SOUTHEAST UNIVERSITY

Assignment

Course title: Business Mathematics

Course Code: BUS121

Submitted By:
S M Foysal – 2023010000079
Nasrin Akter Rumi - 2023010000080
Zednee Binte Ahsan Oishi – 2023010000070
Forhad Ahmed – 2023010000086
MD Abu Ahad Ratul -2023010000075
Submitted to:
Shanjida Chowdhury
Assistant Professor
Department of Southeast Business School
Southeast University

Date of Submission: 7th January, 2024

1
 Chapter: Theory of Set

Introduction
Set Theory is a branch of mathematical logic where we learn sets and their
properties. A set is a collection of objects or groups of objects. These objects are
often called elements or members of a set. Georg Cantor was a Russian-born
mathematician who can be considered as the founder of set theory. Set theory is
the mathematical theory of well-determined collections, called sets, of objects
that are called members, or elements, of the set.
Example: P = {1, 2, 3, 4, 5, 6, 7, 8, 9, 10}
Components of a set are embedded in curly brackets distributed by commas as
can be seen in the above example.
Set theory provides a foundational framework for various mathematical
structures and is essential in many areas of mathematics, including logic,
algebra, topology, and analysis. The principles of set theory are fundamental to
understanding mathematical concepts and reasoning.

Methods of Describing a Set

A set can be described in the following two ways:
(1) Tabular Method: In this method, all the elements of the set are enclosed by
set braces. For example,
(a) A set of vowels; A = {a, e, i, o, u}
(b) A set of even numbers; A = {2, 4, 6, ......}
(c) A set of first five letters of alphabet; A = {a, b, c, d, e}
(d) A set of odd numbers between 10 and 20; A = {11, 13, 15, 17, 19}

(2) Selector / Set-builder Notation Method: In this method, elements of the

set can be described on the basis of specific characteristics of the elements. For
example, let if x is the element of a set, then the above four sets can be
expressed in the following way:
(a) A = {x | x is a vowel of English alphabet}

2
(b) A = {x | x is an even number}
(c) A = {x | x is a letter of the first five alphabet in English}
(d) A = {x | x is an odd number between 10 and 20}
In this case, the vertical line “|” after x is to be read as “such that”.

Connected to Modern Business

Set theory, although a fundamental concept in mathematics, might not be
directly apparent in day-to-day business or personal life for most people.
However, it does have underlying connections and applications in various areas,
and its principles are often employed in problem-solving, decision-making, and
information organization. Here are some examples:
1. Data Management:
- In databases and data science, sets are used to represent and organize
information. Database tables can be viewed as sets of records, and set
operations such as union, intersection, and difference are applied in querying
and analyzing data.
- For example, consider a database with sets of customers, products, and
transactions. Set operations could be used to find common customers between
two regions or identify products purchased in a specific time frame.
2. Market Segmentation:
- Businesses often use set theory principles when segmenting markets. Each
segment can be seen as a set of individuals who share certain characteristics or
behaviors.
- For instance, a marketing team might define sets of customers based on age,
location, and buying preferences. The intersection of these sets could represent
a more targeted segment with specific advertising needs.
3. Project Management:
- Set theory concepts can be applied in project management to define and
organize tasks. Project components can be seen as sets, and their dependencies
can be modeled using relationships between sets.
- In a project with tasks A, B, and C, the union of tasks A and B represents all
tasks that need to be completed, while the intersection of A and B represents
common elements (dependencies) between the two tasks.

3
4. Decision Making:
- Set theory helps in structuring decision-making processes. When faced with
multiple criteria or factors, decision-makers can use sets to organize and analyze
the elements involved.
- For example, a company considering a new product launch might create sets
representing market demand, production costs, and regulatory requirements.
Decision criteria could then be defined based on the intersection or union of
these sets.
5. Risk Management:
- Sets can be applied to model and manage risks. Different sets could
represent potential risks, and their intersections might indicate situations where
multiple risks converge.
- In financial risk management, for instance, a set might represent economic
factors, another set operational factors, and their intersection could represent
areas where both economic and operational risks need to be addressed.
6. Supply Chain Optimization:
- Supply chain management involves dealing with sets of suppliers, products,
and distribution channels. Set theory can help optimize the selection and
coordination of these elements.
- An intersection of sets could represent an ideal supplier who provides a
specific product at an optimal cost, meeting both quality and delivery
requirements.

Types of sets
The various types of sets with examples are given below:
Null Set/Empty Set: Null set is a set that does not contain any element. The
cardinality of the empty set is zero. The null set or the void set is expressed by
the symbol ∅ and is read as phi. In roster form, ∅ is indicated by {}.
An empty set is said to be a finite set as the number of elements/symbols in an
empty set is finite, i.e., zero (0).
Example: P = {y: y is a leap year between 2004 and 2008}
As we can see, between 2004 and 2008, there was no leap year.
Therefore, P = ϕ.

