FIA- Contemporary Business Mathematics BASIC ARITHMETIC

TABLE OF CONTENTS – PMTH001

1. BASIC ARITHMETIC ……………………………………………………..…….. 1

2. FRACTIONS, DECIMALS & PERCENTAGES ............................................. 20

3. RATIOS, RATES & PROPORTIONS ..................................................................... 34

4. SIMPLE INTEREST & COMPOUND INTEREST .......................................... 55

5. GROWTH & DECAY .......................................................................................... 88

6. ALGEBRAIC TECHNIQUE ................................................................................ 106

7. STRAIGHT LINE GRAPH ............................................................................... 118

8. LINEAR INEQUALITIES AND OPTIMIZATION ........................................... 149

9. ANSWERS ………………………………………………………………………… 173

10. EXAM PAPER (JANUARY 2016) ………………………………………………. 195

11. EXAM PAPER (MARCH 2016) ………………………………………………… 209

12. EXAM PAPER ANSWER (JANUARY 2016) …………………………………. 225

13. EXAM PAPER ANSWER (MARCH 2016) ………………………………….... 238

FIA- Contemporary Business Mathematics BASIC ARITHMETIC

CHAPTER 1

BASIC ARITHMETIC

By the end of this chapter, student should be able to:

1. Understand the flow of order of operations according to the BODMAS rule.

2. Differentiate the difference between rounding and estimation.
3. Analyse, observe and solve real life basic arithmetic problems.

___________________________________________________________________

1.1 Order of Operations

BODMAS rule

B Brackets first
O Orders (i.e. Powers and Square Roots, etc.)

DM Division and Multiplication (left-to-right)

AS Addition and Subtraction (left-to-right)

1. Perform operations inside of parentheses first. If there is more than one set
of parentheses, start with the innermost set.
2. Evaluate powers and roots in order from left to right.
3. Perform all multiplications or divisions in order from left to right.
4. Perform all additions or subtractions in order from left to right.

( ) → powers → roots → from left to right ÷ × → +

-

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FIA- Contemporary Business Mathematics BASIC ARITHMETIC

Exercise 1.1
Using your calculator, solve the following and provide your answer correct to 2
decimal places.

1. 6 + 10 ∙ 2 4937
10. √ − (4.7 × 23)
2 3
2. 11 − 2
11. (7 − 5)2
3. (11 − 2)2
4. 41 − (13 + 8) 12. √121 + 3(8 − 3)

5. (8 + 4) ∙ 6 13. 36 ÷ (22 + 5)
14. 80 − (20 ÷ 4) + 6
6. 9 + 15 ÷ √25
15. (51 − 48) ∙ 3 + 72
7. 55 ÷ 11 ∙ 5
8. 33 − 23 16. (√36 + 11) − (31 − 16)

−23+√92 −4(3)(2) 17. 80 ÷ (92 − 7 ∙ 11)2

9. 2(58)
18. 108 ÷ (33 − 6 ∙ 4)2

1.2 Rounding up
Rounding up and its steps
Step 1 Locate the place to which the number is to be rounded. Draw a line
under that place

Step 2 Look at the next digit to the right.

If it is 5 or more → increase the underlined digit by 1
If it is less than 4 → no change

Examples of rounding up.

Example Round up to Answer
i. 6.422 1 dp 6.4
ii. 6.4872 2 dp 6.49
iii. 6.997 2 dp 7.00
iv. 6.65000 1 dp 6.7
v. 7.485 2 dp 7.49
vi. 6.7550 2 dp 6.76
vii. 8.995 2 dp 9.00
viii. 6.6501 1 dp 6.7
ix. 7.4852007 2 dp 7.49

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

Rounding Up and the terms:

Terms Zeroes Decimal Places

Tenths 10 1 dp
Hundredths 100 2 dp
Thousandths 1000 3 dp

Exercise 1.2 a
Round Up 75,633,456.78919 to the nearest :
Millions 76 million
Hundred thousands
Ten thousands
Thousands 75,633,000
Hundreds
Tens
Tenths
Hundredths 75,633,456.79
Thousandths

THINKING BOX

What does nearest cent mean?

How many decimal places is that?

Exercise 1.2 b

Values Round up to Answer

5760 cm The nearest meter
$2859.4873 To the nearest cent
$2859.4873 To the nearest ten cents
$2859.4873 To the nearest dollar
1005.68 cm To the nearest hundredths of a meter
1008.2556m To the nearest km

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

1.3 Estimation

As you walk around and live your life wouldn't it be good if you could easily estimate:

• how much a bill would be,

• which product was the best value for money
• make estimates such as lengths and angles?

Also, wouldn't it be good if you could quickly guess how many people were in a room, how
many cars in the street, how many boxes on the shelf, or even how many seagulls on the
beach?

We are not talking exact answers here, but answers that are good enough for your life.

Exact vs Estimate

= In mathematics we often stress getting an exact answer. ≈

Equals But in everyday life a few cents here or there are not going Approximately
Symbol to make much difference ... you should focus on the Equals Symbol
dollars!

Estimation is.... finding a number that is close enough to the right answer.

•You are not trying to get the exact right answer

• What you want is something that is good enough (usually in a hurry!)

Why?

Estimation can save you money. Always do a quick estimation of how much
you should pay:

Example: you want to buy five magazines that cost $1.95 each. How much
money roughly should you have to buy them?

"five at $1.95 each is about 5 times 2, or about $10"

so you would need about $10 to make the purchase.

Estimation can save you time (when the calculation does not have to be
exact):

Example: you want to plant a row of flowers. The row is 58.3cm long. The
plants should be 6cm apart. How many do you need?

"58.3 is nearly 60, and 60 divided by 6 is 10,

so 10 plants should be enough."

Estimation can save you from making mistakes with your calculator:

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

Example: you are calculating 107 times 56, and the calculator shows this: 952.00

Is that right?

"107 times 56 is a bit more more than 100 times 50, which is 5,000"

Ooops! You must have typed something wrong...

... in fact you pressed 17×56 (you left out the zero), and without estimating you could have made
a really big mistake!

In fact don't trust calculators or computers...

Computers don't understand what you are doing.

So use your brain power to double-check everything

And one last important reason:

Estimation helps you focus on what is really going on.

Fun, and Good for your Brain!!!

It is actually good fun to do estimating because it keeps your mind active. As you walk around
see how good you are at estimating answers before they come up.
• At the supermarket try to add up everything yourself, and then compare it to the final bill
• Estimate how long it will take you to get home
• When shopping, see which is the better bargain by estimating the price per quantity
• and so on!
Example: You are making invitation cards. It took you 3 minutes and 20 seconds to make one
card, but you need to do 15 more ... how long will it take? Think:
"... it took a little more than 3 minutes for one card, and 3 × 15 is 45 plus a bit more ...

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

maybe 50 minutes and I will be done."

And then see how close your estimate was when you finish.
Example:
• 550 + 298: 298 is nearly 300 so an estimate is 550+300 = 850
• 550 + 248: 50+48 is nearly 100 so an estimate is 500+200 +100 = 800
In one case it seemed easy to change one number and then add.
In the other case I added the hundreds together and then increased the result by 100
So the first step is to think "how do I go about making this estimate?"

Estimating Counts, Lengths and More

Estimation is not always about doing calculations. It is important for you to be able to estimate
how many things you can see, or how long something is or how big something is.

Example: How many objects are here?

You could count them, but what if you don't need an exact answer, just one that is close enough?
Can you guess well?

Answer:

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

Exercise 1.3

Case Studies

CASE 1: Asian International Airports

Asian International Airports

1000
916
879 838
900
Number of Airplanne movements ('000)

755
800
658
700
561
600

500

400

300

200

100

0
Penang KL International Changi Suvarnabhumi Philippine Jakarta
International Airport International International Airport. International
Airport Airport Airport Airport

1. Which airport is the busiest?

2. Which airports have fewer than 700 thousand airplane movements per year?
3. How many more airplane movements per year does the Changi International Airport have
more than the Philippine Airport?
4. Which pair of airports has the most number of airplane movements? Answer to the nearest
thousands.
5. What is the average number of airplane movements in these Asian International Airports?
Answer to the nearest whole number.
6. If each airport charges $125 for airport tax for each airplane movement, how much would
each airport will earn from airport tax? Approximate your answer to the nearest million.
7. What is the average earning for the top two airports with the most airplane movement, to
the nearest hundred thousand?

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

CASE 2: XYZ Stores

State Number of XYZ Stores

Arizona 28

California 153

Florida 68

Georgia 31

Illinois 52

Indiana 30

Michigan 49

Minnesota 56

Ohio 37

Texas 91

1. Which state has the most XYZ stores?

2. Which of states listed in the table above has the fewest number of XYZ stores?
3. What is the total number of XYZ stores located in the three states with the most XYZ
stores?
4. Which pair of neighbouring states has more XYZ stores, Indiana – Illinois or Michigan –
Ohio?
5. How many XYZ stores are located in the ten states listed in the table above?
6. What is the average number of XYZ stores in the top five states with the most XYZ stores?
7. XYZ operates stores in a total of 46 states. There are 396 XYZ stores located in the states
not listed in the table above. What is the total number of XYZ stores in the United States?
8. If the cost of setting up a new store in any state is $345,584, how much would XYZ have
spent to set up all the stores in the state with the least number of stores? Approximate your
answer above to the nearest hundred thousand.

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

CASE 3: Advertisement Expenses

Advertiser Amount spent on TV Ads in 2000

DaimlerChrysler AG $826,194,200

General Motors Corp $582,432,300

Ford Motor Co. Dealers Association $410,105,200

Ford Motor Co $305,798,500

Honda Motor Co. Ltd $305,089,900

Verizon Communications $287,416,500

Nissan Motor Co. Ltd $245,449,700

Toyota Motor Corp $225,498,300

McDonald's Corp $223,790,000

General Mills Inc. $199,736,600

1. Which companies spent more than $500 million on television ads?
2. Which companies spent fewer than $300 million on television ads?
3. How much more money did DaimlerChrysler AG spend on television ads than General
Motors Corp? Give your answer to the nearest million.
4. How much more money did Verizon Communications spend on television ads than
McDonalds Corp? Give your answer to the nearest million.
5. Find the total amount of money spent by both Ford Motor Co. and Ford Motor Co. Dealers
Association on television ads? Give your answer to the nearest million.
6. What is the difference in the amount spent between the highest and the lowest spender?
7. Approximate the amount of money spent on television advertising by General Motors Corp
to the nearest hundred-million?
8. What is the average amount of money spent on ads for the year by the top two companies?

