Mathematic and decision Making

Decision shape our lives, Mathematics rationalizes the shifting of

information and the balancing of alternatives inherent in any decision.

Mathematical models underline computer programs that support

decision making, while bringing order and understanding to the over

whelming flow of data computers produce, Mathematics serves to

evaluate and improve the quality of information in the face of uncertainly

to present and clarity option, to model available alternatives and their

consequences and even to control the smaller decisions necessary to

reach a larger goal . Mathematics areas like statistics optimization,

probability queuing theory, control, game theory, modeling and

operations research. A filed devoted entirely to the application of

mathematics in decision making are essential for making difficult choices

in public policy, health, business manufacturing finance, law and many

other human endeavors.

Mathematics is at the heart of a multitude of decisions, including those

that generate electric power economically, make a profit in financial

markets, approve effective new drugs, weigh legal evidence, fly aircraft

safely manage complex construction projects and chose new business

strategies.
 Number System

A number is a mathematical object used a count measure and level.

There are many types of numbers and these are natural number (N)

Prime number, real number, even and odd number, finite and non finite,

fraction, complex number, imaginary number.

All the number play a important rules in Business conducting:-

Natural Number is used to count without counting we can not

conduct a business. It there is no number we can not change the

value with one another.

Number system is use to codes and data’s.

In Computer to calculate binary numbers are used.

Arithmetic Progression:

An arithmetic progression is a sequence whose terms or decrease lay a

constant number called the common difference.

The sequence <1,7,13,19,25,31,...........> is an infinite arithmetic

progression, here common difference is 6.

So the series, (1+7+13+19+25+31+........) is called arithmetic progression.

* The importance of Arithmetic Program in Business:-

i. If we want to have a affluent life, and one in which we do not waste

money. We use Arithmetic all the time. Every time we go to

grocery store, we should be calculating which item of the several

offered is best buy.

ii. Arithmetic is the helping hand on all occasion with or without our

consciousness . We start the day counting from the time wake up.

The number of spoons of sugar we require for the morning tea, the

time at which we should start work till we end our work

dependents on the time which is measured through Arithmetic. Our

Arithmetic.

iii. The modern science and its achievement has a great contribution

from Arithmetic, we cannot analyze light, electricity which was

mathematics which is its paternity in Arithmetic only.

iv. Besides this we can use in other activities.

Like:

a) Finding out time by looking at our watches.

b) Fiscal year and month in counted through Arithmetic

Process.

c) Comparing prices of shirts we want to buy.

Arithmetic is more important in every day life than we usual realize

decide form being able to balance our check book and calculate the

amount of exchange which is contract when we buy something in the

store as someone point out above we need to be able to calculate

countless daily activities in order to understand them.

A Geometric progression is a sequence whose term increase or decrees

lay a contract ratio called the common ratio.

The sequence <3, 12, 48, 192, 768, ....> is an infinite Geometric

progression whose first term is 3 and the common ratio is 4.

So the series with this form (3+12+48+192+768+......) is called Geometric

progression.

a+ar+ar2+ar3+ar4+...........+arn-1+..........is the standard from Geometric

Series.

The use of Geometric progression in business :

i. Find the future value and the present value of an Annuity:-

Understand Annuity is very crucial for understanding loans

and investment that require for yield periodic payments

for instance. The future value of an annuity is simply the

sum of the future value of each payment. The equation for

the future value of an annuity due is the sum of the

Geometric sequence:
 FVAD : A (1+r) of A (1+R). 1+(1+R) 2+ A (1+R) n-1+A (1+R) N

Here :

A = Annuity payment or periodic rent

R = The interest rate per time

It is used in annuities working out monthly repayments of

loans and values of investment compound interest is a Geometric

Progression.

ii. Our population increase in a Geometrical sequence. It

gives us a clear concept how our population grows and

how we have to use our resources.

To start a business financing is the first needed elements. After

starting business to get profit and to maximize the fund. Entrepreneur

has to invest his capital with a interest rate. to count his interest

mathematic of finance must be used if an Entrepreneur do not know

about the mathematics of finance we will not properly calculate his

interest and maximize his capital in a proper way to solve this he was to

learn mathematics of finance properly normally in the bank and financial

organization, Mathematics of finance is essential to evaluate the interest

and the investment and the debt.

