Report On

APPLICATION OF METHAMETICS IN BUSINESS

Submitted To:
Kawser Ahmed Shiblu
Lecturer
Department of Finance
Jagannath University.

Submitted
BY:
SL

Name

ID

01

Ritu Ahmed

M150203755

02

Anik Bhowmick

M160203547

03

Apurba Sarkar

M160203541

04

Sujoner Rahman

M160203543

05

Mezbah Uddin

06

Al-Imran Patwary

M160203548

07

Md. Zaherul Islam

M160203536

M160203533

Letter of Transmittal

24th Sep, 2016

Kawser Ahmed Shiblu

Lecturer
Department of Finance
Jagannath University.
Subject: Letter of Transmittal

Dear sir,

We are pleased to submit the report you have assigned to us. The report paper was
to prepare the term paper on the course named Business Mathematics course
code # FIN 6207, as a part of our academic activities. This is the report on
Applications of mathematics in business. The report reviews that how the
business firms solve the real problems arise. And we focused how to solve the
problems when we enter in business world. We tried our best to prepare this report
a fault free, but it is not possible. We hope that you will take any mistake with kind
consideration.
Thank you.

Sincerely
Mezbah Uddin
(On behalf of group)

ACKNOWLEDGEMENT
This report paper entitled Applications of Mathematics in business is submitted
as the requirement of a part of the study of Business Mathematics in the MBA
program conducted by Department of Finance, Jagannath University. To prepare
this report an intensive study was made covering various terminologies with the
help of books named Mathematics with Applications in Management and
Economics by Gordon D. Prichett and John C. Saber and Business Mathematics
by D.C. Shancheti and V.K. Kapoor.
At first we want to pay our gratitude to all mighty Allah for preparing the report
successfully. We are extremely grateful to our honorable course teacher Kawser
Ahmed Shiblu, Department of Finance, Jagannath University for her painstaking
guidance, suggestion and all type of support & supervision to prepare this report
paper. He continuously reminded us for the preparation of this report paper and
finally gave an outline to write down the paper spending her valuable time.
Without His untiring efforts, completion of this report paper would have been
impossible. Above all this report paper is a combined effort of the sincerity,
efficiency and determination of all the group members.

Table of Contents
TOPICS
Acknowledgement
Executive Summary
Origin of the Report
Objectives of the Report
Scope of the Report
Methodology and Sources of the Report
Limitations of the Report
Introduction
Description of Linear Equation
Examples of Linear Equation
Description of Arithmetic Progression
Example of Arithmetic Progression
Description of Geometric Progression
Example of Geometric Progression
Logarithm
Set theory
Coordinate geometry
Findings
Conclusion

PAGES
3
5
6
6
7
7
8
9
10-19
20-29
31-34
35-36
37-38
39-40
41-47
48-54
55-58
59
60

Executive Summary
The mathematics is used by business & commercial enterprises to record and
manage business operations within the world. Commercial organizations use
mathematics in accounting, inventory management, marketing, sales forecasting
and financial analysis like analysis of annual report. Mathematics typically used in
commerce includes elementary arithmetic, elementary algebra, statistics and
probability. Business management can be made more effective in some cases by
using more advanced mathematics such as arithmetic progression, geometric
progression and linear programming.
The practical applications typically include checking accounts, price discounts,
markup and markdowns, payroll calculations, simple and compound interest,
consumer and business credit and mortgages.
Much emphasis is placed on using mathematical techniques in business. It gives
additional credence to business decisions and helps managers and executives
justify their actions. Potential and excellent managers are separate from their
average peers by the use of their experience when considering quantitative data.
In this report we use linear equation, arithmetic progression and geometric
progression which are very important because those are really used in finding out
of an organizations general account.

Origin of the Report

As a Part of Business Mathematics course, we have prepared this report. Our
course teacher, Kawser Ahmed Shiblu instructed us to prepare a report on
Applications of Mathematics in Business. We have made a detailed and critical
analysis on the topic.

Objectives of the Report

The main objective of the study is the evaluation of the application of the
mathematics in business with the help of a case study. We have read about linear
equation, arithmetic progression, geometric progression and such terminologies in
books but while preparing this report we have understood how they can help us to
solve business related problems.
To have an overall idea on the application of mathematical tools in business.
To have information about how the business organization uses mathematical
tools in decision making, determining cost and revenue purpose.
To know how we can use these tools in the future when there arises any
business related problem.

Scope of the Report

In this term paper we will focus on use of arithmetic progression and geometric
progression in business. And also see that how we can find the value of unknown
variables through it. And in this way we can solve business problems. We will also
discuss how linear equations can help a business to determine its fixed cost,
variable cost and also can be used in break-even analysis.