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

CASE 4: PQRS Snack Menu

PQRS Snack Menu

Item Price Calorie (K cal)
Hot Dog $ 3.00 359
Hamburger $ 4.00 390
Soda $ 1.00 185
Onion Rings $ 3.00 257
French Fries $ 2.00 269
Apple $ 1.00 45
Candy Bar $ 2.00 725
Tuna Sandwich $ 3.00 264
Fruit Juice $ 2.00 189

1. If a person orders: 1 hot dog, 1 hamburger, 1 order of onion rings, 1 soda and 1 fruit juice.
How much will his order cost?
2. A hungry college student is debating between the following two orders:
a. A hamburger, an order of onion rings, a candy bar and a soda.
b. A hotdog, an apple, an order of French fries and a fruit juice.
Which order will be cheaper? By how much?
3. A family of four is debating between the following two orders:
a. 4 hotdogs, 2 tuna sandwiches, 4 orders of onion rings, 2 sodas and 2 fruit juice
b. 4 hamburgers, 4 orders of French fries, 2 apples and 4 fruit juice.
Will the family save any money by order (b) instead of (a)? If so, how much?
4. The calorie intake for an average male teenager is 800 Kcal per meal based on the choice
of orders in question 2; calculate the total calorie intake for each of the option. Which
order will be sufficient in terms of calorie intake for the student?
5. The family of four consists of a father, mother, a boy and a girl and their recommended
calorie intake per meal is 950, 850, 750 and 730 respectively. Based on the option of
orders in question 3, which option will be sufficient to meet the total calorie intake of the
family? Did the choice of order exceed the calorie intake? If yes, by how much?

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

6. Alvin has $42 and wants to buy lunch for him and his girlfriend. Make up an order
consisting of a main item (sandwich, burger or hotdog), a side order (onion rings or French
fires), a drink and desert (apple or candy bar) for him and his girlfriend so that he has
enough money left over for 2 movie tickets which cost $12 each. Please note that his
girlfriend does not drink soda and loves onions. Please also note that they need to choose
different food items of each type so that they may share their meals with each other.

CASE 5: Population

Populations of the ten largest cities in the United States

Rank City 2000 1990
1 New York, NY 8,008,278 7,322,564
2 Los Angeles, CA 3,694,820 3,485,398
3 Chicago, IL 2,896,016 2,783,726
4 Houston, TX 1,953,631 1,630,553
5 Philadelphia, PA 1,517,550 1,585,577
6 Phoenix, AZ 1,321,045 983,403
7 San Diego, CA 1,223,400 1,110,549
8 Dallas, TX 1,188,580 1,006,877
9 San Antonio, TX 1,144,646 935,933
10 Detroit, MI 951,270 1,027,974

1. Find the increase in population for Phoenix, Arizona from 1990 to 2000.
2. Which state has recorded the most decrease in population from 1990 to 2000?
3. Which state has recorded the highest increase in population from 1990 to 2000?
4. Which state has recorded the least increase in population from 1990 to 2000?
5. What is the average change in population in all the ten states from 1990 to 2000?
Approximate your answer to the nearest thousand.
6. Which was the least populous city in 1990?

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

CASE 6: World Export

World Export Value (US$ million)

Country 1988 1998 2008
Germany 345,023 543,752 1,465,215
China 47,516 183,752 1,428,488
United States 322,427 682,138 1,300,532
Japan 264,856 387,927 782,337
Netherlands 103,213 213,977 633,974
France 167,787 320,631 633,974
Italy 127,859 245,801 539,727
United Kingdom 145,165 273,949 457,983
Canada 117,105 214,327 456,420
Republic of Korea 60,696 132,313 422,007
Hong Kong 63,493 174,864 370,242
Singapore 39,306 109,895 338,176
Spain 40,341 111,973 268,108
Switzerland 50,704 78,856 200,387

1. Which country has recorded the highest increase in exports from 1988 to 1998?
2. Which country has recorded the highest increase in export from 1998 to 2008?
3. Which country has recorded the highest increase in export from 1988 to 2008?
4. Which country has recorded the least increase in export from 1988 to 1998?
5. Which country has recorded the least increase in export from 1998 to 2008?
6. Which country has recorded the least increase in export from 1988 to 2008?
7. Rank the countries from the highest exporter to the lowest for 1988, 1998 and 2008. Which
countries have maintained the position among the top three for 1988, 1998 and 2008?
8. How many times more is Germany’s export as compared to Spain for 1998? Approximate
your answer to the nearest unit.

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

Exercise 1.4

Estimate the sum or difference by rounding each number to the nearest ten
1. 29 + 35 + 42 + 16
2. 62 + 72 + 15 + 19
3. 649 − 272
4. 555 − 235

Estimate the sum or difference by rounding each number to the nearest hundred.
5. 1812 + 1776 + 1945
6. 2010 + 2001 + 1984
7. 1774 − 1492
8. 1989 − 1870
9. 2995 + 1649 + 3940
10. 799 + 1655 + 271

11. The number of the active duty U.S. Air Force personnel level in year 2000 is 355,654.
Estimate to the nearest thousand. (Source: U.S. Department of Defence)

12. The average salary for a Major League baseball player during the 2001 season was
$2,264,403. Round this average salary to the nearest hundred-thousand.
(Source: Major League Baseball Players Association)

13. Campo Appliance Store advertises three refrigerators on sale at $799, $1299, and $999.
Round each cost to the nearest hundred to estimate the total cost.

14. In 2000 the population of Chicago was 2,896,016, and the population of Philadelphia was
1,517,550. Round each population to the nearest hundred-thousand to estimate how much
larger Chicago was than Philadelphia. (Source: U.S. Census Bureau, 2000 census)

15. In the 1964 presidential election, Lyndon Johnson received 41,126,233 votes and Barry
Goldwater received 27,174,898 votes. Round each number of votes to the nearest million
to estimate the number of votes by which Johnson won the election.

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

16. Head Start is a national program that provides development and social services for
America’s low-income preschool children ages three to five. Enrolment figures in Head
Start programs showed an increase from 750,696 children in 1995 to 857,664 children in
2000. Round each number of children to nearest thousand to estimate this increase.
(Source: Head Start Bureau)

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

Exercise 1.5

1. Since the introduction, the number of LEGO building bricks that have been sold is equivalent
to the world’s current population of approximately 6 billion people owning 52 LEGO bricks
each. About how many LEGO bricks have been sold since their introduction? (Source: LEGO
Company)

2. In April 2001, the average weekly pay for a production worker in the United States was $486
per week. At the rate, how much would a production worker have earned working a 52-week
year? (Source: U.S. Bureau of Labour Statistics)

3. The May Department Store Company operates Lord & Taylor, Foley’s, Filene’s, Kaufmann’s
and other department stores around the country. It is also operates 55 Robinsons-May stores
in California, Nevada, and Arizona. In 2000, Robinsons-May hand sales of $2,200,000,000.
What is the average amount of sales made by each Robinsons-May store? (Source: The May
Department Stores Company)

4. In 2000, the average weekly pay for a financial records processing supervisor in the United
States was $640. If such a supervisor works 40 hours in one week, what is his or her hourly
pay? (Source: U.S. Bureau of Labour Statistics)

5. The enrolment of all students in elementary and secondary schools in the United States in 2008
is projected to be 54,268,000. Of these students, 16,234,000 are expected to be enrolled in
secondary schools. How many students are expected to be enrolled in elementary schools in
2008?

6. Jackson purchased a car for $16,540. He paid $2500 down and paid the rest in equal monthly
payments over a 36-months period. How much were his monthly payment?

7. Alvin has a gift voucher for $250. He wants to buy 3 sweaters at $38 each and 6 shirts at $25
each. Will the voucher be sufficient to pay for this purchase? If not, how much does he need
to top up?

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

8. The Meish’s yard is in the shape of a rectangle and measure 50 feet by 75 feet. In their yard,
they have a rectangular swimming pool that measures 15 feet by 25 feet. How much of their
yard, in feet2, is not part of the swimming pool?

9. In 2001, there were about 500 Hilton Hotels worldwide with a total of 147,667 guestrooms.
Round the number of guestrooms to the nearest thousand to estimate the average number of
guestrooms per hotel.

10. Alexis wants to buy moulding for a room that is 12 ft by 11 ft. No moulding is needed for the
doorway, which measure 3 ft. If moulding costs $2 per foot, how much money will it cost?

11. A textbook company ships books in boxes containing a maximum of 12 books. If a bookstore
orders 1250 books, how many boxes will be needed?

12. Marc pays for an $84 dinner with $20 bills. How many bills must he use? How much change
will he receive?

13. You are given the task of determining the cost of a banquet for ninety-seven community
leaders. The hall will cost $290. The meal will consist of a steak at an estimated cost of $10;
a baked potato at $3; vegetable, relish dish, beverage, and roll at $6. Determine the total cost
of the banquet rounded off to the nearest hundred dollars.

14. At the beginning of the month, the Gene Robins Company had 422 units of a product,
“Talson,” on hand. The company purchased another 960 pieces during the month at a cost of
$1.40 per unit. Forty pieces of the new shipment were found to be defective and were returned
to the seller. During the month, the company sold 865 units. If the company sells each unit for
$2.60,
a. How much profit will be made on the units sold?
b. How much profit would be made if all of the acceptable units remaining were sold?

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

Past Year Questions

1. A local theme park collected $663,750 in June on ticket sales.
a. If 35,400 people attended the park, what was the average price per ticket?
b. If, on average, each person spent $4.70 on food, how much did the park make on
sale of food?
c. What was the total revenue collected for the sale of tickets and food?
d. Approximate the total revenue collected to the nearest hundred thousand dollars.

2. Joann was paid $3.80 per hour for the first 3 hours and $2.00 per hour for the subsequent
hours while working in Nexus Solutions as a data entry clerk. She worked for 5 hours on
Monday, 3 hours on Tuesday, 4 hours on Wednesday, 2 hours on Thursday and 5 hours on
Friday. What is her average daily wages for the 5 days to the nearest 10 cents?

3. The odometer of your car reads 33,013.4 km. You live in Klang, and you need to travel to
the East coast with your friend. You pick up your friend in Sunway and head for
Kemaman, but en-route, you make a pit-stop at Kuantan to have lunch. When you reach
Kemaman, you park your car in the hotel till you need to leave the next day. The distance
between the points of travel is shown in the table below.
From To Distance (km)
Sunway Kuantan 325.75
Sunway Kemaman 449.25
Sunway Klang 32.50
What is the reading on the odometer, to the nearest km, when you arrive at your
destination in Kemaman?

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

4. Answer the questions below based on the chart given.

Price per Share, XYZ , 2010
May 20:
RM5.261

May 18:
RM4.977
March 16:
RM3.986

April 10:
RM3.979

(Source: http://biz.thestar.com.my)
The graph above shows the price per share of XYZ over the last 3 months. Vincent has invested
in the KLSE buying XYZ shares.

a. Vincent bought 5,000 XYZ shares on 16th March and sold it on 18th May. However, if he
had waited 2 days and had sold the shares on May 20 instead, how much more profit (loss)
would he have incurred?

b. Vincent predicts the XYZ will increase in price over the next few months and he buys
another 3,000 XYZ shares on April 10th for RM3.979 per share. What is the average price
per share now, based on 8000 shares to the nearest thousandth of a ringgit?

c. If Vincent wants to make a total of RM22,000 in profit from the sales of all his 8000 shares,
at what price per share would be have to sell all of it for?
(Answer in thousandths of a ringgit)

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

By the end of this chapter, YOU should be able to:

✓ Understand the flow of order of operations according to the BODMAS rule.