Mathematic of finance is concerned with interest rates and their

effect on the value f money interest rates have widespread influence over

decision made by business and our personal lives normally, we earn

money on sum. Then we have invested in saving account, deposit and

money market funds. Mathematics of finance focuses on financial

decision making within the firm and the firms interest with the financial
market and institution. Bank discount helps to know capital budgeting,

interest rate of return, interest and discount terms and policy financial

charge and average daily balance the formula we know to count bank

discount and the future value and the capital this formula is,

p=F (1-dn)

Effective interest rate is the true rate of interest earned to raise

capital, we will have to decide how much money to invest.

On the other hand entrepreneur must have knowledge about the

simple and compound interest rate which is counted annually, monthly,

semi annually, quarterly to cunt simple interest this formula are used,

F=pin

To count compound interest rate this formula is used,

F=P (1+i) n

Mathematics of finance enables to develop the mathematics skills

and needed to better understand and solve the financial problem that

arise in business.
Why are needed mathematic of finance knowledge in business:

Calculate the effects of inflation an saving and investments

Analyze how interest rate and length loan affect payment

Calculate how principle and interest and allocated in a monthly

payment

Calculate the total interest and total cost paid over the life of a loan

Indentify strategies for investing and compare various sources of

short time and long time investment.

Calculate how long it takes to repay short and long time debt.

Calculate and understand concept of the time value of money

(Example: simple and compound interest rate)

Analyze the relationship between the risk and return

Analyze and decide which sector is appropriate to investment

Analyze the power of compound interest and the importance of

starting early in implementing ad financial plan for retirement.

Calculate and compare the risk, return, liquidity, and cost for saving

investment and dividend yield.

Discuss and analyze financial resources needed for specific

retirement activities.
 Equation : Linear, Quadratic

Importance of basic mathematics in Business:

Business ownership requires more than skill in creating a product or

talent of providing a services. Overacting the finances of our company is

key to survival and success. Understanding basic business math is

necessary for profitable operation and accurate record keeping knowing

how to add, subtract multiply, divide, round and use percentages and

fractions is the minimum you need to price or product and meet or

budget. If math is not or strength, partners with some one who can take

over that rate or hire a trusted employees to help or operation stay in the

black and grow responsibility.

How are linear equations used in Business :

Linear equation are about the use of know quantities to discover

unknown qualities. Business is about the exchanges of money and unit of

money is measured as a quantity. The money is exchanged for other

equalities for hours of works for tons of raw materials or for the volts of

electrics may constitute the overhead costs of a city manufacturing plan.

Linear equation use one more variables where are variable is

dependent on the other while most students learn about their equation

in a classroom, they can be applied outside school in the real world.

Almost any situation where there is an unknown quantity can be

represented by a linear equation, Linear equations can be used to

represent variable costs, rates, budget entries and numerical predication.

How are linear equation used in simple sample

Liner equation help in planning and decision making. A clearing

contractor has two employees A and B who are available to clean a

particular office building. From pair experience, their manager knows that

A can clean this complex in 5 Hours. Also A and B working simultaneously

3.5 hours.

The linear equation that would come in handy here is,

1/5 (3.5) + 1/t (3.5) = 1.

Multiplying both side by 5ft yields : 3.5t+ (3.5) (5)=5t working that

through yields a t of 11.67 hours.

Quadratic Equation

Quadratic equation are used is science, business & Engineering. Quadratic

function help forecast business profit and & loss plot the source of

moving object & determining minimum & maximum values most of the

object we use everyday, from cars to clock could not exist in someone,

somewhere could not applied quadratic functions to their design, We

commonly used quadratic equation in situations where two things are

multiplied together and they both depends on the some variable. For

example when working with area if both dimension are written in terms

of the same variable we use quadratic because the quantity of a product

sold often depends we sometimes use a quadratic equation to represent

gravity is involved such as path of the ball of shape of cables in a

suspension bridge. It also sometime used to model situation &

relationship in business science and medicine. Common use in business

to maximize to profit different between the best revenue and cost.