4
Singleton Set: A set that has only one element is termed a singleton set.
Examples:
P= {y: y implies neither composite nor prime}
The given set P is a singleton set as it contains one element, i.e., one.
Q = {y: y signifies a whole number that is less than one}
The set Q set includes only one element that is zero {0} hence it is an example
of a singleton set.
Finite Set: A set that contains a finite number of elements is named a finite set.
In other words, we can say that a set that includes no element or a definite
number of elements is said to be a finite set. The empty set is also termed a
finite set.
Example: Set P = {4,5,6,7,8,9,10} is a finite set, as it has a finite number of
elements.
The set of different colors in the rainbow is also an example of a finite set.
Infinite Set: Exactly opposite to the finite set, the infinite set will have an
infinite number of elements. If a presented set is not finite, then it will be an
infinite set OR A set that has an infinite number of components is named an
infinite set.
Example:
A = {p: p is a whole number}
There are infinite whole numbers. Therefore, A is an infinite set.
C= {z: z is the ordinate of a position on a provided line}
There can be infinite points on a line. Therefore, C is an infinite set.
Subset: Consider A and B to be two sets. If each element of A is present in set
B or we can say that if the elements of set A belong to set B, Then A is
designated a subset of B and it is denoted by the notation A ⊆ B.
The symbol ‘⊆’ is applied to signify ‘is a subset of’ or ‘is included in’.

5
A ⊆ B; implies A is a subset of B in other words A is contained in B.

B ⊆ A; implies B is a subset A.
Every given set is a subset of itself.
Examples: Set A= {p, q, r, s, t, u} Set B= {m, n, o, p, q, r, s, t, u}
Then we can state A ⊆ B.
Power Set: Let A be set, then the set of all the possible subsets of A is called
the power set of A and is denoted by P (A). The number of components of the
power set is given by 2n.That is for a set A which covers n elements, the total
number of subsets that can be created is 2n. From this, we can state that P (A)
will have 2n elements.
Example:
For the set {x,y,z}:
The empty set {} is a subset of {x,y,z}
And these are subsets: {x}, {y} and {z}
And these are subsets: {x,y}, {x,z} and {y,z}
And {x,y,z} is actually a subset of {x,y,z} too.
And collectively they compose the Power Set:
P(S) = { {}, {x}, {y}, {z}, {x,y}, {x,z}, {y,z}, {x,y,z} }
Universal Set: Universal set is normally indicated by U, and all its subsets by
the letters A, B, C, etc. For example, for the set of all integers, the Universal Set

6
can be the set of rational numbers, in human population studies, the universal
set comprises all the people in the world.
Example: Consider if set A = {2,3,4}, set B = {4,5,6,7} and C = {6,7,8,9, 10}
Then, we will address the universal set as U = {2,3,4,5,6,7,8,9,10}
Note: As per the definition of the universal set, we can say that all the sets are
subsets of the universal set.
Equal Set: Any two sets are declared to be equal sets if and only if they are
equivalent and as well as their elements are identical.
Example:
Let P{1, 2, 3, 4, 5} and Q={y : y , for 0<y<6 , y ∈ natural numbers}
Writing Q in the tabular form {1, 2, 3, 4, 5}
Here, each element of P is an element of Q, i.e., P ⊆ Q.
Also, every element of Q is an element of P, i.e., Q ⊆ P.
Therefore, sets P and Q stand for equal sets.
Types of sets in math’s are important to learn not only to understand the
theories in math but to also apply them in day-to-day life as arranging objects
that belong to the alike category and keeping them in one group helps to find
things easily and look clean as well.

Set Theory Formulas

Let’s understand set A and B, the two sets.

 The number of elements which are prevalent either in set A or B has is

represented by n(AᴜB)
 n(A∩B) is the number of elements which are present in sets A and set B.

n(AᴜB) = n(A) + (n(B) – n(A∩B)

If we talk about Set A, B & C, the formula is:

n(AᴜBᴜC) = n(A) + n(B) + n(C) – n(A∩B) – n(B∩C) – n(C∩A) + n(A∩B∩C)

Sets Theory Formulas of Complement Sets

 Law of Double complementation: (A’)’ = A

 Laws of Empty set and Universal Set: Ø’ = ∪ and ∪’ = Ø

7
  Complement Law : A∪A’ = U, A⋂A’ = Ø and A’ = U – A
 De Morgan’s Laws: (A ∪B)’ = A’ ⋂B’ and (A⋂B)’ = A’ ∪ B’

Intersection of sets: The intersection of two sets A and B is the set consisting
of all elements which belong to both A and B. The intersection of A and B is
denoted as A∩B.
Example: A= {1,3,5}
B= {2, 3, 10}
∴ A ∩ B = {3}

Union of sets: The union of two sets A and B is the set consisting of all
elements which belong to either A or B or both. The union of A and B is
denoted as AUB.
Example: A= {1,3,5}
B= {2, 3, 10}
∴ AUB= {1,2,3,5,10}

8
Complement of a set: The complement of a set is the set of all those
elements which do not belong to that set. In other word, if U be the
universal set and A be any set then the complement of set A is the set
U-A and is denoted as A1, Ac, Ā or ~A.
Example: If U= {1,3,5,9,10,18} And A= {3,5,10}
∴ U-A= {1,9,18}
Difference of two sets: The difference of two sets A and B is the set of all those
elements which belong to A and not to B and is denoted by A-B
Example: A= {1,2,3,4,5........100} B= {1,2,3,4,5.........500}
∴ A-B = Ø and B-A = {101..........500}
Cartesian product: The Cartesian product of sets A and B (denoted as A × B)
is the set of all possible ordered pairs where the first element is from A and the
second is from B.