✓ Differentiate the difference between rounding and estimation

✓ Analyse, observe and solve real life basic arithmetic problems.

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

CHAPTER 2

FRACTIONS, DECIMALS & PERCENTAGES

By the end of this chapter, students should be able to:

1. Know how to word fractions and decimals.

2. Convert between fractions, decimals and percentage.
3. Solve word problems regarding fractions, decimals and percentage.

___________________________________________________________________________

2.1 Fractions

𝑎
A fraction is written in the form: 𝑏

Where a is called the numerator and b is called the denominator.

Fractions

Fractions Examples
Proper fraction 2 1 3
, and
3 4 5

Improper fraction 3 7 31
, and
2 4 9
Mixed Numbers 2 5
13 , 27

Decimals, Fractions and Percentages are different ways of showing the same value:

A Half can be written...

As a fraction: 1/
2

As a decimal: 0.5
As a percentage: 50%

Three Quarters can be written...

As a fraction: 3/
4
As a decimal: 0.75
As a percentage: 75%

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

Now you try!!!!

1. Three fifths

2. Five Eighths

Example Values

Here is a table of commonly occurring values shown in Percent, Decimal and Fraction form:

Percent Decimal Fraction Fraction in words

1% 0.01 1 one hundredth
100
5% 0.05 1 one twentieth
20
10% 0.1 1 one tenths
10
12½% 0.125 1 one eighth
8
20% 0.2 1 one fifth
5
25% 0.25 1 one fourth or a quarter
4
331/3% 0.333... 1 one thirds
3
50% 0.5 1 half
2
75% 0.75 3 three quarters
4
80% 0.8 4 four fifths
5
90% 0.9 9 nine tenths
10
99% 0.99 99 ninety-nine hundredths
100
100% 1

125% 1.25 5 one and a quarter

4
150% 1.5 3 one and a half
2
200% 2

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

2.2 Conversions

Let’s draw lines to see the conversions we are going to learn!!

Percentage Fraction

Decimal

Percentage to Fraction Divide by 100 as fraction 80 4

80% = =
100 5
and simplify

Percentage to Decimal Divide by 100 80

80% = = 0.8
100

Fraction to Percentage Multiply by 100 𝟐 𝟐

= × 𝟏𝟎𝟎 = 𝟒𝟎%
𝟓 𝟓

Fraction to Decimal Divide the numerator with 𝟒

= 𝟎. 𝟖
𝟓
the denominator

Decimal to Percentage Multiply by 100 𝟎. 𝟑𝟕𝟓 = 𝟎. 𝟑𝟕𝟓 × 𝟏𝟎𝟎

= 𝟑𝟕. 𝟓%

Decimal to Fraction Divide the decimal with the 𝟑𝟕𝟓 𝟑

𝟎. 𝟑𝟕𝟓 = =
𝟏𝟎𝟎𝟎 𝟖
appropriate denominator

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

2.3 Decimals

Decimals fractions are a special way of writing proper fractions that have denominators
beginning with 1 and ending with one or more zeros. Thus, when written as decimal
fractions,

1 2 3 4 5
= 0.1 , = 0.02 , = 0.003 , = 0.0004 , = 0.00005
10 100 1000 10000 100000

The period before the digits is the decimal point; the digits following it stand for certain decimal
places. The word decimal means relating to the number 10. To calculate fractions by decimals is
simply to extend into the field of fractions the same method of counting when dealing with whole
numbers. Read the number after the decimal point as a whole number and give it the name of its
last decimal place.

0.135 is read as one hundred thirty-five thousandths or point one-three-five

4.18 is read as four and eighteen hundredths or four point one-eight

Place of Digit How to Read Example

First decimal place Tenths 3
0.3 is
10
Second decimal place Hundredths 3
0.03 is
100
Third decimal place Thousandths 3
0.003 is
1000
Fourth decimal place Ten thousandths 3
0.0003 is
10000
Fifth decimal place Hundred thousandths 3
0.00003 is
100000

What is One seventy fifths?

What is Three fifths?

What is three and three fifths?

23
FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

One hundred thirty-five thousandths and

One hundred thirty five-thousandths is different.

How?

LOOK CLOSELY:

One hundred thirty-five thousandths = 135 / 1000

One hundred thirty five-thousandths = 130 / 5000

2.4 Increase and Decrease in percentage

𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑉𝑎𝑙𝑢𝑒
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝐶ℎ𝑎𝑛𝑔𝑒 = × 100
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑉𝑎𝑙𝑢𝑒

Examples

Example 1: Ann works in a supermarket for $10.00 per hour. If her pay
is increased to $12.00, then what is her percent increase in
pay?
Analysis: Determine change in value & original value.
Solution: 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑣𝑎𝑙𝑢𝑒 2
= = 0.20 = 20%
𝑜𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 10
Answer: The percent increase in Ann's pay is 20%.

Example 2: The staff at a company went from 40 to 29 employees.

What is the percent decrease in staff?
Analysis: Determine change in value & original value.
Solution: 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑣𝑎𝑙𝑢𝑒 11
= = 0.275 = 27.5%
𝑜𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 40

Answer: There was a 27.5% decrease in staff.

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

Example 3: At a supermarket, a certain item has increased from 75 cents

per pound to 81 cents per pound. What is the percent increase
in the cost of the item?

Solution: 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑉𝑎𝑙𝑢𝑒

𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝐶ℎ𝑎𝑛𝑔𝑒 = × 100
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑉𝑎𝑙𝑢𝑒

81 − 75
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝐶ℎ𝑎𝑛𝑔𝑒 = × 100 = 8%
75

Answer: There was an 8% increase in the cost of the item.

Example 4: Four feet are cut from a 12-foot board. What is the percent
decrease in length?

Solution: 𝑁𝑒𝑤 𝑉𝑎𝑙𝑢𝑒 – 𝑂𝑙𝑑 𝑉𝑎𝑙𝑢𝑒

𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝐶ℎ𝑎𝑛𝑔𝑒 = × 100
𝑂𝑙𝑑 𝑉𝑎𝑙𝑢𝑒
12 − 8
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝐶ℎ𝑎𝑛𝑔𝑒 = × 100 = 33.3%
12

Answer: There was a 33.3% decrease in length.

2.5 Percentage and proportion

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

When dealing with percentage and the corresponding numerical value, the concept of proportion
is very helpful.

Proportion which is applicable is:

𝑛𝑢𝑚𝑏𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟
=
% %

Example

Alan paid $360 in rent which is 30% of his monthly income. What is his monthly income?

𝑛𝑢𝑚𝑏𝑒𝑟 360 𝑥
= =
% 30 100

𝑥 = 1200

His monthly income is $1200

Note of Reminder.

26
FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

When providing your final answers, please note the following:

4 1
0 Fractions → Simplest form ( 8 = )
2

0 Decimals → always 4 decimal place, if no measurement units

Example: 0.2758

→ if there are measurement units, then 2 decimal place with units.

Example: 0.25m

→ if the question specifies, (eg: nearest tenth…)

0 Whole Number → If it involves discrete variables such as books, people, birds etc

0 Percentage → 2 decimal place (27.25%)

MUST follow the question requirement.

By the end of this chapter, student should be able to:

❑ Conversion of fractions to decimals & percentage

❑ Naming of decimals and fractions
❑ Rounding up to the correct place value
❑ Increase and decrease in percentage

Exercise 2.1

27
FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

1. Of the 131 students at a small private school, 42 are freshman. What fraction of the
students are freshman?

2. The United States Marine Corps (USMC) has five principal training centres in California,
three in North Carolina, two in South Carolina, one in Arizona, one in Hawaii, and one
in Virginia. What fraction of the total USMC principal training centres is located in
California?

3
3. Each turn of a screw sinks it 16 of an inch deeper into a piece of wood. Find how deep

the screw is after 8 turns.

1
4. An estimate for the measure of an adult’s wrist is of the waist size. If Jorge has a 34-
4

inch waist, estimate the size of his wrist.

1
5. A patient was told that no more than 5 of his calories should come from fat. If his diet
consists of 3000 calories a day, how many of these calories can come from fat?

1
6. Sharon is to take 3 3 tablespoons of medicine per day in 4-equally-divided doses. 1
1
tablespoon is 7 2 ml. How much medicine in ml is to be taken in each dose?

7. Movie theatre owners received a total of $7660 million in movie admission tickets, about
7
of this amount was for R-rated movies. Find the amount of money received from R-
10

rated movies.

8. An order for 125 custom-made candle stands was placed with the manager of Just for
3
You, Inc. The worker assigned to the job can produce 2 5 candle stands per hour. Using

this worker, how many work hours will be required to complete the order?

1 1
9. A nacho recipe calls for cup chedder cheese and cup jalapeno cheese. Find the total
3 2

amount of cheese in the recipe.

28
FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

1 1
10. Doug and Claudia recently drove 290 4 miles on 13 2 gallons of gas. Calculate how many

miles per gallon they get in their vehicle.

11. Mark is a tailor making costumes for a play. He needs enough material for 1 large shirt
1 3
that requires 1 2 yards of material and 5 small shirts that each require 4 yard of material.

He finds a 5-yard remnant of material on sale. Is 5 yards of material enough to make all
6 shirts? If not, how much more material does he need?

1 1
12. A recipe for chocolate chip cookies calls for 2 2 cups of flour. If you are making 1 2

recipes, how many cups of flour are needed?

141
13. In the first half of 2001, 500 of all new cars sold in the United States were imports. Write

this fraction as a percent.

14. An inspector found 24 defective bolts during an inspection. If this is 1.5% of the total
number of bolts inspected, how many bolts were inspected?

15. Vera earn $2000 per month and budgets $300 per month for food. What percent of her
monthly income is not spent on food?

16. A family was able to decrease their weekly grocery bill by 20%. Their weekly grocery
bill used to be$170. What is their new weekly grocery bill?

17. From 1998 to 2008, the number of people employed as physician assistants in the United
States is expected to increase 48% . The number of people employed as physician
assistants in 1998 was 66,000. Find the predicted number of physician assistants in 2008.

Exercise 2.2 – Review Exercise on Fractions, Decimals and Percentage

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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

1. Madeline got 28 out of 35 problems correct on an algebra exam. David got 27 out of 45
questions correct on a different algebra exam.
i. Which fractional part of the exam did each student answer correctly?
ii. Which student performed better?

2. Raymond read 720 pages of a 792-page book. His roommate, Travis, read 540 pages from
a 660-page book.
i. What fractional part of the book did each person read?
ii. Which of the roommates read a greater fraction of his book?

3. Ms Robbins’ car holds 16 gallons of fuel. If the fuel gauge indicator is at the 5/8 marker,
how many gallons of gas are left in the tank?

4. One week Nielsen Media Research reported that a new episode of C.S.I was the second
most watched television show with 9,825,000 total viewers. The following week, a repeat
episode was shown, but only 2/3 of the viewers returned to watch. How many viewers
turned in to watch the repeat episode?

5. Nancy spends ¾ hours 3 times a day walking and playing with her dog. What is the total
time she spends walking and playing with the dog each week? Provide your answer in
terms of hours and minutes.