Quadratic equation impact on business:

Problem : Determine the selling price which produces the maximum

yearly profits

q = - 20s + 1200

q = quantity sold

s = selling price of the item

Plot on the horizontal axis and q on the vertical line of the plot to find the
slope of the line to be -20 read the Y intercept as 1200 put this values into
slope intercept form (y=mx+b)

q= -20s+1200
p=sq -10 q

profit formula : p=total revenue - production cost

Total revenue = price x quantity sold

production cost= Cost per item x quantity sold

so, P= sq-10q

p= s (-20s +1200) – 10 (-20s + 1200)

Substitute – 20s + 1200 for q in profit formula

p= 20s2 + 1400 s – 1200

p= 20s2 + 1400 s – 1200

multiply the expression & combine like term we now have a quadratic
function.

By finding the vertex of parabola, we will find the selling price we will
generate the most profit the x-axis represent selling price so the value of
the x coordinate at the vertex represent the best price.

The y value at the vertex will give the amount of profit made.

S= 1400/ 2(-20) = 1400 / -40 = 35

Find the x coordinate of the vertex by applying the formula x= b/2a. In

Set theories play an important rule in modern mathematics as well

as business. The sets are much wider application, especially they help in

preparing the program for feeding into the machine. In almost whole of

the business mathematics the set theories is applied in one from or the

other.

A set is collection of well defined and well distinguished object from

a set it is possible to tell whether a given object belongs to a set or not.

The basic characteristics of a set is that it should be well defined, Its

object on elements should be well distinguished for easy recognition by

description.

Elements of a set :

The object that make up a set are called the members or elements f

the set it is almost a convention to indicate sets by capital letters like,

A,B,C or X,Y,Z while the elements in the set by smaller or lower letters like

a,b,c, or x,z,e.
 Now to indicate that a particular elements or object belong a set or

a member of the set we use. The Greek symbol capital epsilon for

example if n is the members of a set A, We can write N E A, I,e N is a

member or an elements of the set A.

The use of set theories

Set theories can be applied both in real life and business we can

solve our may problem and get information or idea by using set theories

in our real life or business.

Suppose, there are some population in a specific area in

Bangladeshi some are related in business some are job and some are

related to both business and job.

Now we can find out the number of people who are related only

business and only job and number of unemployed by using set theories.

The use of set in business

families don’t use mobile in a specific village an area and want to

motivate them to use mobile. By using set theory they can find it easily.
 Suppose There are 300 similes in a village out of them so families

use Nokia, 70 families use SAMSUNG, 50 families use Walton of the total

40 families use both Nokia Samsung, 30 families use both Nokia &

Walton and 35 families use both Walton & Samsung and 45 familes use

all the there mobile.

Solution
Given That

n (F) = 300
n (N) = 80
n (s) = 70
n (w) = 50
n (N n S ) = 40
n (N n W ) = 30
n (W n S ) = 35
n (S n N n w ) = 45
(S u N u w )’ = ?
(S u N u w ) = n (s) + n (N) + n (W)-n (N n S) - n (N n W) -n (S n
W) + n (S n N n W)
= 70+80+50-40-30-35+45
= 140
(S u N u w )’ = n (F)-n (S u N u w )
= 300-140
= 160 Ans.
 Logarithm

Logarithm is used everywhere logarithm is mainly used to find

 Interest rate

 Measurement of scale

Interest Rate

An interest rates in the logarithm of the growth in an investment of we

want to calculate the GDPA of our country we have to take the logarithm

to find the implicate growth rate.

An medical science of medicine business logarithm is used to find the

bacteria growth rate.

Measurement of Scale

Logarithm put numbers on a human friendly scale we can calculate

all the thing related to business early large number breaks our brain

milion and trillions are ready big even through a million records is 12

days and a trillion records is 30,000 years.

The trick of over come huge number blindness is to write number

interim inputs example.

gram.

 Power of 0 = 100 = 1 Single item

 Power of 1 = 10’ = 10

 Power of 3 = 103 = 1000 Thousand or

We have to calculate these 10x10x10=1000

 Power of 80 = 10 80 = number of molecoles in the universe

 0 to 80 scale took us from a single item to the number 08 things in

the universe not to though it you want to measure the unit of earth

quark we can use logarithm. If we want to measure the range of

sound we can use logarithm long keep everything on a reasonable

scale.

Except This

We can use logs in order to magnitude and solve mathematics without

calculator

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