Methodology and Sources of Information of the Report

To make this report we followed some ways. At the very beginning we collected
information about arithmetic progression, geometric progression and linear
equations from book. And then we collected information about how they can be
used in business organizations.
The term paper is mainly based on secondary data. We have visited several
websites and studied books and journals to collect the information and to get a
thorough idea about our subject matter.

Limitations of the Report

The major limitations encountered are:

Lack of experience on our part has acted as constraints in the way of

meticulous exploration on the topic.
Most adequate, exact and updated data have not been available due to the
secrecy of the organization visited.

Introduction
Mathematics has entered into many aspects of our life. People in every field use
mathematics to accomplish their objectives. Here in this report we have focused on
the applications of business mathematics in practical life. Mathematics is used by
business organizations to record and manage business operations. Commercial
organizations use mathematics in accounting, inventory management, marketing,
sales forecasting, and financial analysis.
Mathematics typically used in commerce includes elementary arithmetic,
elementary algebra, statistics and probability. Business management can be made
more effective in some cases by use of more advanced mathematics such
arithmetic progression, geometric progression and linear programming. Many
types of businesses use mathematics for management and operational purpose.
Service business like banks and other financial institutions use mathematics to
develop financial formulas that help them to operate efficiently. Manufacturing
businesses also use mathematics for decision-making purpose.
So we can see that every business has some need of mathematics that means
mathematics has entered into business world with great importance. And this
importance is increasing day by day. Now we will give a short description on the
applications of business mathematics in practical life. After that we will begin main
discussion where we selected three tools for solving problems.

Linear
Equation &
Its Application

Definition

Linear equations are equations whose terms (the parts separated by plus, minus,
and equal signs) are a constant, or a constant times one variable to the first power.
Thus,
2x-3y=7
is a linear equation because it consists of the constant 7, the term 2x (which is the
constant 2 times x to the first power), and -3y, which is also a term consisting of a
constant times one variable to the first power.
The highest power of any term in a linear equation is one. These equations have
graphs that are straight lines. Linear equations can have one or more variables.
Linear equations occur with great regularity in applied mathematics.
A common form of a linear equation in the two variables x and y is

y=mx+b

Where m and b designate constants (the variable y is multiplied by the constant 1,

which as usual is not explicitly written). Here m and b are constants and y is the
dependent variable whereas x is the independent variable. The value of y depends
upon what value we assign to x, and so y is called the dependent variable. The
dependent variable (y) is plotted on the vertical axis and the independent variable
(x) is plotted on the horizontal axis.
The origin of the name "linear" comes from the fact that the set of solutions of such
an equation forms a straight line in the plane. In this particular equation, the
constant m determines the slope or gradient of that line; and the constant term b
determines the point at which the line crosses the y-axis.

Graphical Representation of Linear Equation in the form y = mx +b:

Now a very important thing here is to determine m that is the slope of the equation.

Slope:

Numerically, the slope of a straight line is the ratio of the vertical change (rise or
fall) to the horizontal change (run) between two points in the line, where the rise or
fall is the vertical separation and the run is the horizontal separation of the two
points. Slope represents the dependent variables rate of change with respect to the
independent variable.
Slope = Vertical change (rise)/Horizontal change (run)
m = Difference of ys/Difference of xs

=
=1
The equation of a line expressed as y = mx + b is called the slope- intercept form.
Here, as mentioned before x and y are variables, m is the slope and b is the yintercept. The y-intercept or b is where the line cuts the y-axis when x equals to
zero.

Example of using slope:

In this example we will use the terms disposable income, personal consumption
expenditures and savings. It will be sufficient for our purposes here to think of
disposable income as the amount of income left after taxes have been paid. The
part of disposable income that is placed in a bank or otherwise invested is savings;
the remainder , personal consumption expenditure , is spent on food, clothing ,
housing, luxuries and so on.
A line segment fitted to points whose coordinates are in the order,
(Disposable income, Consumption expenditures)
We suppose that for Bangladesh in recent years it passes through (312,295) and
(575,537) where the numbers in crores of Tk. The slope of the segment is

= 0.92

Thus an increase of 263 crores Tk. in disposable income resulted in an increase of

242 crores Tk. in consumption expenditures. On a proportionate basis,

So the slope of the segment 0.92, when written with a denominator of 1, represents
the rate of change in consumption expenditures per one Tk. of additional income.
Another way of saying this is that Tk. 0.92 out of every additional 1 Tk. in income
will go to customer expenditures.