6. Three-fifths of the students in the freshman class are female. Of these students, 5/9 are
over the age of 25. What fraction of the freshmen class is female over the age of 25?
What fraction of the freshmen class is male?

7. During the month of December, a department store wraps packages free of charge. Each
package requires two-thirds of a yard of ribbon. If Li used up a 37-yard roll of ribbon,
how many packages were wrapped?

8. If one cup is 1/16 gallon, how many cups of orange juice can be filled from 3/2 gallons?

9. A developer sells lots of land in increments of ¾ acres.

i. If the developer has 60 acres of land, how many lots can be sold?

30
FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

ii. If each lot is worth $275,000, how much will he earn from the sale of 60 acre of
land?

10. When doing her laundry, Inez added ¾ cups of bleach to 3/8 cups of liquid detergent.
How much total liquid is added to her wash?

1 1
11. In a triathlon, an athlete must swim ¼ miles, cycle 10 2 miles and run 35 miles. What is

the total distance of the competition to the nearest hundredths of a mile?

12. Richard wants to paint his barn. Determine the area that needs to be painted to the nearest
hundredths of m2. He will paint the barn door, front, back and the sides of the barn but
not the roof.

1
12 m

1
43 m

1
62 m 10 m

3
13. Justin has a budget of $14,000 to redecorate his kitchen. If he spends of the money on
28
3
a stove and 25 of the balance on a refrigerator, how much is left for the new kitchen

cabinets?

14. Joanne filled the gas tank in her car and noted that the odometer read 22,341.9 km. Ten
1
days later she filled the tank again with 43 5 litres of fuel at RM1.85 per litre. Her

odometer reading at that time was 22,799.3km.

i. How many km had she driven between the fill-ups?
ii. How many km per litre did she get?
iii. How much is the fuel consumption of the vehicle, in cents per kilometre, to the
nearest cent?

15. A cell phone plan calls for a $39.95 monthly fee and includes 450 minutes. For time on
the phone over 450 minutes, the charge is $0.40 per minute. How much is Jorge charged
for a month in which he talks for 597 minutes?
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FIA- Contemporary Business Mathematics FRACTIONS, DECIMALS & PERCENTAGE

16. Kent determines that his Ford Ranger pickup truck gets 23 miles per gallon (mpg) in the
city and 26 mpg on the highway. If he drives 110.4 miles in the city and 135.2 miles on
the highway, how much fuel will he use?

17. Curtis Landscape Maintenance Company has two different divisions: commercial and
residential. Employees spend 1,125 hours working on commercial landscapes and 375
hours working on residential landscapes. Curtis has office expenses of $8,000 that he
wants to allocate between the two divisions, based on the percentage of employees’ hours
used by each division. How much is allocated to the commercial division?

18. Peggy owns a nursery. This year she sold 195 more rose bushes than she did last year.
This represents as 12% increase over the previous year. How many rose bushes did
Peggy’s nursery sell last year?

19. Jim manages internet sales for a company that started selling its product over the internet
two years ago. Last year, company sales over the internet were only at about $500,000.
This year, sales were $625,000. Calculate the company’s increase in sales percentage
this year.

20. Ken is a bank teller. When he started this morning, his cash drawer had coins worth $86.
The coins represented only 2.5% of all the money that Ken had in his cash drawer. What
was the total value of all this money?

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FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

Past Year Question Bank

1. An antibiotic is used to treat 380 people in a clinical trial. If 342 people do not have
side effects from the antibiotic,
i. what fraction that do have side effects?

ii. what percentage of people do not have side effects?

2. Felix bought a Ford pick-up, paying $2400 as a down payment. He still owes 95% of
the selling price.
What was the selling price of the Ford pick-up?

3. Joy receives a cheque for $1614. She deposits a third of it in her savings account and
spends a quarter of the balance on a new dress. She then splits the balance equally
among herself and her two siblings. How much will each of them receive?

4. Sam uses 30% of his monthly earnings for rent and 50% of the remaining amount for
food and transportation. If he spends $525 for food and transportation, how much does
he pay for rent?

5. The City Cabs charge $1.20 for the first quarter of a mile, and $0.35 for each additional
quarter of a mile. What is the cost of a trip from the airport to the city centre, a distance
of eight and three quarter miles?

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FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

CHAPTER 3

RATIOS, RATES & PROPORTIONS

By the end of this chapter, students should be able to:

1. Ratios
i. Write ratios as fraction.
ii. Solve ratio problems involving decimals or mixed numbers.
iii. Solve ratio problems after converting units.
2. Rates
i. Write rates as fraction.
ii. Find unit rates.
iii. Find the best buy based on cost per unit.
3. Proportion
i. Determine whether proportions are true or false by using cross products
ii. Find the unknown number in a proportion.
iii. Solve application problem using proportions.

_________________________________________________________________________

3.1 Ratios

A "ratio" is just a comparison between two different things. For instance, someone can look at
a group of people, count noses, and refer to the "ratio of men to women" in the group. Suppose
there are thirty-five people, fifteen of whom are men. Then the ratio of men to women is 15 to
20.

In ratio, ORDER is important, whichever word came first; its number must come first.

If the order was "the ratio of women to men", ‘women’ came first, then it’s ‘20 to 15’.

If it was "the ratio of men to women", "men" came first. then it’s ‘15 to 20’.

This order is very important, and must be respected. The quantity mentioned first is the
numerator. The quantity mentioned second is the denominator.

Ratio has NO units but the comparison must be done in the SAME units.

34
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

Ratio must be expressed in simple form.

There are 3 ways to express ratio:

Words Ratio Fraction

"15 to 20" 15 : 20 𝟏𝟓
𝟐𝟎
Incomplete
"3 to 4" 3:4 𝟑
𝟒
Correct

You should be able to recognize all three notations. Given a pair of numbers, you should be
able to write down the ratios.

Example 1

There are 16 ducks and 9 geese in a certain park.

Express the ratio of ducks to geese in all three formats.

Consider the above park. Express the ratio of geese to ducks in all three formats.

Example 2

1. In a certain class, the ratio of passing grades to failing grades is 7 to 5. How many of
the 36 students failed the course?

2. Express the ratio in simplest form: $10 to $45

3. Express the ratio in simplest form: 240 miles to 80 miles

35
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

3.1.1 Ratios after converting units.

When a ratio compares measurements, both measurements must be in the same units. For
example, feet must be compared to feet, hours to hours and inches to inches.

If the measurement units are not the same → MAKE IT SAME.

Example 3

1. Write each ratio as a fraction in lowest terms.

a. 9 in. to 6 ft d. 3 quarts to 3 gallons

b. 2 days to 8 hours e. 25 minutes to 2 hours

c. 7 yd to 14 ft f. 4 pounds to 12 ounces

Measurement Comparisons

1 foot = 12 inches 1 gallon = 4 quarts

1 yard = 3 feet Ratio 1 hour = 60 minutes
1 pound = 16 ounces 1 day = 24 hours
→ Units must
be the same

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FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

Exercise 3.1

1. Shane spent RM14 on meat, RM5 on milk, and RM7 on fresh fruit. Write each ratio
as fraction.
a. The ratio of amount spent on fruit to amount spent on milk.

b. The ratio of amount spent on milk to amount spent on meat.

c. The ratio of amount spent on meat to amount spent on milk.

d. The ratio of amount spent on milk to the total amount spent.

2. Write each ratio as a fraction in lowest terms.

a. 9 hours to 12 hours

b. 100 cm to 5 meters

c. Width (24ft) to length (48ft) of a rectangle.

3. Write each ratio as a ratio of whole number in lowest terms.

a. The price of Tamar’s favourite brand of lipstick increased from RM5.50 to
RM7.00. Find the ratio of the increase in price to the original price.

b. Last week, Lance worked 4.5 hours each day. This week he cut back to 3 hours
each day. Find the ratio in the lowest fraction term of the decrease in hours to the
original number of hours.

37
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

4. Use the circle graph of one person’s monthly budget to complete the following
exercise. Write each ratio as a fraction in lowest terms.
RM225
Miscellaneous
RM125
Utilities

RM750
Rent RM200
Transportation

RM400
RM300 Taxes
Food

a. Find the ratio of

i. Rent to utilities
ii. Rent to food
iii. Rent and utilities to total expenses.
b. Find the ratio of
i. Taxes to rent
ii. Food to transportation
iii. Taxes and food to rent and utilities.

5. The price of automobile engine oil recently went from 𝑅𝑀10.80 to 𝑅𝑀13.50 per case
of 12 quarts. Find the ratio in fraction of the increase in price to the original price.

6. The price that a pharmacy pays for an antibiotic decreased from 𝑅𝑀8.80 to 𝑅𝑀5.60
for 10 tablets. Find the ratio of the decrease in price to the original price.

38
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS
1
7. The first time a movie was made in Minnesota, the cast and crew spent 59 2 days
3
filming winter scenes. The next year, another movie was filmed in 8 4 weeks. Find the

ratio of the first movie’s filming time to the second movie’s time. Compare in weeks.

3
8. A large horse, measures about 5 ft at the shoulder. Another smaller horse measured
4
3
only 15 4 in. at the shoulder. Find the ratio of the large horse to the smaller horse’s

height. Compare in inches. (1 feet ~ 12 inches)

39
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

3.2 Rates

A ratio compares two measurements with the same types units, such as 9 feet to 12 feet (both
length measurements). But many of the comparisons we make use measurements with different
types of units, such as the following.

160 dollars for 8 hours (money to time)

450 miles on 15 gallons (distance to capacity)

This type of comparison is called a rate.

Watch the Units
here!!

3.2.1 Write rates as fractions

When writing a rate, always include the units, such as miles, hours, dollars, and so on. Because
the units in a rate are different, the units do not divide out.

In a rate, you often find these words separating the quantities you are comparing.

‘in’ ‘for’ ‘on’ ‘per’ ‘from’

Example 4

Write each rate as a fraction in lowest term.

a. 𝑅𝑀6 for 30 packages

b. 500 miles in 10 hours

c. 4 teachers for 90 students

d. 1270 bushels from 30 acres

40
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

3.2.2 Find unit rates

When the denominator of a rate is 1, it is called a unit rate. We use unit rates frequently. For
example, you earn 𝑅𝑀12.75 for 1 ℎ𝑜𝑢𝑟 or work. This unit rate is written:

𝑅𝑀12.75 per hour or 𝑅𝑀12.75/hour

Use per or a slash (/) when writing unit rates.

Example 5

Find each unit rate.

a. 𝑅𝑀4.35 for 3 pounds of cheese

b. 304 miles on 9.5 gallons of gas

c. 𝑅𝑀850 in 5 days

d. 24 pound turkey for 15 people

41
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

3.2.3 Find the best buy based on cost per unit

When shopping for groceries, household supplies, and health and beauty items, you will find
many different brands and package sizes. You can save money by finding the lowest cost per
unit.

Cost per unit is a rate that tells how much you pay for one item or one unit.

Example 6

The local store charges the following prices for syrup. Find the best buy.

