Table Of Content

Master Math: Business and Personal Finance Math Mary Hansen Course Technology PTR A part of Cengage Learning Australia (cid:129) Brazil (cid:129) Japan (cid:129) Korea (cid:129) Mexico (cid:129) Singapore (cid:129) Spain (cid:129) United Kingdom (cid:129) United States Master Math: Business and © 2012 Course Technology, a part of Cengage Learning. Personal Finance Math ALL RIGHTS RESERVED. No part of this work covered by the Mary Hansen copyright herein may be reproduced, transmitted, stored, or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, Publisher and General Manager, digitizing, taping, Web distribution, information networks, or Course Technology PTR: information storage and retrieval systems, except as permitted Stacy L. Hiquet under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher. 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Project Editor and Copy Editor: Kim Benbow Library of Congress Control Number: 2011922401 ISBN-13: 978-1-4354-5788-1 Technical Reviewer: David Lawrence ISBN-10: 1-4354-5788-9 eISBN-10: 1-4354-5789-7 Interior Layout Tech: Course Technology, a part of Cengage Learning Judy Littlefield 20 Channel Center Street Boston, MA 02210 Cover Designer: Mike Tanamachi USA Indexer: Larry Sweazy Cengage Learning is a leading provider of customized learning solutions with office locations around the globe, Proofreader: Sue Boshers including Singapore, the United Kingdom, Australia, Mexico, Brazil, and Japan. Locate your local office at: international.cengage.com/region. Cengage Learning products are represented in Canada by Nelson Education, Ltd. For your lifelong learning solutions, visit courseptr.com. Visit our corporate website at cengage.com. Printed by RR Donnelley. Crawfordsville, IN. 1st Ptg. 04/2011 Printed in the United States of America 1 2 3 4 5 6 7 13 12 11 To my children— It is my prayer that you will always embrace learning and cultivate a love of mathematics. Notice to the Reader: Publisher does not warrant or guarantee any of the products described herein or perform any independent analysis in connection with any of the product information contained herein. Publisher does not assume, and expressly disclaims, any obligation to obtain and include information other than that provided to it by the manufacturer. The reader is expressly warned to consider and adopt all safety precautions that might be indicated by the activities described herein and to avoid all potential hazards. By following the instructions contained herein, the reader willingly assumes all risks in connection with such instructions. The reader is notified that this text is an educational tool, not a practice book. Since the law is in constant change, no rule or statement of law in this book should be relied upon for any service to any client. The reader should always refer to standard legal sources for the current rule or law. If legal advice or other expert assistance is required, the services of the appropriate professional should be sought. The publisher makes no representations or warranties of any kind, including but not limited to, the warranties of fitness for particular purpose or merchantability, nor are any such representations implied with respect to the material set forth herein, and the publisher takes no responsibility with respect to such material. The publisher shall not be liable for any special, consequential, or exemplary damages resulting, in whole or part, from the readers’ use of, or reliance upon, this material. Acknowledgments It is with great thankfulness that I reflect on the many people who have supported and encouraged me both in mathematics and in this project. Thank you, Mr. Mayer, for opening my eyes in junior high school to the usefulness of mathematics in solving real problems in the real world. I am grateful for my Dad and Mom for encouraging me, especially to you, Dad, for sharing with me your talent for math and reasoning. I am grateful to my high school geometry teacher, Mrs. Benson, and my college advisor and mathematics professor, William Trench, who taught many of my mathematics classes and also allowed me to work on his life’s