Handout – 01

Programme : Bachelor of Commerce (Special) Degree

First Examination in Commerce – 2010/2011
1st Semester
Course Title: Mathematics for Business
Course Code : BCOM 11134
Course Status : Compulsory
Handout Title : Essential Skills of Mathematics
Prepared By : B.Prahalathan, Dept.of Commerce & Financial
Management
Issue Date : 9th December 2010

Learning Objectives:

 indentify different number system

 study different mathematical operations
 understand integer, fractional, and mixed numbers
 differentiate standard form or scientific form
 do operations with numbers in scientific notation
 understand powers and indices and study their rules

Introduction
This handout is a review of the basic arithmetic concepts. It forms the basis
for understanding and working with relations (formulas) encountered in
business and economics.

Number Systems
− The decimal (base 10) number system uses the digits (numbers) 0, 1,
2, 3, 4, 5, 6, 7, 8, and 9. This is the number system we use in our
everyday arithmetic calculations such as the monetary transactions.

− Another number system is the binary (base 2) that uses the digits 0
and 1 only. The binary system is used in computers and it is being
taught in electronics courses.

Natural numbers and Integers

The counting numbers are collectively known as the natural numbers. The
natural numbers, their negatives, and the number zero are collectively
known as the integers.

Positive and Negative Numbers

− A positive number is a number greater than zero and it is understood
to have a plus (+) sign in front of it. The (+) sign in front of a positive
number is generally omitted. Thus, any number without a sign in
front of it is understood to be a positive number.

pg. 1
 − A negative number is less than zero and it is written with a minus (–)
sign in front of it. The minus (-) sign in front of a negative number is a
must; otherwise it would not be possible to distinguish the negative
from the positive numbers.
Example
Dias’s checking account shows a balance of Rs.534.29. Thus, we can say that his balance
is +534.39 rupees but we normally omit the plus (+) sign, and we say that his balance is
534.39 rupees.
Addition and Subtraction
The following rules apply for the addition of numbers

− Rule 1:
To add numbers with the same sign, we add the absolute
values of these numbers and place the common sign (+ or –)
in front of the result (sum). We can omit the plus sign in the
result if it is positive. We must not omit the minus sign if the
result is negative.

i. Example : 7 + 16 + 0.5
ii. Example : (–6) + (–45)
iii. Example : (–1.25) + (–0.75) + (-3)

Consider the subtraction of number B from number A, that is, A–B.

The number A is called the minuend and the number B is called the
subtrahend. The result of the subtraction is called the difference.

iv. Draw a rough sketch to indicate the minuend, subtrahend, and

difference for
the subtraction operation of 735 – 592.

− Rule 2:
To add two numbers with different signs, we subtract the
number with the smaller absolute value from the number with
the larger absolute value, and we place the sign of the larger
number in front of the result (sum).

i. Example : 37 + (–15)
ii. Example : (–16) + 7

− Rule 3:
To subtract one number (the subtrahend) from another
number (the minuend) we change the sign (we replace + with
– or – with +) of the subtrahend, and we perform addition
instead of subtraction.

i. Example : 39 – 25
ii. Example : 53 – (–18)
iii. Example : (–86) – 37
iv. Example : (–75) – (–125)

pg. 2
 In general, let “a” be any number; then, the following relations apply for
the possible combinations of addition and subtraction of positive and
negative numbers.

+ (+a) =+a = a
+ (-a) = – a
– (+a) = –a
– (-a) = a

Summary of rules of additions and subtraction

If a and b are any two numbers, then we have the following rules

i. a + (- b) =a–b
ii. a – (+b) =a–b
iii. a – (- b) =a+b

Multiplication and Division

Multiplication is repeated addition, for instance, 5 x 3 = 5 + 5 + 5 = 15.
One of the two numbers involved in multiplication is the multiplier, and the
other is the multiplicand.

− Multiplier
The dictionary defines multiplier the number by which another
number is multiplied.

− Multiplicand
The multiplicand is defined as the number that is or is to be multiplied by
another. Thus, in 5 x 3, the multiplier is 5 and the multiplicand is 3. The
result of the multiplication is called the product. The following rules apply
for multiplication and division of numbers:

− Rule 1:
When two numbers with the same sign are multiplied, the product
will be positive (+). If the numbers have different signs, the
product will be negative (–).

i. Example : 39 x 25
ii. Example : 53 x (–18)
iii. Example : (–86) x 37
iv. Example : (–75) x (–125)

Summary of rules of Multiplication

If a and b are any two numbers, then we have the following rules

pg. 3
 i. a x (-b) = - (a x b)
ii. (-a) x b = - (a x b)
iii. (-a) x (-b) = a x b

So multiplication of two numbers of the same sign gives a positive

number, while multiplication of two numbers of different signs
gives a negative number.