The graphical presentation of slope is given bellow:

Consumption Expenditure (crores)

(575,537
)

5
Slope
4
3
1

(312,295
)
0.9
2

1
1

1
2 34
5
6
7
Disposable Income in billions

Disposable Income

Disposable Income (crores)

Figure: Graphical representation of slope

Different uses of Linear Equation

Linear equation has a great importance on todays business activities. Linear

equation has become a very important mathematical tool in business because every
outcome of a business decision is a direct result of a choice made based on factors
involving money, labor, market and situation. Businesses use that equation to
predict how their business is going to go. Linear equations can create graph and
charts. Business people like having stats and keeping records to compare it with
their prediction.

Total cost function:

Manufacturers use linear equations to determine linear relationship between total
cost and number of units produced which is called the total cost function. Total

cost is the sum of fixed cost and variable cost. Through linear equation we can
determine the cost function and draw the graph.

Revenue Function:
Manufacturers also use linear equations to determine the linear relationship
between total revenue and number of units produced which is called the revenue
function. Total cost consists of fixed costs and variable costs.

Fixed Cost:
Fixed costs are the component of cost that does not vary with the number of units
made. Fixed cost is the cost of making no units. Examples of fixed cost are indirect
labor, rent payable, heating and lighting, and fixed asset depreciation based on
straight line or reducing balance method. These costs are described as fixed`
because they remain constant, at least within given limits. Beyond those limits,
they may vary. For example, a manufacturing may have to acquire additional
premises and plant and machinery if it is to increase output beyond a given level.
The result will be an increase in rent payable or depreciation of premises, and
increased plant depreciation.

In Investments:

Different financial and investment related company uses linear functions to

determine interest, amount of investment in different projects.

Variable cost:
Variable costs are the component of cost that changes as the number of units
produced changes. Examples are direct material, direct labor, royaltys payable on
units produced and commissions based on turnover.

Marginal cost and average cost:

Linear equation is also used for determining marginal cost which is the variable
cost per unit or the slope of the total cost function. It is constant if the function is
linear. And average cost is the cost per unit and is not constant.
.

Break-even analysis:
The main purpose of developing total cost function and total revenue function is
for break-even analysis.

Different Uses:

Linear equation also can be used in personal consumption expenditure, disposable

income and savings. Linear function has a great importance on determining the
amount of products demand or supply.

Break Even Analysis

A break-even analysis is a method of determining the number of units that must be
sold at a given price to recover cost and make a profit. The break-even point for a
product is the point where total revenue received equals the total costs associated
with the sale of the product (TR=TC). A break-even point is typically calculated in
order for businesses to determine if it would be profitable to sell a proposed
product, as opposed to attempting to modify an existing product instead so it can
be made lucrative. Break even analysis can also be used to analyze the potential
profitability of an expenditure in a sales-based business. Break-even volume is
volume level at which a corporation reaches its break-even point, measured by the
total fixed costs divided by the contribution margin per unit.
One way for a manager to make sure he or she is making a profit is to first analyze
the circumstances necessary to break-even (i.e., neither make a profit nor suffer a
loss). Then the manager can develop a plan to do better than break-even (i.e., make
a profit). Now to break-even simply means that revenues must equal costs, so since
Profit = Revenue Cost
Then at break-even
Revenue = Cost
Means that

Profit =0.

Examples of Linear Equation

Example: 1
In the following example we will see that how service related business
organizations like gas or electricity distribution company makes cost functions to
determine the charges for their service and the graphical presentation of the
function. We will also see how to determine the average cost per unit of the service
and how to draw the cost function. In this example we will use piecewise linear
functions.

Piecewise Linear Function:

Sometimes an equation will consists of more than one section or piece, each of
which is linear. For Example,

Y=
Describes a function composed of 2 linear pieces, the first being x for all values
less than 2 , and the second being x is greater or equal to 2.Such a function is
called a piecewise linear function.

Problem:

Padma Gas Company limited charges its customers according to their usage of gas
as follows: a Tk.6.71 customer charge, Tk.0.7376 per therm for the first 60
therms, and Tk.0.6800 per therm for each therm over 160.
a) Determine the cost function and draw the graph.
b) What is the charge for using 120 therms?
c) What is the charge for using 200 therms?
d) How many therms were used if the charge was Tk.355.93?
e) What is the average charge per therm?