Best Buy =
Lowest Unit
Cost

12 ounces 24 ounces 36 ounces

$1.28 $1.81 $2.73

The best buy is the container with the lowest cost per unit. All the containers are measured in
ounces, so you first need to find the cost per ounce for each one. Divide the price of the
container by the number of ounces in it. Round to the nearest thousandth, if necessary.

Size Cost per Unit (rounded)

12 ounces $1.28
≈ $0.107 per ounce (highest)
12 𝑜𝑢𝑛𝑐𝑒𝑠
24 ounces $1.81
≈ $0.075 per ounce (lowest)
24 𝑜𝑢𝑛𝑐𝑒𝑠
36 ounces $2.73
≈ $0.076 per ounce
36 𝑜𝑢𝑛𝑐𝑒𝑠

Therefore, the lowest cost per ounce is $0.075, so the 𝟐𝟒 − 𝐨𝐮𝐧𝐜𝐞 container is the best
buy.

42
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

Example 7

Find the best buy (lowest cost per unit) for each purchase.

a. 2 quarts for $3.25

3 quarts for $4.95
4 quarts for $6.48

b. 6 cans of cola for $1.99

12 cans of cola for $3.49
24 cans of cola for $7

Exercise 3.2

1. Write each rate as a fraction in lowest terms.

a. 10 cups for 6 people d. 100 miles in 30 hours
b. $12 for 30 pens e. 72 miles on 4 gallons
c. 15 feet in 35 seconds f. 132 miles on 8 gallons

2. Earl kept the following record of the gas he bought for his car. For each entry, find the
number of mile he travelled and the unit rate. Round your answers to the nearest
tenth.
Date Odometer Odometer Miles Gallons Miles
at Start at End Travelled Purchased per
Gallon

2/4 27,432.3 27,758.2 15.5

2/9 27,758.2 28,058.1 13.4

2/16 28,058.1 28,396.7 16.2

2/20 28,396.7 28,704.5 13.3

43
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

3. The table lists information about three long-distance calling cards. The connection fee
is charged each time you make a call, no matter how long the call lasts. Use the table
to answer the questions below. Round answers to the nearest thousandth when
necessary.

Card name Cost per Minute Connection Fee

Radiant Penny $0.010 $0.39
IDT Special $0.022 $0.14
Access America $0.047 $0.00

i. Find the actual total cost, including the connection charge, for a five-minute call
using each card.

ii. Find the cost per minute for this 5 minute call using each card and select the
best buy.

iii. Find the actual total cost, including the connection charge, for a 30-minute call
using each card.

iv. Find the cost per minute for this 30-minute call using each card and select the
best buy.

v. All the cards round calls up to the next full minute.

a. Suppose you call the wrong number. How much would you pay for this 40-
second call on each card?

b. How much would you save on this call by using Access America instead of
Radiant Penny?

44
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

3.3 Proportions

A proportion states that two ratios (or rates) are equivalent.

For example,

$20 $40
=
4 hours 8 hours

$20 $40
is a proportion that says the rate 4 hours is equivalent to the rate 8 hours .

As the amount of money doubles, the number of hours also doubles. This proportion is read:

20 dollars is to 4 hours as 40 dollars is to 8 hours.

PROPORTION

DIRECT PROPORTION INVERSE PROPORTION

𝑦∝𝑥 1
𝑦∝
𝑥

𝑦 = 𝑘𝑥 𝑘
𝑦=
𝑥

𝑦1 𝑦2 𝑦1 𝑥1 = 𝑦2 𝑥2
=
𝑥1 𝑥2

Example: Example:

20% of the investment is worth $80. What is If it takes 3 people to complete the work in
the value of the total investment? 4 days, how long will it take 6 people to
complete the same work?

45
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

Example 8

1. If 2 pounds of fertilizer will cover 50 square feet of garden, how many pounds are
needed for 225 square feet?

2. A U.S. map has a scale of 1 inch to 75 miles. Lake Superior is 4.75 inches long on the
map. What is the lake’s actual length in miles?

3. Cough syrup is to be given at the rate of 30 millilitres for each 100 pounds of body
weight. How much should be given to a 34-pound child? Round to nearest whole
millilitre.

46
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

Exercise 3.3

Set up and solve a proportion for each application problem.

1. Caroline can sketch four cartoon strips in five hours. How long will it take her to sketch
18 strips?

2. Sixty newspapers cost 𝑅𝑀27. Find the cost of 16 newspapers.

3. If three pounds of fescue grass seed cover about 350 square feet of ground, how many
pounds are needed for 4900 square feet?

4. Tom makes 𝑅𝑀455.75 in 5 days. How much does he make in 3 days?

5. The bag of rice noodle weight six ounces makes 7 servings. At that rate, how many
ounces of noodles do you need for 12 servings, to the nearest ounce?

6. Three quarts of latex enamel paint will cover about 270 square feet of wall surface.
How many quarts will you need to cover 350 square feet of wall surface in your kitchen
and 100 square feet of wall surface in your bathroom?

7. The ratio of the length of an airplane wing to its width is 8 to 1. If the length of a wing
is 32.5 meters, how wide must it be? Round to the nearest hundredth.

8. At 3pm, Coretta’s shadow is 1.05 meters long. Her height is 1.68 meters. At the same
time, a tree’s shadow is 6.58 meters long. How tall is the tree? Round to the nearest
hundredth.

1
9. The nutrition information on a bran cereal box says that a cup serving provides 80
3

calories and 8 grams of dietary fibre. At the rate, how many calories and grams of fibre
1
are in a 2 cup serving?

(Source: Kraft Foods, Inc.)

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FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

Exercise 3.4

1. Jake sold $350 worth of his China figurines. Ramona sold $500 worth of her pottery.
What is the ratio of her sales to his?

2. Ms Wei’s new car gets 35 miles per gallon. Her old car got 25 miles per gallon. Find
the ratio of the new car’s mileage to the old car’s mileage.

3. This fall, 6000 students are taking Maths courses and 7200 students are taking English
courses. Find the ratio of Maths students to English students?

4. In his keyboarding class, Patrick can type four pages in 20 minutes. Give his rate in
pages per minute and minutes per page.

5. Elena made $24 in three hours. Give her earnings in dollars per hour and hours per
dollar.

6. Find the best buy. Minced onion

13 ounces for $2.29
8 ounces for $1.45
3 ounces for $0.95

7. Find the best buy for dog food. You have a coupon for $1 off on 25 pounds or more.
50 pounds for $19.95
25 pounds for $10.40
8 pounds for $3.40

8. The ratio of cats to dogs at the animal shelter is 3 to 5. If there are 45 dogs, how many
cats are there?

9. Danielle had 8 hits in 28 times at bat during last week’s games. If she continues to hit
at the same rate, how many hits will she get in 161 times at bat?

48
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

10. If 3.5 pounds of ground beef cost $9.77, what will 5.6 pounds cost? Round to the
nearest cent.

11. About 4 out of 10 students are expected to vote in campus elections. There are 8247
students. How many are expected to vote? Round to the nearest whole number.

12. The scale on Brian’s model railroad is 1 inch to 16 ft. One of the scale model boxcars
is 4.25 inches in long. What is the length of a real boxcar in feet?

13. Mary makes necklaces to sell at a local gift shop. She made 2 dozen necklaces in 16
1
2
hours. How long will it take her to make 40 necklaces?

14. A 180-pound person burns 284 calories playing basketball for 25 minutes. At this rate,
how many calories would the person burn in 45 minutes, to the nearest whole number?

15. In the hospital pharmacy, Michiko sees that medicine is to be given at the rate of 3.5
milligrams for every 50 pounds of body weight. How much medicine should be given
to a patient who weighs 210 pounds?

16. Nearly 7 out of 8 fans buy something to drink at rock concerts. How many of the
28,500 fans at today’s concert would be expected to buy a beverage? Round to the
nearest hundred fans.

17. Emily spent $150 on car repairs and $400 on car insurance. What is the ratio of the
amount spent on insurance to the amount spent on repairs?

18. Antonio is choosing among three packages of plastic wrap. Is the best buy 25 ft for
$0.78; 75 ft for $1.99 or 100 ft for $2.59? He has a coupon for 50 cents off for 50 feet
or more.

19. A lawn mower uses 0.8 gallon of gas every 3 hours. The gas tank holds 2 gallons.
How long can the mower run on a full tank?

49
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS
1
20. An antibiotic is to be given at the rate of 1 2 teaspoons for every 24 pounds of body

weight. How much should be given to an infant who weighs 8 pounds?

21. Charles made 251 points during 169 minutes of playing time last year. If he plays 14
minutes in tonight’s game, how many points would you expect him to make? Round
the nearest whole number.

22. A vitamin supplement for cats is to be given at the rate of 1000 milligrams for a 5kg
cat.
a. How much should be given to a 7kg cat?
b. How much should be given to an 800g kitten?

23. 3 workers build a wall in 12 hours. How long would it have taken for 6 equally
productive workers?

24. It takes 14 hours for a faucet with a flow of 18 liters per minute to fill a reservoir with
water. How long will it take if its flow is reduced to 7 liters per minute?

25. A farmer has enough cattle feed to feed 300 hens for 20 days. If he buys 100 more hens,
how long would the same amount of feed feed the total hens?

26. 4 taps can fill a larger container in 2 hours. If we use 8 taps, how long will it take to fill
the container?

27. If there are 6 builders, it takes 80 days to complete the house. How many builders must
be employed to build the house in just 16 days?

28. If 8 men can do a certain job in 12 days, how many men will be required to do the same
job in 16 days?

29. If a car traveling at the rate of 40km/h takes 10 hours to travel a certain distance, how
long would it take the same car to travel the same distance at the rate of 50km/h?

30. An army camp has provisions for 240 men for 28 days. How long will the provisions
last if only 112 men are sent to the camp?

31. If 9 men can do a piece of work in 6 days, how long will it take 12 men to do the same
work?

50
FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS
1
32. If 5 boys can decorate a hall for a program in 3 2hours, how long will it take 7 boys to

decorate it?

33. A tank of oil can be emptied in 16 minutes if 1 outlet valve is fully opened. How long
will it take to empty the tank if 2 outlet valves are fully opened?

34. A truck can transport a supply of building materials in 4 hours making 8 trips each hour.
How long would the job take if 4 trips were made each hour?

1
35. It took 20 men 2 2days to repair a street. How long might the job have taken if only 15

men had been working?

36. Five fathers from the Parent-Teacher Association spent 14 evenings helping in a project
in school. How many men could have completed the same job in 10 evenings?

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FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

Past Year Questions Bank

1. Leon sold a used computer and the original software for a total price of $2100. The
buyer found out that Leon had charged him four times as much for the computer as he
did for the software. Find out the individual price of the computer and the software.

2. Mr Dunn has expired and left his wealth, amounting to $234,000 to be distributed
among his 3 children according to their age ratio. All his sons are between twenty and
thirty years old. His eldest son’s age and youngest son’s age are prime numbers. The
total of all three son’s age is 78.
Determine how much will each son get from Mr Dunn’s wealth, to the nearest dollar?