9
Example 1: Let A and B be two finite sets such that n(A) = 20, n(B) = 28
and n(A ∪ B) = 36, find n(A ∩ B).
Solution: Since, n (A ∪ B) = n (A) + n(B) – n(A ∩ B).
So, n (A ∩ B) = n (A) + n(B) – n(A ∪ B)
= 20 + 28 – 36
= 48 – 36
= 12
Example 2: If A = {2, 3, 4, 5, 6, 7} and B = {3, 5, 7, 9, 11, 13}, then find (i) A
– B and (ii) B – A.
Solution: Given,
A = {2, 3, 4, 5, 6, 7} and B = {3, 5, 7, 9, 11, 13}
(i) A – B = {2, 4, 6}
(ii) B – A = {9, 11, 13}

10
 Venn Diagrams
Generally Venn diagram is used to help visualize any set and the relationship
between sets. It is usually bounded by a circle. With the help of Venn diagram
we can easily illustrate various set operations.
Following is the Venn diagram (Fig.1) of three sets A, B and C:

Example:
Using Venn diagram, verify that A ∩ (B ∩ C) = (A ∩ B) ∩ C
Solution:
LHS: Assume that the rectangular regions in Figs.-2, 3, 4 and 5 represent the
universal set U and its subsets A, B and C in each diagram are represented by
circular regions. In Fig.-2, the set A has been shaded by horizontal straight lines
and the set (B ∩ C) has been shaded by vertical straight lines (i.e., the region
common to both the sets B and C). Then by definition, the cross hatched region
(i.e., the region where the horizontal and vertical lines intersect) represents the
set A ∩ (B ∩ C). The region representing this set has been shaded separately by
slanting lines in Fig.-3.

11
RHS: In Fig.-4, the set (A ∩ B) has been shaded by horizontal lines (i.e., the
region common to both the sets A and B) and the set C has been shaded by
vertical straight lines. Then by definition, the cross hatched region (i.e., the
region where the horizontal and vertical lines intersect) represents the set (A ∩
B) ∩ C. The region representing this set has been shaded separately by slanting
lines in Fig.-5.

From Figs.-3 and 5, we see that the regions representing the sets [A ∩ (B ∩ C)]
and [(A ∩ B) ∩ C] are identical. This verifies that A ∩ (B ∩ C) = (A ∩ B) ∩ C.

Laws of Algebra of Sets

Basic set operations viz. union, intersection and complement satisfy some laws,
known as Laws of Algebra of Sets. We state below these laws of algebra of sets:
1. Idempotent Laws: For any set A, we have (i) A ∪ A = A, (ii) A ∩ A = A.

12
2. Commutative Laws: For any two sets A and B, we have (i) A ∪ B = B ∪ A,
(ii) A ∩ B = B ∩ A.
3. Associative Laws: For any three sets A, B and C, we have,
(i) A ∪ (B ∪ C) = (A ∪ B) ∪ C , (ii) A ∩ (B ∩ C) = (A ∩ B) ∩ C.
4. Distributive Laws: (i) A ∪ (B ∩ C) = ( A ∪ B) ∩ ( A ∪ C),
(ii) A ∩ (B ∪ C) = (A ∩ B) ∪ (A ∩ C).
5. De Morgan’s Laws: For any two sets A and B, we have
(i) (A ∪ B)c = Ac ∩ Bc , (ii) (A ∩ B)c = (Ac ∪ Bc)
6. Identity Laws: Let U be the universal set, φ be the null set and A be any
subset of U. Then, (i) A ∪ U = U, (ii) A ∩ U = A, (iii) A ∪ φ = A, (iv) A ∩ φ =
φ.
7. Complement Law: with the same notation given in (6) above, we have (i) A
∪ Ac = U, (ii) (A ∪ U)c = φ, (iii) (Ac)c = A, (iv) Uc = φ, (v) φc = U, where Ac is
the complement of A.

13
 Chapter: Co-Ordinate Geometry & the Straight Line

Introduction:
Coordinate geometry, also known as analytic geometry, is a branch of
mathematics that deals with geometric figures using a coordinate system. It
involves representing points, lines, curves, and shapes in a plane using
numerical coordinates. The Cartesian coordinate system is commonly used,
where points are defined by ordered pairs (x, y), with x representing the
horizontal position and y representing the vertical position. This system allows
for the precise description and analysis of geometric shapes and their
relationships through algebraic methods.