contribution to mathematics. Both challenged me to stretch myself and learn more. I never outgrew a childhood dream to be a teacher, and I am so thankful that in my teaching jobs I was encouraged by many to explore new ways to teach mathematics. Specifically, I appreciate my college education professor, David Molina; my mentor teacher, Laurie Bergner; and prin - cipals, Chula Boyle and Joanne Brookshire, who supported my dream that all students can learn mathematics. I am thankful for Eve Lewis and Enid Nagel from South-Western Publishing who believed in my writing and teaching abilities and chose me, an unpublished writer, to be on the authorship team of the South- Western Algebra, Geometry, and Algebra 2 series, beginning my journey in the world of educational publishing. Thank you Emi Smith and Kim Benbow for your work on this project and your patience as we sorted out various obstacles. Finally, I would be remiss if I did not thank my wonderful husband, who has supported me and believed in me through all the years and different projects. You have been loving and patient. You have always encouraged me to do my best and take the next step. Thank you, my love. About the Author Mary Hansenhas taught K-12 and post-secondary mathematics and special education in three states. She has travelled the United States extensively, doing teacher workshops on effective teaching strategies and effective mathematics teaching with two different educational consulting firms. Hansen received a Master of Arts in teaching and a bachelor’s degree in mathematics from Trinity University in San Antonio, Texas. She is the author of Business Mathematics, 17th Editionand the co-author of South-Western Algebra 1: An Integrated Approach, South-Western Geometry: An Integrated Approach, and South-Western Algebra 2: An Integrated Approach(all from South-Western Publishing). Table of Contents Acknowledgments v About the Author vi Introduction xiii Chapter 1: Math Review 1 1.1 Fractions 2 Equivalent Fractions 2 Adding and Subtracting Fractions 5 Multiplying and Dividing Fractions 7 1.2 Decimals 10 Rounding 10 Operations with Decimals 11 Fractions and Decimals 14 1.3 Percents 16 Fractions, Decimals, and Percents 16 Operations with Percents 19 1.4 Formulas 20 Exponents 21 Order of Operations 21 Chapter 2: Gross Pay 2.1 Hourly Pay 23 Overtime Wages 24 2.2 Salary 26 2.3 Commission 27 Commission Based on Quota 28 Graduated Commission 30 Rate of Commission 31 vii viii Master Math: Business and Personal Finance Math 2.4 Other Wage Plans 32 Piece-Rate Pay 32 Per Diem Pay 32 Tip Pay 33 2.5 Average Pay 34 Averages 34 Average as a Goal 36 Chapter 3: Net Pay 3.1 Deductions from Pay 40 Federal Withholding 40 Social Security and Medicare Tax 41 Net Pay 43 3.2 Federal Income Taxes 44 Adjusted Gross Income and Taxable Income 44 Income Tax Due 45 Amount Due or Refund 46 3.3 State and City Income Taxes 47 Flat Income Taxes 47 Progressive Income Taxes 48 3.4 Employee Benefits and Expenses 49 Total Job Benefits 49 Net Job Benefits 50 3.5 Take Home Pay 51 Raises 52 Pre-Tax Deductions 54 Chapter 4: Banking 4.1 Savings Accounts 57 Simple Interest 58 Compound Interest 59 Annual Percentage Yield 64 4.2 Money Market and CD Accounts 66 4.3 Annuities 68 Future Value of an Ordinary Annuity 69 Present Value of an Ordinary Annuity 70 Table of Contents ix 4.4 Checking Accounts 72 Deposits 72 Check Register 74 Reconciliation 75 Chapter 5: Credit Cards 5.1 Credit Card Disclosures 79 5.2 Finance Charges 82 Previous Balance Method 84 Adjusted Balance Method 85 Average Daily Balance Method 86 5.3 Cash Advances 89 5.4 Debt Management 91 Minimum Credit Card Payments 91 Assessing Debt 95 Chapter 6: Loans 6.1 Promissory Notes 97 Exact and Ordinary Interest Methods 99 Daily Interest Factor 100 6.2 Installment Loans 101 Merchant Installment Plans 101 Bank Installment Loans 103 6.3 Annual Percentage Rate 105 6.4 Early Loan Repayments 107 Chapter 7: Auto and Home Ownership 7.1 Mortgages 112 Qualifying for a Mortgage 112 Down Payment and Closing Costs 113 Monthly Payments and Interest 115 Refinancing 116 7.2 Property Taxes 118 7.3 Property Insurance 120 Making an Insurance Claim 121