Division
In division, the number that is to be divided by another is called the dividend. For
27
instance, the number is a rational number and the dividend is 27. The
3
dividend is also referred to as the numerator. The number, by which the dividend
is to be divided, is called the divisor. For instance, in the division operation above,
the divisor is 3. The divisor is also called the denominator. The number obtained
27
by dividing one quantity by another is the quotient. Thus, in = 9, the quotient
3
is 9.

− Rule 2:
When two numbers with the same sign are divided, the quotient
will be positive (+). If the numbers have different signs, the
quotient will be negative (–).

125
i. Example :
5
−750
ii. Example :
10
1500
iii. Example :
- 75
- 450
iv.Example :
- 15

Summary of rules of Division

If a and b are any two numbers, then we have the following rules
a
i. =c
b
-a
ii. =-c
b
a
iii. =-c
-b
-a
iv. = c
-b

Integer, Fractional, and Mixed Numbers

Decimal point

pg. 4
A decimal point is the dot in a number that is written in decimal form. For
instance, the number 5.3 is written in decimal form, and the dot between 5 and 3
is referred to as the decimal point. Every number has a decimal point although it
may not be shown.
A number is classified as an integer, fractional or mixed depending on the position
of the decimal point in that number.

− Integer
An integer number is a whole number and it is understood that its decimal
point is positioned after the last digit (rightmost) although not shown. For
instance,
8 = 8.
-405 = -405.
3245 = 3245.

− Fractional numbers
A fractional number, positive or negative, is always a number less than one.
3
It can be expressed in a rational form such as or in decimal point form
4
such as 0.75. When written in decimal point form, the decimal point
appears in front of the first (leftmost) digit. For instance,
1 −1
= .5 = 0.5 = -.25 = - 0.25
2 4
1 −1
Where and are fractional numbers expressed in rational form, and
2 4
0.5 and – 0.25 are fractional numbers expressed in decimal point form.

− Mixed numbers
A mixed number consists of an integer and a fractional number. For
instance, the number 409.0875 consists of the integer part 409 and the
fractional part 0.0875as shown below.
409.0875 = 409. + 0.0875

Fractional

Integer

Mixed

− Rule 1:
Any number (integer, fractional or mixed) may be written in a
rational form where the numerator (dividend) is the number itself
and the denominator (divisor) is 1.
22
For instance, the numbers 13, 385, 2.75, and may be written as 13 =
7
22
13 385 2.75
, 385 = , and 7 .
1 1 1
1

pg. 5
Reciprocals of Numbers
The reciprocal of an integer number is a fraction with numerator 1 and
denominator that number itself. Alternately, since any number can be considered
as a fraction with denominator 1, the reciprocal of a fraction is another fraction
with the numerator and denominator reversed. Consequently, the product
(multiplication) of any number by its reciprocal is 1.

Find the reciprocals of

i.3
1
ii.
4
iii.– 3.875
−1
iv.
2

When either the sign of the numerator or the denominator (but not both) is
negative, it is customary to place the minus sign in front of the bar that separates
them. For instance,

−5 5
i. =-
8 8
4 4
ii. =-
−11 11

We must not forget that when the sign of both the numerator and denominator is
minus, the result is a positive number in accordance with Rule.

− Rule 1:
A rational number in which the numerator and denominator are the
same number is always equal to 1 with the proper sign.

For instance,
7
i. =1
7
−12 12
ii. =- =-1
12 12

Rule 2:
As a consequence of Rule 2, the value of a rational number is not
changed if both numerator and denominator are multiplied by the same
number.

Decimal Representation of Numbers

A fraction or rational number may be converted to its equivalent decimal
representation by dividing the numerator by the denominator.

− Terminating decimal

pg. 6
 A decimal that ends is a terminating decimal. In other words, a terminating
decimal doesn’t keep going. A terminating decimal will have a finite number
of digits after the decimal point.
Example: The following are examples of rational numbers that have a
terminating decimal representation:
1 2 5
= 0.125, = 0.12, = 1.25
8 25 4

− Recurring decimal
A decimal number that has digits that repeats forever.
Example: The following are examples of rational numbers that have a
recurring decimal representation:

1/3 = 0.333…
77/600 = 0.128333…

To convert a decimal to a fraction, you simply have to remember that the

first digit after the decimal point is a tenth, the second a hundredth, and
so on.
For example,
2 1
0.2 = = and
10 5
65 13
0.65= =
100 20
375 3
0.375 = =
1,000 8

Sometimes we are asked to express a number correct to a certain number of

decimal places or a certain number of significant figures.
− Suppose that we wish to write the number 23.541638 correct to two
decimal places. To do this, we truncate the part of the number following the
second digit after the decimal point:
23.54 | 1638
Then, since the first neglected digit, 1 in this case, lies between 0 and 4,
then the truncated number, 23.54, is the required answer.
− If we wish to write the same number correct to three decimal places, the
truncated number is
23.541 | 638, and since the first neglected digit, 6 in this case, lies between
5 and 9, then the last digit in the truncated number is rounded up by 1.
Therefore, the number 23.541638 is 23.542 correct to three decimal places
or, for short, ‘to three decimal places’.