Connected to Modern Business

In modern businesses, the relevance of geomagnetic considerations is often tied
to specific industries and applications. Here are a few ways in which coordinate
geomagnetic concepts can be relevant:
1. Navigation and Logistics:
Businesses involved in transportation, shipping, and logistics rely on accurate
navigation. Understanding geomagnetic coordinates is crucial for developing
navigation systems, especially for those that use magnetic compasses.
2. Mining and Resource Exploration:
Geomagnetic data is employed in the exploration of natural resources, such as
minerals and oil. Magnetic surveys help identify subsurface structures, and
accurate geomagnetic models contribute to effective resource exploration.
3. Satellite and Communication Systems:
Companies operating satellites or involved in telecommunications need to
consider geomagnetic variations. Understanding the geomagnetic field is crucial
for planning satellite trajectories and mitigating potential interference in
communication systems.
4. Electric Power Industry:
Fluctuations in the geomagnetic field, especially during geomagnetic storms,
can impact power grids. Businesses in the electric power industry need to
monitor and mitigate the effects of geomagnetic disturbances to ensure the
reliability of power supply.
14
5. Geolocation Services:
Businesses providing location-based services, such as mapping, rely on accurate
positioning systems. Geomagnetic coordinates, along with other location data,
contribute to the precision of geolocation services.
6. Scientific Research and Environmental Monitoring:
Companies involved in environmental monitoring or scientific research may use
geomagnetic data to study Earth's magnetic field variations. This information
can be valuable for understanding environmental changes and their potential
impact on ecosystems.
While coordinate geomagnetic concepts may not be directly applicable to all
businesses, they play a crucial role in specific sectors where Earth's magnetic
field variations have practical implications. Businesses operating in these
sectors benefit from integrating geomagnetic considerations into their planning,
monitoring, and decision-making processes.

Quadrants
There are four quadrants in coordinate geometry, where a two-dimensional
plane is divided into four regions by two perpendicular lines – the x-axis and the
y-axis. Each quadrant is identified by a Roman numeral (I, II, III, and IV) and
has specific characteristics:

1. Quadrant I:
- The top-right quadrant.
- Both x and y coordinates are
positive.
- Commonly referred to as the
"northeast" quadrant.
2. Quadrant II:
- The top-left quadrant.
- The x-coordinate is negative,
while the y-coordinate is positive.
- Often called the "northwest"
quadrant.

15
3. Quadrant III:
- The bottom-left quadrant.
- Both x and y coordinates are negative.
- Commonly known as the "southwest" quadrant.
4. Quadrant IV:
- The bottom-right quadrant.
- The x-coordinate is positive, while the y-coordinate is negative.
- Often referred to as the "southeast" quadrant.
The quadrants are essential in locating points on a Cartesian coordinate system.
When representing a point with coordinates (x, y), the signs of x and y
determine the quadrant in which the point lies.

Coordinates
In a two-dimensional figure a point in plane
has two coordinates.
Generally, the first coordinate is read on the
X ́OX axis and the second coordinate on
the Y ́OY axis. Various methods of
expressing these pairs of coordinates are:
(a) Varying alphabets (x, y) (a, b) etc.
(b) Varying subscripts (x1, y1) (x2, y2) etc.
(c) Varying dashes (x ́ ́, y ́ ́)

Coordinates of Mid-Points
We can find out the coordinates of a mid-point from the coordinates of any two
points using the following formula:
𝑋1 + 𝑋2 𝑦1 + 𝑦2
Xm = ym =
2 2

This is helpful first in finding out the middle point from a join of any two points
and secondly in verifying whether two straight lines bisect each other.

16
 Distance between two points
Distance between two points is the length of the line segment that connects the
two given points. Distance between two points in coordinate geometry can be
calculated by finding the length of the line segment joining the given
coordinates.
Distance between two points in coordinate geometry is calculated by the
formula

Distance: √(𝑥2 − 𝑥1)² + (𝑦2 − 𝑦1 )²

= √(𝑑𝑖𝑓𝑓𝑒𝑟𝑛𝑐𝑒 𝑜𝑓 𝑎𝑏𝑐𝑖𝑠𝑠𝑎 )² + (𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑜𝑓 𝑜𝑟𝑑𝑖𝑛𝑎𝑡𝑒𝑠)²

Where (x1, y1) and (x2, y2) are two points on the coordinate plane. Let us
understand the formula to find the distance between two points in a two-
dimensional and three-dimensional plane.

Example: What is the distance between two points A and B whose

coordinates are (3, 2) and (9, 7), respectively?
Solution: Given, A (3, 2) and B (9, 7) are the two points in a plane.
We have to find the distance between A and B.
Using distance between formula for two points, we know;

Distance: √(𝑥2 − 𝑥1)² + (𝑦2 − 𝑦1 )²

Here, x1 = 3, x2 = 9, y1 = 2 and y2 = 7.
Thus, putting all the values of x and y in the formula, we get;
d=√((9-3)² + (7-2)²)
d = √(62 + 52)
d = √(36 + 25)
d = √61 unit.