Solution:
a) The charge for the first 160 therms consists of the Tk.6.71 customer charge plus
the Tk.0.7376 charge per therm. We denote the number of therms used by t ,so
this charge becomes,
(1)
Now if the customer uses more than 160 therms, the charge from (1) for the first
160 therms will be

To this must be added the charge of Tk.0.6800 for each therm over 160, resulting
in a charge of

(2)
Putting (1) and (2) together, we get the cost function,

500
400
300
200

So the graph of the function is

100

t
100

200

300

400

500

C(t)

(160,124.726)

Answer.

b) If the customer uses 120 therms, the charge is determined from the first piece
since 120<160. It is

So the charge for the first therm is 95.222 Tk.

Answer.

c) If the customer uses 200 therms , the charge is determined from the second
piece (since 200>160) to be

So the charge for 200 therms is 151.926 Tk.

Answer.

d) Now if the charge is $355.93 , the 4 customer must have used more than 160
therms because the cost of the first 160 therms was determined to be 124.726.
So from the first piece of the cost function, we have

Or,
This means that 500 therms were used.

Answer.

e) Here the total charge for the 120 therms used was determined to be Tk.95.22 ,
resulting from a customer charge of Tk.6.71 and a Tk.0.7376 charge per therm
used . On the other hand , the average charge per therm used is

.
So the average charge per therm is 0.7935 Tk.

Answer.

EXAMPLE: 2

In the following example we will present break-even interpretations from the point
of view of a manufacturer. On the production side the total cost or the cost of
production, as we have seen earlier, is made up of the fixed cost plus the variable
cost for the number of units produced. The revenue depends on the selling price
and the number of units sold. For simplicity we assume that the number of units
made and sold is the same.

Problem:

A manufacturer of jute bags has a fixed cost of Tk.10, 000 and variable

cost of

Tk.7 per furniture made. Selling price is Tk.10 per bag. He wants to determine the
following:
a) The revenue, cost and profit functions
b) The profit if 4000 bags are made and sold?
c) The profit if 1,000 bags are made and sold?
d) At what number of bags made and sold will the manufacturer break-even?
e) At what sales volume (revenue) will break-even occur?

Solution:
a) We denote the number (quantity) of jute bags made and sold by q. Then since
bags are sold Tk.10 a piece, the revenue function is
R (q) =10q
R (q) = 12
Now since the variable cost per bag Tk.7, the variable cost of making q bags will
be 7q. Adding the fixed cost of Tk.10, 000, the cost function becomes
C (q) = 7q+10000
C (q) = 7q +10,000.

Lastly, since profit is revenue minus cost, the profit function is

P (q) = R (q) C (q)
= 10q (7q + 10,000)
= 3q 10,000.
The coefficient 3 of q represents the profit per bag and is precisely the difference
between the selling price per bag of Tk.10 and the variable cost per bag of Tk.7.
Similarly, the constant term of 10,000 indicates that the manufacturer has to
produce and sell enough bags to compensate for the fixed cost of Tk.10000 before
breaking even.
Answer
b) If 2,800 bags are made and sold, then the profit is
P (4000) = 3 (4000) 10,000
=Tk.2000
= Tk. 4,000.
Answer.
c) On the other hand, if 1,000 bags are made and sold, the profit is
P (1000) = 3(1000) 10000
= Tk.7000
P (1,000) = 5(1,000) 10,000
Indicating a loss of Tk.7000.
So if 1000 bags were sold the loss will be 7000 Tk.
Answer.

d) At break-even, profit will be 0. Thus

P (q) = 0
Or, 3q 10,000 = 0
Or, q = 10,000/3
= 3333 bags.
So, if 3333 bags were made and sold the break-even will occur.
Answer.
e) Finally, the break-even sales volume (revenue) is
R (3333) = (10) (3333)
= Tk.33330
Answer.

BREAK EVEN CHARTS:

Returning to the revenue and cost functions of the last example,
R (q) = 10q and C (q) = 7q + 10,000
And plotting these in the usual manner, we obtain the graphs shown below. We can
observe that the revenue line goes through the origin and that the cost line has a y-

intercept of Tk.10, 000. The dotted horizontal line shows that this fixed cost is
constant at all levels of operation. The variable cost, which is the 7q in the cost
function (not the Tk.7 variable cost per unit, which is constant) is the vertical
distance from the fixed cost line to the total cost line; it of course increases as more
units are produced. To the left of the break-even point (3333, Tk.33330), the cost
line is above the revenue line; the vertical separation at any point represents the
associated loss. On the other hand, to the right of the break even point, the vertical
separation represents the associated profit. Break-even charts are a helpful graphic
aid. They are frequently used in planning business operations.