Standard Form or Scientific Form

Consider the following two examples:

− The distance of the Earth from the Sun is approximately 149,500,000 km.

pg. 7
 − The mass of an electron is 0.000000000000000000000000000911 g.

Numbers such as these are displayed on a calculator in standard or scientific

form. This is a shorthand means of expressing very large or very small numbers.

The standard form of a number expresses it in terms of a number lying between 1

and 10 multiplied by 10 raised to some power or exponent. More precisely, the
standard form of a number is,

a × 10b

Where 1 ≤ a < 10, and b is an integer. A practical reason for the use of the
standard form is that it allows calculators and computers to display more
significant figures than would otherwise be possible.
For example,

i. The standard form of 0.000713 is 7.13×10−4

ii. The standard form of 459.32 is 4.5932 × 102.

The power gives the number of decimal places the decimal point needs to be
moved to the right in the case of a positive power or the number of decimal places
the decimal point needs to be moved to the left in the case of a negative power.

For example

i. 5.914 × 103 = 5914 and

ii. 6.23 × 10−4 = 0.000623.

Returning to the above examples,

i. The Earth is about 1.495 × 108 km from the Sun.
ii. The mass of an electron is 9.11 × 10−28 g.
iii. Similarly, a budget deficit of 257,000,000,000 is 2.57 × 1011 in standard
form.

Operations with Numbers in Scientific Notation

Multiplication and division of very large or very small numbers is simplified
with application of the following rule:
• To multiply two numbers, we perform the following steps:
1. Write the numbers in scientific notation
2. Multiply the parts of the numbers without the 10s and their exponents
3. Multiply the product of Step 2 above by 10 with the exponent obtained by
the sum of the exponents of the numbers

Example: 1
Multiply 4,000,000 by 23,000,000,000

pg. 8
 Solution:

Example: 2
Multiply 0.00029 by 0.000003
Solution:

• To divide two numbers, we perform the following steps:

1. Write the numbers in scientific notation
2. Divide the parts of the numbers without the 10s and their exponents
3. Multiply the product of Step 2 above by 10 rose to the power obtained by
subtracting the exponent of the divisor from the exponent of the dividend.

Example: 1
Divide 45,000,000 by 1,500,000
Solution

Percentages
To convert a fraction to a percentage, we multiply the fraction by 100%.

For example

3 3
i. = x 100% = 75%
4 4

3 3
ii. = x 100% = 23.077%(to the three decimal places)
13 13

To perform the reverse operation and convert a percentage to a fraction, we

divide the number by 100. The resulting fraction may then be simplified to obtain
a reduced fraction.

For example,

45 9
45% = =
100 20

Where the fraction has been simplified by dividing the numerator and
denominator by 5 since this is a common factor of 45 and 100.

pg. 9
 • To find the percentage of a quantity, we multiply the quantity by the
number and divide by 100.

For example:
25
i. 25% of 140 is x 140 = 35
100
4
ii. 4% of 5, 200 is x 5200 = 208
100

• If a quantity is increased by a percentage, then that percentage of the

quantity is added to the original. Suppose that an investment of Rs.300
increases in value by 20%. In monetary terms, the investment increases by
20
x 300 = Rs.60 and the new value of the investment is
100
Rs.300 + Rs.60 = Rs.360.

• In general, if the percentage increase is r%, then the new value of the
investment comprises the original and the increase. The new value can be
r
found by multiplying the original value by the factor 1 + .
100
• It is easy to work in the reverse direction and determine the original value if
the new value and percentage increase is known. In this case, one simply
r
divides by the factor 1 + .
100
Example
The cost of a refrigerator is Rs.350.15 including sales tax at 17.5%. What is the
price of the refrigerator without sales tax?

• Similarly, if a quantity decreases by a certain percentage, then that

percentage of the original quantity is subtracted from the original to obtain
its new value. The new value may be determined by multiplying the original
r
value by the quantity 1 - .
100

Example
A person’s income is Rs.25, 000 of which Rs.20, 000 is taxable. If the rate of
income tax is 22%, calculate the person’s net income.

• Most often, we are interested in changes of percentages. For instance, to

find the percent change between an old and a new value, we use the
formula

(New Value - Old Value)

% Change = x100
Old Value

Example

pg. 10
Joe Smith bought common stock of ABC Corporation at Rs.15.00 per share. Three
months later he sold his stock at Rs.21.50 per share. What was his profit
expressed in percent?

Powers and Indices

Let x be a number and n be a positive integer, then xn denotes x multiplied by
itself n times. Here x is known as the base and n is the power or index or
exponent.
Example

X5 = X x X x X x X x X

The following rules governing indices or powers

i. a m xa n = a m + n vi. ( ab ) m = a mb m
am a 
n
a n
ii. n
= a m−n vii.   = n (b ≠ 0 )
a b  b

iii. (a )m n
= a mn
viii.
1
= a −m
am
1
iv. m
a =a m
ix. a 0 =1
n
v. m
a =a
n m x. a1 = a

pg. 11