17
Example 2: Find the distance of a point P(4, 3) from the origin.
Solution: Given, P (4, 3) is a point at a distance from the origin.
The coordinates of a point at the origin will be (0,0).
Using the distance between formula for two points, we know;

Distance: √(𝑥2 − 𝑥1)² + (𝑦2 − 𝑦1 )²

Here, x1 = 4, x2 = 0, y1 = 3 and y2 = 0.
Thus, putting all the values of x and y in the formula, we get;
d = √((0-4)² + (0-3)²)
d = √(42 + 32)
d = √(16 + 9)
d = √25
d = 5 unit

Section formula
The coordinates of a point R (x, y) dividing a line in the ratio of m: n connecting
the points P (x1, y1) and Q (x2, y2). The coordinates of the point R using the
following formula:

 Section formula in business

The section formula, which is used in coordinate geometry, might not be
directly applicable in the traditional sense. However, caring a business context,
the section formula, which is used in coordinate geometry, might not be directly
applicable in the traditional sense. However, certain principles related to
dividing and allocating resources or responsibilities in a specific ratio can draw
some parallels with the section formula. Here's a conceptual analogy:
1. Resource Allocation - In business, you may need to allocate resources such
as budget, time, or personnel to different projects or departments. The section

18
formula could metaphorically represent how these resources are distributed
based on specific ratios, reflecting the needs and priorities of the organization.
2. Revenue Sharing - For partnerships or collaborations, the section formula
could be loosely associated with the distribution of revenues. The ratio of
contributions or investments made by different partners may determine how
profits are shared.
3. Market Segmentation - In marketing, understanding market segments
involves dividing a target market into different sections based on certain
criteria. While not a direct application of the section formula, the concept of
dividing a market in a specific ratio relates to how businesses tailor their
strategies to different customer segments.
4. Product Mix Strategy - Businesses often manage a portfolio of products or
services. The section formula could be metaphorically applied when
determining the proportion of resources or focus allocated to different products
within the overall product mix.

The Straight Line

If two points are given and if we join the points by a scale we get a straight line.
Thus if x and y are two given points
X• •Y
Then XY is a straight line.
Mathematically it is defined as the shortest distance between two distinct points.
The study of curves starts with the straight line which is the simplest
geometrical entity. Each point of a straight line have a slope. Hence let us
discuss the slope of a straight line.
Slope of a Straight Line
The slope of the line is the tangent of the angle formed by the line above the x-
axis towards its positive direction whatever be the position of the line as shown
below:

19
Slope of a line is generally denoted by M. Thus if a line makes an angle
Q with the positive direction of the x-axis, its slope is, M = tanQ.
If Q is acute (i & iii), slope is positive and if Q is obtuse (ii and iv), the slope is
negative. In terms of the co-ordinates, the slope of the line joining two points,
say A (x1, y1) and B (x2, y2) is given by.

Area Calculation

In Geometry, a triangle is a three-sided polygon that has three edges and

three vertices. The area of triangle in coordinate geometry is calculated by
the formula,
1
[x1 (y2 − y3) + x2(y3 − y1) + x3(y1 − y2)],
2

Where (x1, y1), (x2, y2), and (x3, y3) are the vertices of the triangle.

The area of the triangle is the space covered by the triangle in a two-
dimensional plane. The formula for the area of a triangle is (1/2) × base ×
altitude. We will use this formula to find out the area of a triangle in
coordinate geometry.

20
Example: What is the area of the ∆ABC whose vertices are A(1, 2), B(4, 2) and
C(3, 5)?
Solution:
Using the formula,
A = (1/2) [x1 (y2 – y3) + x2 (y3 – y1) + x3(y1 – y2)]
A = (1/2) [1(2 – 5) + 4(5 – 2) + 3(2 – 2)]
A = (1/2) [-3 + 12] = 9/2 square units.
Therefore, the area of a triangle ABC is 9/2 square units.

21
 Chapter: Functions & Equations

Equation
An equation is a statement which says that two quantities are equal to each
other. An equation consists of two expressions with a ‘=’ sign between them. In
other words, if two sides of an equality are equal only for particular value of the
unknown quantity or quantities involved, then the equality is called an equation.
For example, 4x = 8 is true only for x = 2. Hence, it is an equation.
An equation which does not contain any variable is either a true statement, such
as 2 + 3 = 5, or a false statement, such as 3 + 5 = 12. If an equation contains a
variable, the solution set of the equation is the set of those values for the
variable which gives a true statement when substituted into the equation. For
example, the solution set of y2= 4 is (–2, 2), because (–2)2 = 4, and 22 = 4, but y2
≠ 4 if y is any number other than –2 or 2.
Equations signify relation between two mathematical (algebraic / trigonometric
/ transcendental) expressions symbolized by the sign of equality (=). However,
the equality is true only for certain value or values of the variable or variables
symbolized generally by x, y, z, u, v, w etc. and these values are known as the
solution of the equation.

Linear Equations: An equation of the form ax + b = 0, where x is the variable

and a and b are constants.
Example: 2x – 5 = 0
Quadratic Equations: An equation of the form ax2 + bx + c = 0, where x is the
variable and a, b, and c are constants with a ≠ 0.
Example: x2 – 4 = 0

22
 Function
A function can be viewed as an input-output device. The significant
relationships in mathematical models typically are represented by functions. It
is the purpose of this chapter to introduce this important topic. In business
applications, we sometimes are interested in determining whether there are
values of variables, which satisfy several attributes. In this chapter, we will also
be concerned with the process used to determine whether there are values of
variables, which jointly satisfy a set of equations.