The graphical presentation is given below:

Revenue and Cost

(Tk.000)

Revenue
R(q)=10q

50
0
40

(3333,33330)
Break Even
Cost
C(q)=7q+10000

30
0
20

Variable
Cost

10
Fixed Cost
1

Number of Unit (000)

Figure: Break-even

Arithmetic
Progression &
Its Application

Definition
Arithmetic progression is an important topic of mathematics. Its practical
application is seen in most of the business organizations and personal life.
Arithmetic progression is a special type of series with sequences increasing or
decreasing by an absolute quantity designated as arithmetic progression.

An arithmetic progression is a sequence whose terms increase or decrease by a

constant number called the common difference can be formed by subtracting each
term from preceding one. Thus the sequence 1, 5, 9, 13, 17, 21, 25.is an
infinite arithmetic progression of several terms, the first term is 1 and the common
difference is 4.

Thus, if the first term and common difference are known, the A.P. is completely
known. The A.P. a,(a+d),(a+2d),(a+3d), whose first term is a and the
common difference is d, is designated as the standard form of an arithmetic
progression.

The corresponding A.P. series a+(a+d)+(a+2d)+(a+3d)+...is designated

as the standard form of an arithmetic series. The abbreviation A.P. for arithmetic
progression is commonly used.
If for a sequence (Un), Un+1-Un remains constant for all natural numbers n, then
the sequence is called the A.P. and the numerical difference between two
consecutive, terms n and Un+1, is called the common difference of the A.P.

The nth term of an A.P. Let a be the first term and d be the common difference.
Then,
First term (U1) = a
Second term (U2) = a+d
Third term (U3) = (a+d)+d=a+2d
.

Seventh term (U7)=(a+5d)+d=a+6d

.

nth term (Un) =a+(n-1)d, which is also the term indicated by L.

This nth term is called the general term of the standard A.P. can be obtained.

Sum of a series in A.P:

The sum of a series in A.P. is an important quantity which yields many other
related results. We denote the sum of n terms by Sn and the first and the last terms
of the sequence by a and l respectively.
The formula used for finding out the sum of a series in A,P is

S=n (a+L)/2 (1)

By substituting (a+(n-1)d) for L the above formula can also be written as

S=n/2(2a+(n-1)d) .(2)

Example of Arithmetic progression

Mr. Anwar Hossain works as an assistant secretary in Prime Islami Life Insurance
Company. He joined the company in 1997 after completing his MBA from Dhaka
University. After working two years he gradually realized to save money for his
future life. He discussed elaborately the matter with his friends who had already
started saving.
After getting inspiration from his friends he started saving in Popular Life
Insurance Company. He saved tk.1, 65,000 in ten years. In each year after the first
he saved tk.1000 more than he did in the preceding year. He saved tk.12000 in the
first year. To find his saving in the first year he used the summation formula of
Arithmetic Progression.

Problem:
Anwar Hossain saved tk.160, 500 in 10 years. In each year after the first he saved
tk.1000 more than he did in the preceding year. How much did he save in the first
year?

Solution:
This problem can be solved by using arithmetic progression. At first we have to
define all the mathematic terms found in the problem.
Here,
n = number of years = 10

[This is the period of his saving i.e. he saved tk.160, 500 within 10 years. This time
period may vary from person to person.]
Again,
d = common difference = 1,000
That means in each year after the first he saved tk.1000 more than he did in the
preceding year. This amount is constant or same for the long 10 years. If it varies
then the law of arithmetic progression will not work.
Now,
Sn = Sum of money saved = tk. 16, 500
In arithmetic progression sum of amount is calculated by a special formula i.e.
Sn = n/2 [2a + (n-1) d]
Here, the sum of the amount is found out by this formula.
At last, a = saving in the first year =?
This is the amount which he first saved. This amount is to find out. To find out the
savings in the first year we have to use the formula of sum. That is
Sn = n/2 [2a + (n-1) d]
Or, 1, 65,000 = 10/2 [2a + (10-1) 1000]
0r, 165,000 = 5 [2a + 9000]
Or, 165,000 = 10a + 45000
Or, 10a = 165,000-45,000

Or, 10a = 120,000

Or, a = 120,000/10
Or, a = 12,000
Here,
n = number of year
a = saving in the first year
Sn = summation
d = common difference
Therefore,
a = savings in the first year = 12,000
So Mr. Anwar Hossain saved tk. 12,000 in the first year.
Answer.

Geometric
Progression &
Its Application

Definition
A geometric Progression is a sequence whose term increase or decrease by a
constant called common ratio. A series is geometric progression thus is a
multiplicative series whose common ratio can be found by dividing any term by its
preceding term.

Thus the sequence 1, 2, 4, 8, 16, 32.. is an infinite geometric progression, the

first term is 1 and the common ratio is 2.