3. Max owns an advertising company. He has received an order for a bill board and the
customer has given him a miniature model measuring 13.5cm x 7.5cm as a sample.
The local municipality’s regulation however, is that all billboards erected cannot exceed
5.4m in length or width.
a. What is the maximum size of the bill board that Max could fabricate for the
customer?
b. If Max charged $250 per square meters for the fabrication of the billboard, how
much should does this job earn him?

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FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

4. The label on the medicine bottle indicates that 6 ounces of medicine must be mixed
with 8 ounces of water. How much medicine and water must Annie mix if the doctor
has prescribed that she must take 21 ounces of solution (which contains medicine mixed
in water)?

5. Jojo is planning on renovating his house. He needs two different colours of tiles; brown
and beige, for his bathroom. He needs three times as much brown as he needs beige
for this bathroom. In addition to that, the brown tiles come in from three different
suppliers, as shown in the table below. All in all, he needs to purchase 292 pcs of tiles
for his bathroom. All tiles can be bought by the box only and only from the same
supplier.
Since Jojo needs 292 pcs of tiles, the supplier has agreed to give him discounts as
follows:

Brown tiles - Brown tiles - Brown tiles - Beige

Supplier A Supplier B Supplier C tiles
Number of tiles 6 12 24 12
in a box
Price per box $8.80 $15.00 $28.80 $21.60
Discounts 15% 10% 5% None
available

a. How many of the brown tiles and beige tiles does he need?

b. Use the price per box of tiles above and calculate the unit price of each tile.
Based on the unit price, which packaging of brown tiles seems to be the best
buy?

Why?

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FIA- Contemporary Business Mathematics RATIOS, RATES & PROPORTIONS

By the end of this chapter, student should be able to learn:

Ratios
❑ Write ratio as fraction
❑ Conversion of units
Rates
❑ Write rates as fraction
❑ Find unit rates
Proportion

❑ Solve application problem using proportions

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

CHAPTER 4

SIMPLE INTEREST & COMPOUND INTEREST

By the end of this chapter, student should be able to:

1. Determine the simple interest and future value.

2. Differentiate the exact and ordinary simple interest.
3. Solve compound interest problems
4. Borrowing money

___________________________________________________________________

4.1 Introduction to interest

Interest: how much is paid for the use of money (as a percent, or an amount)

Money is Not Free to Borrow

People can always find a use for money, so it costs to borrow money.

How Much does it Cost to Borrow Money?

Different places charge different amounts at different times!

But they usually charge this way:

As a percent (per year) of the amount

borrowed

It is called Interest

Example: Borrow $1,000 from the Bank

Alex wants to borrow $1,000. The local bank says "10% Interest".
So to borrow the $1,000 for 1 year will cost:

$1,000 × 10% = $100

In this case the "Interest" is $100, and the "Interest Rate" is 10% or "10% Interest"

Of course, Alex will have to pay back the original $1,000 after one year, so this is what
happens:

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Alex Borrows $1,000, but has to pay back $1,100

This is the idea of Interest ... paying for the use of the money.

Note: I am showing a full year loan, but banks often want you to pay
back the loan in small monthly amounts, and they also charge extra fees
too!

Words

There are special words used when borrowing money, as shown here:

Alex is the Borrower, the Bank is the Lender

The Principal of the Loan is $1,000

The Interest is $100

The important part of the word "Interest" is Inter- meaning between (you see inter- in words
like interior and interval), because the interest happens between the start and end of the loan.

More Than One Year ...

What if Alex wanted to borrow the money for 2 Years?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

What is Year 0?

Year 0 is the year that starts with the "Birth" of the Loan, and ends just before the 1st Birthday.

So the start of Year 1 is the "1st Birthday". And we can know the start of Year 5 is exactly
when the loan is 5 Years Old.

4.2 Simple Interest

If the bank charges "Simple Interest" then Alex just pays another 10% for the extra year.

Alex pays Interest of ($1,000 × 10%) x 2 Years = $200

That is how simple interest works ... pay the same amount of interest every year.

Example:

If Alex borrowed the money for 5 Years, the calculation would be like this:

• Interest = $1,000 × 10% x 5 Years = $500

• Plus the Principal of $1,000 means Alex needs to pay $1,500 after 5 Years

There is a formula for simple interest

I = PRT F=P+I
where

• I = interest
• P = principal value (amount borrowed)
• R = interest rate
I
• T = time
• F = Future Value
P R T

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Example
Jan borrowed $3,000 for 4 Years at 5% interest rate, how much interest is that? How much
would he need to pay at the end of 4 years?
I = PRT
I = $3,000 × 5% × 4 years
I = 3000 × 0.05 × 4
I = $600
In 4 years time, the F = P + I
F = $3,000 + $600 = $3,600

Example
1
Find the simple interest on 𝑅𝑀750 at 4% for 2 year. What is the simple interest amount?

What is the final payable amount?

Example
Determine the interest paid on $4 000 invested at 5% per annum simple interest for 2 years.

Example
How long should $2 000 be invested, earning simple interest at 10% per annum, for it to
grow to $4 000?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

SIMPLE INTEREST – ORDINARY & EXACT INTREST

The ‘TIME’ factor in the Interest Rate calculations for the number of days can be calculated
using 2 methods:

i. Exact Interest – where time is over 365 days

ii. Ordinary Interest – where time is over 360 days. This is a more commonly used
method and it is known as the banker’s rule.

You should be able to solve for:

Example Solution
i. Principal A bank loaned a business money at 8% From I = PRT
interest for 90 days. If the amount of
interest was $4,000, use the ordinary 𝐼
𝑃=
interest method to find the amount of 𝑅𝑇
principal borrowed.
4000
𝑃= 90
0.08 × 360

𝑃 = $200,000

ii. Rate What is the rate of interest on a loan of From I = PRT

$5,000 for 125 days, if the amount of
interest is $166, using the ordinary 𝐼
𝑅=
interest method? Round your answer to 𝑃𝑇
the nearest hundredth of a percent.
166
𝑅= 125
5000 × 360

𝑅 = 9.56%

iii. Time What would be the time period of a loan From I = PRT
for $7,600, at 11% ordinary interest, if
the amount of interest is $290? 𝐼
𝑇=
𝑃𝑅

290
𝑇=
7600 × 0.11

𝑇 = 0.3469 × 360

𝑇 = 124.8 ~ 125 𝑑𝑎𝑦𝑠

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Simple Interest – Hire purchase loans

Example:

James bought a car for $89,690 (OTR). He borrowed $83,000 for 6 years at 1.88% under the
hire purchase loan.

Determine:

1. The down payment amount

2. The total interest payable
3. The total amount payable
4. Monthly repayment amount to the nearest ten cents
5. Final monthly payment

Solution:
1. Down payment = OTR price – Loan amount = $6,690

2. The interest payable , I = Prt → $83000 × 0.0188 × 6

→ $9362.40
3. Monthly amount
Total amount payable = Principle + Interest = $92,362.40

4. Monthly payment = Total amount payable ÷ number of month

= $92,362.40 ÷ (6 × 12)
= $1,282.81
~ $1,282.80

5. Final month payment = total amount – total paid for 71 months

= $92,362.40 – ($1,282.80 × 71)
= $1,283.60

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Exercise 4.1

Simple Interest

In each problem, find the ordinary simple interest. Finally, round the answers to the nearest
cents.

1. Principal: $925, Rate: 8.1%, Time: 47 days.

2. Principal: $5,600, Rate: 3.99%, Time: 92 days.

3. Principal: $2,000, Rate: 8.95%, Time: 123 days.

4. Principal: $7,500, Rate: 6.2%, Time: 58 days.

Round dollar amounts to the nearest cents. Round all percentage to the nearest tenth. Find the
time in days, rounded to the nearest whole day, using ordinary simple interest.

5. Principal: ________ Rate: 11% Time: 240 days Interest: $352

6. Principal: $12,500 Rate: 5% Time: ________ Interest: $50

7. Principal: $600 Rate: ________ Time: 45 days Interest: $6

8. Principal: $4,260 Rate: 5.6% Time: 90 days Interest: _______

9. Principal: $25,000 Rate: 4% Time: ________ Interest: $625

10. Principal: ________ Rate: 8% Time: 270 days Interest: $510

11. Principal: $3,650 Rate: 6.75% Time: 136 days Interest: _______

12. Principal: $34,950 Rate: 5.5% Time: ________ Interest: $395

13. Principal: $16,000 Rate: ________ Time: 90 days Interest: $296

14. Principal: ________ Rate: 4.9% Time: 270 days Interest: $50

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Find both the interest dollars and the total amount (i.e: principal plus interest) of the loan.

15. Tony Woo and Helen Lee are planning to start a business that will export American
food to China. They estimate that they will need $75,000 to pay for organizational costs,
get product samples and make three trips to Shanghai. They can borrow the money from
relatives for 4 years. Tony and Helen are willing to pay their relatives 9% ordinary
simple interest. Compute the total amount that Tony and Helen will owe their relatives
in 4 years.

Interest: ____________________ Amount: ____________________

16. Carolyn Wilfert owns a temporary services employment agency. Businesses call her
when they need to hire various types of workers for a short period of time. The
businesses pay a fee to Carolyn who pays the salaries and benefits to the employees.
One benefit is that Carolyn will make small, short-term loans to her employees. After
a flood, employee Judy Hillstrom needed to borrow $3,600 to her house cleaned and
repainted. Judy repaid the loan in 6 months. If Carolyn charged 5% ordinary simple
interest. How much did Judy repay?

Interest: ____________________ Amount: ____________________

17. Several years ago, Dick Shanley and Karl Coke formed a partnership to rent musical
instruments to school districts that do not want to own and maintain the instruments. In
the spring, they investigate borrowing $80,000 to buy trumpets and trombones. Because
they collect their rental fees in advance, they anticipate being able to repay the loan in
135 days. How much will they need to repay if the ordinary simple interest rate is 6.5%?

Interest: ____________________ Amount: ____________________

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

18. Along with her husband, Ruby Williams own and manage a video game arcade. A
manufacturer developed a new line of games and offered very low interest financing to
encourage arcade operators such as Ruby to install the new games. Ruby was able to
finance $60,000 worth of games for 8 months for 5.2% ordinary simple interest.
Calculate how much Ruby will repay.

Interest: ____________________ Amount: ____________________

19. Robert Burke, managing partner of a local transportation company, thinks that the
company should borrow money to upgrade its truck repair facility. After investigating
several sources of short-term loans, Robert determines that the company can borrow
$400,000 for 200 days at 5.5% exact simple interest. If the company agrees to take out
this loan, how much will it need to repay at the end of the 200 days?

Interest: ____________________ Amount: ____________________

20. Dave Engle, a former teacher, now has a business selling supplementary educational
materials such as books and computer software to parents and schools. In June, he
borrowed $45,000 from his bank to buy some new educational computer games that he
hopes to sell during August and September. The bank’s rate is 6.25% exact simple
interest as long as the time does not exceed half a year. If Dave pays the principal plus
the interest in 120 days, how much will he pay?