Types of functions:
1. One-one (1-1) Function: If the function f corresponds to the different
elements of the set Y for the different elements of set X, then the function is
known as one-one (1-1) function. Example: f(x) = 2x + 1

23
2. Onto function: If the function f satisfies the properties of one-one function
and onto function then it is known as one-one and into function.
Example: f: X→Y: f(x) = x + 1
3. Explicit function: A function expressed directly in terms of the dependent
variable is said to be an explicit function. Example: y = f(x) = x 2 + 5x – 4.
4. Implicit function: The function which is not expressed directly in terms of
the dependent variable, there is a mutual relationship between the dependent
and the independent variables.
Example: x 2 + y 2 = 10 is an explicit function because

y = ±√10 − 𝑥2
5. Monotone Function: When the dependent variable increases with an
increase in the independent variable, the function is called a monotonically
increasing function. And when the dependent variable decreases with an
increase in the independent variable, the function is called a monotonically
decreasing function.
Example: y = f(x) = 2x is a monotonically increasing function
y = f(x) = is a monotonically decreasing function
6. Even function: If a function f (x) is such that f (-x) = f(x), then it is called an
even function of x. Example: y = f(x) = 2x 2 is an even function.
7. Odd function: If a function f (x) is such that f (-x) = -f (x), then, it is said to
be an odd function of x. Example: y = f(x) = 2x is an odd function of x.
8. Linear function: The relationship between y and x expressed by
y = ax + b; a and b are constants.
Is called a functional relationship because for each value of x, there is one, and
only one corresponding value for y. Notice that the expression states y is in
terms of x and so we say y is a function of x. This type of function is known as
linear function because it represents straight line in the graph. Here, x is called

24
independent variable and y is called dependent variable because, the value of y
depends upon what value we assign to x.
Example: y = f(x) = 3x + 4 is a linear equation.

9. Polynomial: If n is a positive integer, the expression

Is called a polynomial of degree n.

Are polynomial of degree 2 and 4 respectively.

10. Inequality: When two mathematical expressions become connected by the

inequality is known as an inequality. (≠ or ≤ or ≥ or < or > sign)
Example: 3x2 + 4x + x > 2x + 1
3x + 1 > 0, are inequalities.

25
 Connected to Modern Business
Functions play a pivotal role in modern business by providing a mathematical
representation of relationships between variables. For instance, businesses often
use linear functions to model the relationship between input and output, helping
optimize processes and resource allocation. Quadratic functions can be
employed to analyze cost structures and identify optimal production levels.
Exponential functions are valuable for modeling growth patterns, aiding in areas
like market expansion and sales forecasting. The ability to express real-world
phenomena through mathematical functions equips businesses with powerful
tools to make informed decisions, optimize efficiency, and strategically plan for
the future.
Equations are integral to modern business for solving complex problems and
making data-driven decisions. Systems of equations are particularly useful in
scenarios where multiple variables interact. For example, simultaneous
equations can model interconnected aspects of a business, like the delicate
balance between production costs, pricing strategies, and profit margins.
Solving these equations enables businesses to find optimal solutions, whether
it’s identifying the most cost-effective production levels or determining the
pricing strategy that maximizes profitability. In essence, functions and
equations serve as indispensable analytical tools, empowering businesses to
navigate the intricacies of modern markets and make strategic decisions
grounded in mathematical rigor.

26
 Chapter: Logarithms

Introduction
A logarithm is a mathematical function that represents the exponent or power to
which a base must be raised to obtain a certain number. In other words, if b y=x,
then the logarithm of x to the base b is y, and it is denoted as logb (x).

27
The logarithm function has a few important properties:
Base:
The base of the logarithm is the number that is raised to a certain power.
Common bases include 10 (common logarithm) and e (natural logarithm),
where “e” is the mathematical constant approximately equal to 2.71828
Product Rule:
The logarithm of a product of two numbers is the sum of the logarithms of the
individual numbers, i.e.
logb(m⋅n) = logb(m) + logb(n)
[Note that the bases of all logs must be the same here.]
Quotient Rule:
The logarithm of a quotient of two numbers is the difference between the
logarithms of the individual numbers, i.e.
𝑚
logb( ) = logb(m) – logb(n)
𝑛

[Note that the bases of all logs must be the same here.]
Power Rule:
The exponent of the argument of a logarithm can be brought in front of the
logarithm, i.e.
logb(mn) = n ⋅ logb(m)
Here, the bases must be the same on both sides. This resembles/is derived from
the power of power rule of exponents: (xm)n = xmn.
Logarithm of 1:
For any base b, logb (1) = 0 log b(1) = 0. This is because any non-zero number
raised to the power of 0 is equal to 1.
Loga a
Since a1 = a, for any 'a', converting this equation into log form, loga a = 1. Thus,
the logarithm of any number to the same base is always 1. For example:
 log2 2 = 1

28
  log3 3 = 1

Connected to Modern Business

Logarithms have several applications in modern business, particularly in areas
related to finance, data analysis, and information technology. Here are some
ways in which logarithms are relevant to modern business:
Finance and Investment: Logarithmic scales are commonly used in financial
analysis and investment. Stock prices, interest rates, and economic indicators
often exhibit exponential growth or decay. Logarithmic scales help represent
these trends in a way that makes it easier to analyze and compare percentage
changes over time.
Return on Investment (ROI): Logarithms are used in calculating the
compound annual growth rate (CAGR) and determining the overall return on
investment. They are helpful in understanding the growth of investments or
business metrics over multiple periods.
Data Compression and Storage: Logarithmic compression is employed in data
storage and transmission. For instance, logarithmic coding techniques are used