If for a sequence, un+l remains constant for all natural numbers n, then the
sequence is called G.P.

We can also state the series as,

Sn = a+ar+ar2+ar3+. +ar n-3+ar n-2+ar n-1

Sum of a series in G.P:

The sum of n terms of a series is G.P. can be found out using the following formula
:
Sn = a (rn-1)/r-1, when r>1
Or, Sn =a(1-rn)/1-r,when 1>r

Example of Geometric Progression

If the value of spinning machine of

Padma Poly Cotton Knit Fabrics Ltd.

depreciated by 25 percent annually, what will be its estimated value at the end of 8
years if its present value is Tk. 204800 ?

Solution:
Geometric progression can be used to solve the problem. After simplifying the
problem partially we can use geometric progression. At first we have to define all
the terms given in the problem. That will help us to calculate the problem properly.
Here,
Present value of car = Tk. 204800
Present value means the value which is available now i.e. which is not depreciated
through use.
Again,
Value of machine deprecated annually =25%

We know, after using a machine or assets it is depreciated day by day. So the

Spinning machine is also depreciated by 25 percent annually.
Here, n = number of years = 8

Now, If the present is 100, then value after one year = Tk. 75
If the present is 1, then value after one year

= 75/100

If the present is 204800 then value =Tk. (75/100)*204800

=Tk. 153600
a=1536000

We also note that values at the end of second, third, fourth, fifth, sixth, seventh and
eighth years from a G.P. with common ratio, = 75/100 =
Common ratio is a fundamental characteristic of G.P. on the other hand common
difference is for A.P.
Now, value at the end of eight year can be found out by using the formula from
G.P.
The formula is ar n-1
Therefore, ar n-1
=ar 7
=153600 ( 3/4)7

= Tk. 20503.125
So, the estimated value will be Tk. 20503.125 at the end of 8 years.
Answer.

LOGARITHM

& Its
Application

Mr. Islam bought a photocopier on July1, 2006 cost Tk.120000 by borrowing the
amount from a financial company. Here we have used logarithm for calculating the
interest.
The logarithm of a number to a given base is the index or the power to which the
base must be raised to produce the number.
So, this loan will be paid after 5 years. Interest rate for this loan is 10% and
interest will be compounded quarterly but interest will be paid yearly.
Interest Calculation on Dec 31, 2010
Here,
Principal, P = Tk. 120000
Interest Rate, i = 10%=0.1
Years = 3.5 years
Number of time interest compounded within a year, m = 4
A = P (1+i/m)mn

=) A = 120000(1+.1/4)4*3.5
=) A = 120000(1+0.025)14
=) A = 120000(1.025)14
=) log A = log 120000 + 14 log 1.025 (taking logarithm on both sides)
=) log A = 5.0792 + 0.1502
=) log A = 5.2294
=) A = antilog 5.2294
=) A = 169590
So compound interest on December 31, 2010 = 169590- 120000
= Tk. 49590
Calculation of total payment:
A = P (1+i/4)mn
=) A = 120000(1+0.1/4)4*5
=) A = 120000(1+0.025)20
=) A = 120000(1.025)20
=) log A = log 120000+ 20 log 1.025 (taking logarithm on both sides)
=) log A = 5.0792 + 0.2145
=) log A = 5.2937
=) A = antilog 5.2937
=) A= 196653
So Mr. Islam will have to pay total Tk. 196653

And total interest will be paid by Mr. Islam, = 196653-120000

=Tk.76653
Advantage:
Some advantages of the logarithm are:
We can easily do the big digit mathematics by the use of logarithm rather we
use other mathematical application or without any mathematical application
It saves our valuable time by calculating easily.

BREAK-EVEN POINT ANALYSIS IN THE CASE

Break Even Point is a way for a manager to make sure he or she is making a profit
is to first analyze the circumstances necessary to Break Even. Break Even means
neither makes a profit nor suffer a loss. Then the manager can develop a plan to do
better than break even. Break Even simply means that revenues must equal costs.
So since then at break even means that
Profit= Revenue Cost
Revenue = Cost
Profit = 0
As our book house is not a production based business we should consider breakeven point at the view of a company that purchases product and sells them at a
price that is presumably above the cost.
For example our book house cost a book 150 tk but it retail price would be 200 tk.
Therefore, the Markup is 50 tk.
Markup = Retail price Cost