Interest: ____________________ Amount: ___________________

21. After working in construction for 5 years, Jerry Weekly had saved almost enough
money to buy a fishing boat and move to Alaska to become a commercial fisherman.
He still needed $9,500 which his wife could borrow from her parents until the end of
the first fishing season. The parents charged 5% exact simple interest and Jerry repaid
them after 95 days. How much interest did he pay and what was the total amount?

Interest: ____________________ Amount: ____________________

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

22. Bill and Carol Campbell need to purchase two new saws for their retail lumber yard.
The company that sells the saws offers them some short-term financing at the relatively
high rate of 11% exact simple interest. They decide to accept the financing offer but
only for $5,000 and only for 45 days. How much will Bill and Carol repay at the end
of 45 days?

Interest: ____________________ Amount: ____________________

23. After working for a large accounting firm for 10 years, Bette Ryan, C.PA, decided to
open her own office. She borrowed $50,000 at 6.7% exact simple interest. She made
enough during the first income tax season to repay the loan in 219 days. How much did
Bette pay?

Interest: ____________________ Amount: ____________________

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

4.3 Compound Interest

But a bank could say "What if you paid me everything back after one year, and then I loaned
it to you again ... I would be loaning you $1,100 for the second year!"

And Alex would pay $110 interest in the second year, not just $100.

Because Alex is paying 10% on $1,100 not just $1,000

This may seem unfair ... but imagine YOU were lending the money to Alex. After a year you
would think "Alex owes me $1,100 now, and is still using my money, I should get more
interest!"

And so this is the normal way of calculating interest. It is called compounding.

With compounding you work out the interest for the first period, add it the total, and then
calculate the interest for the next period, and so on ..., like this:

Interest

If you think about it ... it is like paying interest on interest. Because after a year Alex owed
$100 interest, the Bank thinks of that as another loan and charges interest on it, too.

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

After a few years it can get really large. This is what happens on a 5 Year Loan:

Year Loan at Start Interest Loan at End

0 (Now) $1,000.00 ($1,000.00 × 10% = ) $100.00 $1,100.00
1 $1,100.00 ($1,100.00 × 10% = ) $110.00 $1,210.00
2 $1,210.00 ($1,210.00 × 10% = ) $121.00 $1,331.00
3 $1,331.00 ($1,331.00 × 10% = ) $133.10 $1,464.10
4 $1,464.10 ($1,464.10 × 10% = ) $146.41 $1,610.51
5 $1,610.51

So, after 5 Years Alex would have to pay back $1,610.51

And the Interest for the last year was $146.41 ... it sure grew quickly!

(Compare that to the Simple Interest of only $100 each year)

We have been using a real example, but let's be more general by using letters instead of
numbers, like this:

𝑟 𝑛𝑡
𝐹 = 𝑃 × (1 + )
𝑛

Where

F = Future Value or the compound value

P = Present Value or the initial value or the principal
r = annual interest rate
n = number of periods of compounds in a year or the number
of times interest is paid in a year.
t = number of years

This is the basic formula for Compound Interest.

Remember it, because it is very useful.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 = 𝐹 − 𝑃

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Number of compounding periods:

Daily compounding interest → n = 365
Weekly compounding interest → n = 52
Monthly compounding interest → n = 12
Quarterly compounding interest →n=4
Semi-annually compounding interest → n = 2
Annually compounding interest →n=1

Determining the time, t from the given equation:

𝑟
Given, 𝐹 = 𝑃 × (1 + )𝑛𝑡
𝑛

To find the ‘t’, using logarithm,

𝐹
1 log
𝑃
𝑡 = × 𝑟
𝑛 log(1+ )
𝑛

RULE OF LOGARITHM:
𝐥𝐨𝐠 𝒃
𝒂𝒙 = 𝒃 → 𝒙 𝐥𝐨𝐠 𝒂 = 𝐥𝐨𝐠 𝒃 →𝒙=
𝐥𝐨𝐠 𝒂

Example

Find the total interest on RM750 at 4% for 5 years compounded every 6 months. What is the
interest amount?

P = RM 750, r = 0.04, t=5 n=2

r
F = P × (1 + n )nt

0.04 10
→ F = 750 × (1 + )
2

F = 914.25

Interest Amount = RM164.25

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Investment

Compound Interest can work for you!

Investment is where you put your money where it could grow, such as a bank, or a business.

If you invest your money at a good interest rate it can grow very nicely.

This is what 15% interest on $1,000 can do:

Year Loan at Start Interest Loan at End

0 (Now) $1,000.00 ($1,000.00 × 15% = ) $150.00 $1,150.00
1 $1,150.00 ($1,150.00 × 15% = ) $172.50 $1,322.50
2 $1,322.50 ($1,322.50 × 15% = ) $198.38 $1,520.88
3 $1,520.88 ($1,520.88 × 15% = ) $228.13 $1,749.01
4 $1,749.01 ($1,749.01 × 15% = ) $262.35 $2,011.36
5 $2,011.36

It more than doubles in 5 Years!

Of course, you would be lucky to find a safe investment at 15% ... but it does show you the
power of compounding. The graph of your investment would look like this:

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Maybe you don't have $1,000, but if you could save $200 every year for 10 Years at 10%
interest, this is how your money would grow:

$3,506.23 after 10 Years!

For 10 Years of $200 each year.

Less Than One Year...

Interest is not always charged yearly. It can be charged Semi-annually (every 6 months),
Monthly, even Daily!

But the same rules apply:

• If it is simple interest, just work out the interest for one period, and multiply by the
number of periods.
• If it is compound interest, work out the interest for the first period, add it on and then
calculate the interest for the next period, etc.

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Example

Find the future value of 𝑅𝑀20,000 is invested at 6% for 3 months.

𝑟 𝑛𝑡
𝐹 = 𝑃 × (1 + )
𝑛
The information you need to gather from the question:
1. Principal
2. Rate
3. Time (as in how long?)
4. Interest periods (which means it depends on the period and number of times the
interest compounds)

Example
Compute the compound amount when 𝑅𝑀1000 is invested for 5 years at the nominal rate of
8% compounded quarterly.
P = 1000
R = 8%
T = 5 YEARS
n=4

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Example
Approximately how long does it take to obtain 𝑅𝑀9250 when 𝑅𝑀5000 is invested for 𝑥
years at the nominal rate of 8% compounded quarterly.
P = 5000
R = 8%
T = x years
F = 9250

Example
If $5 000 is invested at 5% per annum compound interest with the interest compounded
annually, how much is the investment worth after 4 years?

Example
Determine the interest paid on $5 000 invested at 12% per annum compound interest for 3
years, with the interest compounded
a. Annually

b. Every six months

c. Quarterly

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Example
Complete the following table to compare various forms of interest for an investment of $10,000
at 8% per annum.

$10 000 invested at 8% per annum

Compounded Compounded Compounded

Simple Interest
Annually Every 6 months Quarterly
Initial Balance
Balance after 1
year
Balance after 2
years
Balance after 3
years
Balance after 4
years
Balance after 10
years
Balance after 20
years

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Exercise 4.2

1. If $1000 is invested at 8% compounded annually, how much will be in the account at the
end of 3 years?

2. Suppose $1000 is invested at 10% compounded annually, how much will be in the
account at the end of 4 years?

3. A woman deposited $300 in her savings account. At the end of the year, her balance was
$318. If this amount represents her $300 plus interest, how much interest did she earn
during the year?

4. A man borrowed $600 from a loan company. He made payment totalling $672. If this
amount is the original $600 plus interest, how much interest did he pay?

5. Harith deposited $800 in a savings account. At the end of the year, he receives $40 simple
interest? What rate of interest did the account pay?

6. Pedro buys a $10,000, 3 months certificate of deposit. At the end of the 3 months, he
receives simple interest of $350. What was the rate of interest on the certificate?

7. Brenda bought a $1000 certificate of deposit. At the end of the year, she received $80
simple interest. What rate of interest did the certificate pay?

8. Tonya invested $3000 in municipal bonds. At the end of the year, she received $240
simple interest. What was the rate of interest paid by the bonds?

9. A loan company charges $588 for a 2-year loan of $1400. What simple interest rate is
the loan charging?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Find the missing values, in the table for each of the following investments. Round the answers
to the nearest cent or to the nearest year.

No Principal Rate Terms Future Value Compound

(years) (Compound Interest
Amount)
10 $6,000 6% compounded monthly 4 years

11 $750 8% compounded semi- 13 years

annually

12 $20,000 8% compounded quarterly $37,600

13 $12,500 12% compounded annually 30 years

14 $5,000 9% compounded monthly 18 months

15 $14,450 6% compounded quarterly 4 years

16 $4,000 4% compounded semi- $1700

annually

Find the future value (compound amount), the compound interest or the year, as indicated,
for each of the following investments or loans. Round answers to the nearest cent or the nearest
year.

17. How long would it take to obtain approximately $7400 from an investment of $4,500
invested at 5% compounded quarterly?

18. How much compound interest will you pay if you borrow $25,000 for 13 months at 15%
compounded monthly?

19. Calculate the future value (compound amount) on a loan of $38,260 at 8% compounded
annually for 13 years.

20. How much compound interest will you earn if you invest $7,900 for 16.5 years at 12%
compounded semi-annually?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST
1
21. What total amount (principal and interest) must be repaid in 2 2 years on a loan of

$15,000 at 9% compound monthly?

22. Determine the total compound interest that will have to pay if you borrow $1,780 at 16%
compounded semi-annually and don’t pay it back for 5 years.

23. How long will it take to obtain approximately $33500 from an investment of $10,000 at
9% compounded annually?

24. Compute the future value (compound amount) of $18,000 invested for 4.5 years at 5%
compounded quarterly.

25. Karen Wilson thinks that she needs to borrow $7,600 for 2 years. She doesn’t have a very
good credit rating, so most finance companies want to charge her a high interest rate. She
finally finds the lender that will loan her the money at 12% compounded monthly. How
much interest will Karen have to pay to this particular lender?

26. Mary Sousa receives a telephone call from a salesperson who describes ‘an incredible
investment opportunity’. The investment promises a return of 16% compounded semi-
annually for investments of $5,000 or more. One disadvantage is that no money will be
paid out for a long time. Another disadvantage is that the investment is very risky. Mary
doesn’t think that she will need the money for 6 years, so she decides to invest $5,000. If
the investment pays what it promises, how much interest will Mary earn in the 6 years?

27. William Wang wants to borrow money from his father to buy a car. William’s father is
trying to teach him how to manage money, so he agrees to loan him the money, but at
5% compounded quarterly. William borrows $11,200 and repays everything (principal
1
plus all of the interest) in 3 years. How much does William pay back to his father?
2

28. Don Hildebrand is trying to decide whether to invest money in a bank or in something a
little riskier that will pay a higher return. One very simple investment promises to pay a
minimum of 8% compounded annually but he must leave all of the money and invest it
for 9 years. How much interest will Don earn during the 9 years if he invests $7,150 and
the investment pays the minimum?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

29. Marcia Juarez and her brother-in-law have a successful business with several employees.
They decide to borrow $15,000 to pay their quarterly deposits for payroll taxes and
federal income tax. They get the money at 9% compounded monthly and repay all interest
and principal after 9 months. How much do they repay?