29
to compress data efficiently, reducing the amount of storage space required and
facilitating faster data transfer. This is crucial in the realm of data-driven
decision-making and analytics.
Algorithm Analysis: In the field of computer science and information
technology, logarithmic time complexity is highly desirable in algorithms.
Algorithms with logarithmic complexity are efficient and scalable, making them
crucial for processing large datasets and optimizing business operations.
Pricing and Elasticity: Logarithmic scales are often used to analyze price
elasticity and demand curves. Understanding the logarithmic relationship
between price and demand helps businesses set optimal prices, predict market
behavior, and make strategic pricing decisions.
Marketing and Customer Acquisition: Logarithmic scales can be useful in
understanding customer acquisition and marketing metrics. For example,
businesses may analyze the growth rate of customer acquisition over time, and
logarithmic scales help in presenting these trends in a more manageable and
interpretable way.
Risk Management: Logarithmic scales are used in risk assessment and
modeling. The logarithmic nature of certain financial indicators allows
businesses to better access and manage risks associated with market
fluctuations, investment portfolios, and financial instruments.

Types of Logarithm
There are two types of Logarithm:
1) Natural Logarithm – The common logarithm is logarithm with base 10. For
instance (Logea)
2) Common Logarithm – The natural logarithm is logarithm with base e,
where e is the mathematical constant approximately equal to 2.71828. For
instance, Log10a

Example 1: Find the value of log5 (1/25).

Solution:
We will simplify the given expression using the rules of logarithms.
log5 (1/25)
= log5 (1/52)
= log5 (5-2)
30
= -2 log5 5
= -2(1)
= -2
Answer: log5 (1/25) = -2.

Example 2: Compress the following as a single logarithm: 5 log3 x + 2 log3 (4x)

- log3 (8x5).
Solution: By the properties of logarithms,
5 log3 x + 2 log3 (4x) - log3 (8x5)
= log3 x5 + log3 (4x)2 - log3 (8x5)
= log3 x5 + log3 (16x2) - log3 (8x5)
= log3 (x5 · 16x2) - log3 (8x5)
= log3 (16x7) - log3 (8x5)
= log3 (16x7 / 8x5)
= log3 (2x2) (Answer)

31
 Chapter: Mathematics of Finance

Introduction
The mathematics of finance involves applying mathematical concepts to
analyze and model financial markets, investments, and risk. Key areas include
time value of money, interest rates, present value, future value, annuities, and
various financial derivatives. These tools help quantify and manage financial
risks and make informed investment decisions.
In the mathematics of finance, the time value of money is fundamental,
emphasizing that a sum of money has different values at different points in time.
Interest rates play a crucial role in determining the worth of cash flows over
time. Present value and future value calculations help assess the current and
future values of investments or loans.
Annuities involve a series of equal payments at regular intervals, and
understanding their present and future values is essential. Financial derivatives,
such as options and futures, leverage mathematical models to analyze and
predict price movements in financial markets.
Risk management employs statistical methods and probability theory to
quantify and mitigate financial risks. This field of study equips professionals
with tools to optimize portfolios and make strategic financial decisions. Overall,
the mathematics of finance is a dynamic and multifaceted discipline crucial for
understanding and navigating the complexities of the financial world.

Connected to Modern Business

The mathematics of finance plays a crucial role in modern business by
providing analytical tools and frameworks for decision-making. Here's how it
relates:
Investment Decisions: Businesses use financial mathematics to evaluate
investment opportunities, assessing the potential returns and risks associated
with various projects or assets.
Capital Budgeting: Techniques like Net Present Value (NPV) and Internal
Rate of Return (IRR) help in making informed decisions about allocating capital
to different projects.

32
Financial Planning: Time value of money concepts assists in financial
planning by determining the value of future cash flows, aiding in budgeting, and
setting realistic financial goals.
Corporate Finance: Concepts like cost of capital, dividend valuation models,
and financial derivatives are employed in corporate finance to optimize capital
structure and enhance shareholder value.
Financial Markets: In the context of financial markets, mathematical models
are used for pricing financial instruments, managing portfolios, and developing
trading strategies.
Credit and Lending: Financial mathematics is crucial in assessing credit risk,
determining interest rates, and evaluating loan terms, influencing decisions in
lending and borrowing.
Economic Forecasting: Mathematical models are employed to analyze
economic trends, predict future market conditions, and guide strategic decisions
in response to changing economic landscapes.
In summary, the mathematics of finance provides a systematic approach for
businesses to make sound financial decisions, manage risks effectively, and
optimize resource allocation in the dynamic and competitive landscape of
modern business.