From the managers view point the dollar amounts of markup on numerous
individual items which will vary widely are very useful in planning and controlling
operations what is useful is the overall markup percentage on all items. For
comparability in different items, markup is viewed in one of the two ways, a
function of the cost or a function of the retail price.
So in current example
Markup = markup / cost
=50/150 =.33 =33%
On other hand, in financial statements, accounts use the concept of margin, which
is the mark up percentage on retail price, in this example,
Margin = markup / retail price
=50 / 200 = .35 =35%
In our book house we use the concept of Margin. Here our average cost of books is
130 and the retail price is 200.
So, Margin = markup / retail price = 70 / 200 = .35 =35%
To find out the Break-even Point we need the Cost function, Revenue function and
the Profit Function.
Let S is the quantity of the product.
So the Cost function would be:
C(S) = FC. + VC.
Here FC. is Fixed Cost and VC. is Variable Cost.
The Revenue function would be:
R(S) = P*S
Here P is the Price or retail price.

We know the profit is the difference between the revenue ant costs, so the Profit
function would be:
P(S) = R (S) C(S)
Now, the fixed costs of our books are
1. the depreciated value of the furniture and equipment in 2010 ( 5000 )
2. the yearly fare of the room of the shop ( 60000 )
3. the depreciated value of the photocopy machine in 2010 (8000 )
4. The yearly salary of the salesman(36000)
So the total FC. is =1, 09, 000
Let the quantity of the product is = S
Per unit selling price is = 1 Tk
So, the Revenue function:
R(S) = 1 * S
Our margin is = 35%
So, the cost of goods sold or the total cost = 1 .35 =.65
Total cost function:
C(S) = FC. + VC.
= 109000+.65 * S
So the Profit Function:
P(S) = R(S) C(S)
= S .65S 109000
In break-even point profit will be 0.

 .35S -109000 = 0
.35S = 109000
S = 109000 / .35
S = 311430
So S= 3, 11, 430 is the break-even sales taka volume.
So he should sell tk.311430 to get breakeven point.
So to earn profit he needs to sale more than tk.311430 of products.

Set Theory

& Its
Application

Theory of Sets
Set theory is a mathematical abstract concerned with the grouping of sets of
numbers that have commonality.
A Set is a collection of well defined & well-distinguished objects. It is
almost a convention to indicate sets by capital letters ; like A,B,C etc. and to
enclose is elements by Second Bracket {}.
Characteristics of Sets :

 It should be well defined and

Its members or elements should be well-distinguished for easy

recognition by description.
For example:
Set of natural numbers
Set of whole numbers

= {1,2,3,..}
= {0,1,2,3,..}

Each object is called an element of the set.

The set that contains all the elements of a given collection is called the universal
set and is represented by the symbol , pronounced as mu.
For two sets A and B,
n(AB) is the number of elements present in either of the sets A or B.
n(AB) is the number of elements present in both the sets A and B.
n(AB) = n(A) + (n(B) n(AB)
For three sets A, B and C,
n(ABC) = n(A) + n(B) + n(C) n(AB) n(BC) n(CA) +
n(ABC)

Consider the following example:

Question: In a class of 100 students, 35 like science and 45 like math. 10 like both.
How many like either of them and how many like neither?
Solution:
Total number of students, n() = 100

Number of science students, n(S) = 35

Number of math students, n(M) = 45
Number of students who like both, n(MS) = 10
Number of students who like either of them,
n(MS) = n(M) + n(S) n(MS)
45+35-10 = 70
Number of students who like neither = n() n(MS) = 100 70 = 30

The easiest way to solve problems on sets is by drawing Venn diagrams, as shown
below.

As it is said, one picture is worth a thousand words. One Venn diagram can help
solve the problem faster and save time. This is especially true when more than two
categories are involved in the problem.

Let us see some more solved examples.

Problem 1: There are 30 students in a class. Among them, 8 students are learning
both English and French. A total of 18 students are learning English. If every
student is learning at least one language, how many students are learning French in
total?
Solution:
The Venn diagram for this problem looks like this.

Every student is learning at least one language. Hence there is no one who fall in
the category neither.
So in this case, n(EF) = n().
It is mentioned in the problem that a total of 18 are learning English. This DOES
NOT mean that 18 are learning ONLY English. Only when the word only is
mentioned in the problem should we consider it so.
Now, 18 are learning English and 8 are learning both. This means that 18 8 = 10
are learning ONLY English.
n() = 30, n(E) = 10

n(EF) = n(E) + n(F) n(EF)

30 = 18+ n(F) 8
n(F) = 20
Therefore, total number of students learning French = 20.
Note: The question was only about the total number of students learning French
and not about those learning ONLY French, which would have been a different
answer, 12.
Finally, the Venn diagram looks like this.

