for another topic. Careful reading without skipping is necessary.
4. Examples. Topics are explained using many carefully selected examples. There are also end-of-chapter exercises with full solutions.
5. No memorization. If used properly, the guide must lead to the level of understanding allowing to solve problems without having to remember many formulas and without using a formula sheet.
The guide consists of four sections:
1. Foundations (Chapters 0-2). These chapters are highly recommended to work on regardless of the level of prior preparation.
2. Mathematics of Finance (Chapters 3-12). Chapters 1-9 must be studied in sequence without skipping any information. Each chapter in this sequence sets the foundation for the next chapter. Chapters 10-12 can be studied in any order, but only after Chapters 1-9 have been fully understood.
3. Mathematics of Business (Chapters 13-17). These chapters can be studied in any order, but only after Chapters 0-2 have been fully understood.
4. Solutions to the end of chapter exercises. Solutions are provided for every end-of-chapter problem.