Types of Interest
There are two types of Interest:
1. Simple Interest
2. Compound Interest
Simple interest: If we calculate the interest only on capital or principal then
this is called simple interest. The simple interest formula is as follow:
Interest (I) = Pin
Where,
I= Total interest (always in Tk.)
P= Principal or capital
i= Rate of interest (always in percentage form)
n= Time in years

33
Example: Compute the interest on Tk.30000 at 10% for 36 months.
Solution:
Here, P= 30,000
i= 10% =100/10 = 0.1
n= 36 months = 36/12 = 3 years

We know,
Interest (I) = Pin
= 30000× 0.1× 3
= 9000 Taka

Compound Interest: Compound interest is the addition of interest to the

principal sum of a deposit, or in other words, interest on interest. Compound
interest can be calculated in five different terms: annually, semi-annually,
quarterly, monthly and daily. Now, we find out the formula for calculating the
future value if the interest rate is compounded:

1) Annually F = P (1+i) n

𝑖
2) Semi-annually F = P (1+ ) 2n
2

𝑖
3) Quarterly F = P (1+ ) 4n
4

𝑖
4) Monthly F = P (1+ ) 12n
12

34
 𝑖
5) Daily F = P (1+ ) 365n
365

Example: Compute the Future value if $70,000 is invested for 5 years at 9%

compounded annually.
Solution:
Here, P= 70,000
i= 9% = 9/100 = 0.09
n= 5 years
F=?
(1) Since the interest rate is compounded annually, then
Future value, F = P (1+i) n
= 70000 (1+ 0.09) 5
= 107703.6768
Interest, I = F – P
= 107703.6768 - 70,000
= 37703.6768

If we compute the future value using the rest of the interest rates then we have,
(2) Compounded semi-annually then,
𝑖
Future value, F = P (1+ ) 2n
2
0.09 2 × 5
= 70,000 (1+ )
2

= 108707.8595
Interest, I = F – P
= 108707.8595 - 70,000
= 38707.8595

(3) Compounded quarterly then,

35
 𝑖
Future value, F = P (1+ ) 4n
4
0.09 4 × 5
= 70,000 (1+ )
4

= 109235.644
Interest, I = F – P
= 39235.6440

(4) Compounded monthly then,

𝑖
Future Value, F = P (1+ ) 12n
12
0.09 12 × 5
= 70,000 (1+ )
12

= 109597.6719
Interest, I = F – P
= 39597.6718
(5) Compounded daily then,
𝑖
Future value, F = P (1+ ) 365n
365
0.09 365 × 5
= 70,000 (1+ )
365

= 109775.7635
Interest, I = F – P
= 39775. 7635

Bank Discount

In many bank loans, the interest charge computed not on the amount borrower
receives but on the amount that is repaid later. In case of bank discount future
value is called maturity value, present value is called proceed and interest rate is
called discount rate (d).

So, in case of bank discount, Interest (I) = F.d.n

36
We know, F= P+ I

F= P+ Fdn

P= F- Fdn

P= F (1-dn)
𝒅
Effective interest rate, ie =
𝟏−𝒅𝒏

Note: effective interest rate (ie) and interest rate (i) are same.

Example: Mr. Smith a note promising to pay AB bank $12000 ten months from
now and receives $10000. Find the discount rate and effective interest rate.
Solution: Here, F = 12,000
P = 10,000
d =?
n= 10 months = 10/12 = 0.8333
We know, P = F (1- dn)
→ 10000 = 12000 {1-(d×0.8333)}
10000
→ (1-0.8333d) =
12000

→ 1-0.8333d = 0.8333
→ -0.8333d = 0.8333 - 1
→ -0.8333d = -0.1666
→ d = 0.1666/0.8333
→ d = 0.1999 × 100
→ d = 19.99%
Again,
d = 19.99% = 19.99/100 = 0.1999
n= 10 months = 10/12 = 0.8333

37
We know,
𝑑
Effective interest rate, ie =
1−𝑑𝑛

ie = 0.1999/ (1- 0.1999×0.8333)

= 0.1999/ (1- 0.1665)
= 0.1995/ 0.8334
= 0.2393×100
= 23.93%

Annuity
Annuity: An annuity is a series of equal payments made at regular intervals
over time. These payments can occur monthly, quarterly, annually, or at any
other regular interval. Annuities are commonly used in retirement planning,
insurance, and investment scenarios. There are two main types of annuities:
1) Ordinary Annuity
2) Annuity Due

Ordinary Annuity: Payments are made at the end of each period.

An ordinary annuity is a fixed amount of income that is given annually or at
regular intervals. An annuity is an agreement with an insurance firm during
which you create a payment (one-time big payment) or series of payments and,
in return, receive a regular fixed income, beginning either immediately or after
some predefined time within the future. The ordinary annuity formula is used to
find the present and future value of an amount.
Formula of Ordinary Annuity:
(1+𝑖 )𝑛 −1
Future Value of Ordinary Annuity, F = R [ ]
𝑖
1 − (1+𝑖 )− 𝑛
Present Value of Ordinary Annuity, P = R [ ]
𝑖

Here, R is called Installment or Payment per period.

In case of Future Value if we want to find out the interest, then

38
 I = F – (R × n)
Here, R = Installment
n = No. of installments

In case of Present Value if we want to find out the interest, then

I = (R × n) - P
Here, R = Installment
n = No. of installments

Annuity Due: Payments are made at the beginning of each period.

An annuity due is a type of financial arrangement in which a series of equal
payments or cash flows are made or received at the beginning of each period. In
contrast to an ordinary annuity, where payments occur at the end of each period,
an annuity due involves payments at the start of each period.

THE END

39