Problem 2: Among a group of students, 50 played cricket, 50 played hockey and

40 played volley ball. 5 played both cricket and hockey, 10 played both hockey and
volley ball, 5 played cricket and volley ball and 10 played all three. If every
student played at least one game, find the number of students and how many
played only cricket, only hockey and only volley ball?
Solution:
n(C) = 50, n(H) = 50, n(V) = 40
n(CH) = 5

n(HV) = 10
n(CV) = 5
n(CHV) = 10
No. of students who played atleast one game
n(CHV) = n(C) + n(H) + n(V) n(CH) n(HV) n(CV) + n(CHV)
= 50 + 50 + 40 5 10 5 + 10
Total number of students = 130.
No. of students who played only cricket = n(C) [n(CH) + n(CV) +
n(CHV)] = 50 (5+5+10) = 30.
No. of students who played only hockey = n(H) [n(CH) + n(HV) +
n(CHV)] = 50 (5+10+10) = 25.
No. of students who played only volley ball = n(V) [n(HV) + n(CV) +
n(CHV)]=40-(10+5+10) = 15.

Alternatively, we can solve it faster with the help of a Venn diagram.

The Venn diagram for the given information looks like this.

Subtracting the values in the intersections from the individual values gives us the
number of students who played only one game.

Coordinate
Geometry
& Its
Application

Definition
Coordinate geometry is one of the most important and exciting ideas of
mathematics. In particular it is central to the mathematics students meet at school.
It provides a connection between algebra and geometry through graphs of lines and
curves. A system of geometry where the position of points on the plane is described
using an ordered pair of numbers.
Recall that a plane is a flat surface that goes on forever in both directions. If we
were to place a point on the plane, coordinate geometry gives us a way to describe
exactly where it is by using two numbers.

What are coordinates?

To introduce the idea, consider the grid on the right. The columns of the grid are
lettered A,B,C etc. The rows are numbered 1,2,3 etc from the top. We can see that
the X is in box D3; that is, column D, row 3.
D and 3 are called the coordinates of the box. It has two parts: the row and the
column. There are many boxes in each row and many boxes in each column. But
by having both we can find one single box, where the row and column intersect.
The Coordinate Plane

In coordinate geometry, points are placed on the "coordinate plane" as shown

below. It has two scales - one running across the plane called the "x axis" and
another a right angles to it called the y axis. (These can be thought of as similar to
the column and row in the paragraph above.) The point where the axes cross is
called the origin and is where both x and y are zero.

On the x-axis, values to the right are positive and those to the left are negative.
On the y-axis, values above the origin are positive and those below are negative.
A point's location on the plane is given by two numbers,the first tells where it is on
the x-axis and the second which tells where it is on the y-axis. Together, they
define a single, unique position on the plane. So in the diagram above, the point A
has an x value of 20 and a y value of 15. These are the coordinates of the point A,
sometimes referred to as its "rectangular coordinates". Note that the order is
important; the x coordinate is always the first one of the pair.
For a more in-depth explanation of the coordinate plane see The Coordinate Plane.
For more on the coordinates of a point see Coordinates of a Point

Things you can do in Coordinate Geometry

If you know the coordinates of a group of points you can:
Determine the distance between them
Find the midpoint, slope and equation of a line segment
Determine if lines are parallel or perpendicular
Find the area and perimeter of a polygon defined by the points
Transform a shape by moving, rotating and reflecting it.
Define the equations of curves, circles and ellipses.

Findings

In the report we present application of linear equation and matrix in business. After
making the report we get some findings.
Business organizations frequently use mathematics to solve their problems.
Linear equations are used to determine revenue, total and marginal cost and
to make break-even analysis by manufacturing companies.
By using Set theory we can calculate the customer demand of this product in
this market also know the position of this product in this market.
Service related company uses linear function to determine cost function and
to present the function graphically.
Linear functions also used by common business persons to make different
calculations related to business.
Arithmetic progression is used to find savings, salary & interest.
Arithmetic progression is also used to find out increase & decrease of
production.
Geometric progression is commonly used in depreciation.

Conclusion

Today mathematics has become an essential part of business. So the necessity of

mathematics cannot be denied. To solve the problems of business we can see that
there had been developed a new way of mathematics which we named business
math. Mathematics provides a system of logic that is helpful for analyzing many
theoretical and practical problems in any type of business related problems as we
have seen in the report where we solved many business related problems using
mathematical tools.
Mathematics has been used in business for many years but its use is increasing in
the business day by day. Business peoples are finding the more way how to solve
more problems by using mathematical tools and how to reduce the complications
of business problems. And we show this in a practical way that business problems
can be solved by mathematical tools.