30. Sammie Crass inherited $16,780. She wants to invest it in something relatively safe so
that she can transfer all the money to her children’s college fund in about 8 years. One
investment brochure (called a prospectus) states that it will pay a return of 8%
compounded quarterly. How much will Sammie have total, principal plus interest, after
8 years?

31. To help his daughter and son-in-law purchase their first new car, Robert Chiu loans them
$24,500. They agree on an interest rate of 4% compounded annually and Mr Chiu tells
them that they can pay it all back, the $24,500 plus the interest in 6 years. How much
interest will Mr Chiu receive from them?

32. Sandee Millet owns and operates an art supply store in a suburban shopping centre.
Sandee learns about an investment that claims to pay a return of 8% compounded semi-
annually for 4 years. Sandee decides to invest $4,750. Compute the amount of interest
that she will earn in 4 years?

33. Ken Ortman is a student at medical school. He borrowed $32,000 for 26 months at the
rate of 6% compounded monthly. How much total, principal plus interest, must Ken
repay at the end of 26 months?

34. The County Employees Credit Union pays an interest rate of 8% compounded quarterly
on savings account of $1,000 or more with the requirement that the money be deposited
for at least 6 months. How much interest will Marylyn Bunnell earn if she deposits $1,800
and leaves it in the credit union for 2 years?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

4.4 Borrowing Money

Two methods available namely Reducible Interest and Flat Rate to calculate the interest on
the amount borrowed.

4.4.1 FLAT RATE

Simple interest amount is calculated and then divided equally over the total repayments.

Example
For the loan of $1 000 repaid over 6 months at a flat rate of 12% per annum, the repayments
are calculated as follows:
SI = P x r x t
= 1000 x 0.12 x 6/12
= 60
Repayment = (1000 + 60) / 6 = $ 176.67

Example
For a hire purchase loan of $60 000 to be repaid 5 years at a rate of 3% per annum, the monthly
repayments are as follows:

Example
For a hire purchase loan of $60 000 to be repaid 9 years at a rate of 3% per annum, the monthly
repayments are as follows:

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

4.4.2 REDUCIBLE INTEREST

For most loans we would pay back a certain amount at regular intervals. Once we have made
a repayment we no longer owe the full amount and therefore the calculation of interest is based
on the balance owed.

Example
John borrows $1000 and repays $200 per month. Interest is calculated at 12% per annum (i.e.
1% per month) reducible monthly. How does the loan cost him in interest?

Amount Owed
Amount owed at
Month at beginning of Interest Repayment
End of Month
Month
1 $1000 1% of 1000 = $10 $200 $810
2 $810 1% of 810 = $8.10 $200 $618.10
3 $618.10 1% of 618.10 = $6.18 $200 $424.28
4 $424.28 1% of 424.28 = $4.24 $200 $228.52
5 $228.52 1% of 228.52 = $2.29 $200 $30.81
6 $30.81 1% of 30.81 = $0.31 $31.12 NIL

Total payments = $1031.12

Thus the loan has cost John $31.12 in interest.

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

EXERCISE 4.3

1. Jane borrows $5000 and repays $1000 annually. Interest is calculated at 10% per
annum reducible annually. The table below shows the progress of the loan (to the
nearest cent).

Year Amount owed at beginning of year Amount owed at end of year

1 $5000 ($5000 x 1.1) - $1000 = $4500
2 $4500 $3950
3 $3950 $3345
4 $3345 $A
5 $A $B
6 $B $1142.20
7 $1142.20 $C
8 $C $0

a. Determine A, B, and C.

b. Determine how much interest Jane pays altogether on this loan.

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

2. Raniie borrows $1200 and repays $250 monthly. Interest is calculated at 18% per
annum (ie.1.5% per month) reducible monthly. The table below shows the progress of
the loan (to the nearest cent).

Month Amount owed at beginning of month Amount owed at end of the month
1 $1200 ($1200 x A) - $250 = $968
2 $968 $B
3 $B $493.51
4 $493.51 $250.91
5 $250.91 $4.67
6 $4.67 ($4.67 x A) - $C = $0

a. Determine A, B and C.

b. Determine how much interest Raniie pays altogether on this loan.

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

3. A person borrows $2000. At the end of each month, interest of 2% is calculated on the
outstanding balance and then the monthly repayment of $400 is accepted.
a. Find the amount owing at the beginning of the second month.
b. Find the repayment made at the end of the final month.

4. A person borrows $3000 and repays $1000 at the end of each year after interest at 15%
of the outstanding balance has been added to the account. At the end of year 4 the
person decides not to just pay the usual $1000 but instead to pay off the remaining
balance. How much will this final repayment be?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

5. Junior is buying a motorbike costing $4500. The finance deal he is offered is based on
a flat rate of 14% per year with repayments spread over 3 years. How much does the
motorbike cost him altogether and what is the monthly repayment if he:
a. Uses the finance deal for the full $4500,
b. Pays $900 from his savings and uses the finance deal for the other $3600.

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

Past Year Question Bank

1. Shane inherited $15,000 from his uncle and wants to invest this money for three
years. He has a choice of three different investment opportunities.

Investment A: Compound interest at 8.5% per year compounded quarterly.

Investment B: Compound interest at 8.5% per year compounded monthly.

Investment C: Simple interest at 8.5% per year.

Which is a better investment plan for Shane and how much would he get, to the
nearest dollar after 3 years?

2. Edwin loaned his brother $1200 for 2 years. He charges 2.5% simple interest per year.
How much will his brother owe Edwin in 2 years?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

3. Hakim is now 17 years old and he wants to buy a house in 8 years’ time. He knows
that he would probably need a down payment of $25,000, then. If he can earn 5% in a
certificate deposit that compounds quarterly,
i. How much should be invest now to have $25,000 in 8 years?
ii. How much would he have earned in interest for the amount invested in these 8
years?
All answers to the nearest dollar.

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

4. Country-Bank offers an investment account of 12% p.a. for the first 30 days and then
the interest rate reverts to 7.5% p.a. Five thousand dollars is deposited into this
account. Interest is credited to this account only at the end of each year.
a. Calculate the interest earned for the first 30 days.
Note: 1 year = 365 days

b. Find the interest earned for the remainder of the year.

c. Calculate the total interest received for the year.

d. What is the effective rate of interest received over a year on this investment?

The Statebank’s equivalent account pays 4.59% p.a. interest credited annually.

e. Calculate the interest if $5000 is invested in the Statebank account for a year.

f. What is the difference in interest between the two bank accounts?

The Statebank also offers a Supersaver account that earns 8.25% p.a. interest credited
six-monthly.

g. Calculate the interest on $5000 invested in a Supersaver account for a year.

h. Which of the three accounts maximizes the return?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

5. Lynette deposited $20,000 in a money market account that pays 5% compounded

quarterly.
a. Complete the table to find her balance after 2 years, to the nearest cent.

Compound Periods Total Amount at the end of the year Interest earned for
(Principal + Interest) the year
At the end of year 1

At the end of year 2

b. What was the total interest earned in the first two years?

c. If he leaves the money in the account, how much would she have at the
beginning of the 8th year?

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FIA- Contemporary Business Mathematics SIMPLE INTEREST &COMPOUND INTEREST

6. Several years ago, Carol and Karl formed a partnership to rent musical instruments to
school districts that do not want to own and maintain the instruments. In the spring,
they plan to buy trumpets and trombones worth $120,000 and are able to place a down
payment of 20% and borrow the balance from a bank. Because they collect their rental
fees in advance, they anticipate being able to repay the loan in 145 days. Their options
for borrowings from 2 different banks were as follows:

BANK A: Ordinary simple interest rate 6.35%

BANK B: Exact simple interest rate 6.3%

a. How much should they borrow from the bank to purchase the instruments?

b. Which bank should they borrow from? Why?

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FIA- Contemporary Business Mathematics GROWTH & DECAY

CHAPTER 5

GROWTH AND DECAY

LEARNING OUTCOME

In this chapter you are expected to know:-

1. Exponential function
2. Exponential Growth & Decay

5.1 Exponential Growth and Decay

5.1.1 Exponential function

y = b x where b  0, b  1

base exponent

Properties of exponential functions

If x = y, then b x = b y

If x = y, ( x  0, y  0), log a x = log a y

Inverse properties of exponents

log b b x = x

e = 2.718281828

Find in calculator!

Inverse of exponents
ln e x = x

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FIA- Contemporary Business Mathematics GROWTH & DECAY

SOLVING AN EXPONENTIAL EQUATION

An exponential equation is one in which the variable occurs in the exponent. In this section
you will learn how to solve equations that involve exponential functions. The techniques that
you develop here will be used in the next section for solving applied problems.

EXAMPLE 1
Solve the equation
1. 9 2 x = 6561 2. 31−2 x = 243
2 x log 9 = log 6561
log 6561
x= =2
2 log 9

3. 8𝑒 2𝑥 = 20 4. 𝑒 3−2𝑥 = 4
20
2 x ln e = ln
8
1 20
x= ln = 0.4581
2 8

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FIA- Contemporary Business Mathematics GROWTH & DECAY

5.1.2 Growth and Decay

y = ka x

y = Present value/ Balance (After Change)

k = Initial value / Balance (Before Change)
a = Growth / Decay factor
x = Time

Growth Decay

a>1 a<1

Growth factor, a = 1 + r Decay factor, a = 1 – r

r is the change rate (%) r is the change rate (%)

Example: increase by 30% Example: decrease by 30%

→ r = 0.3 → r = 0.3
→ a = 1.3 → a = 0.7

Given a = 1.08 Given a = 0.88

→ r = (a – 1) x 100% → r = (1 - a) x 100%
→ r = 8% → r = 12%

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FIA- Contemporary Business Mathematics GROWTH & DECAY

EXAMPLE 1
The current student population of the Brentwood Student Center is 2,000. The enrolment at the
center increases at a rate of 4% each year. To the nearest whole number, what will the student
population be closest to in 3 years?

EXAMPLE 2
The value of a car purchased for $20,000 decreases at a rate of 12% per year. What will be the
value of the car after 3 years?

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FIA- Contemporary Business Mathematics GROWTH & DECAY

EXAMPLE 3

A sum of $1000 is invested at an interest rate of 4% per year. Find the time required for the
amount to grow to $4000 if interest is compounded continuously, given that the exponential
growth model is:
1000𝑒 0.04𝑡 = 4000

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FIA- Contemporary Business Mathematics GROWTH & DECAY

EXERCISE 5.1

The equation A( x) = 2000(1.04) represents an inheritance compounded annually.

x
1.
a. How much was the original inheritance?

b. Is this increasing or decreasing and at what percent?

c. How much will the inheritance be worth after 7 years, to the nearest cent?

2. Sixty-four teams participate in a softball tournament in which half the teams are
eliminated after each round of play.
a. Write a formula to model the number of teams remaining after any given round
of play.

b. How many teams remain in play after 3 rounds?

c. How many rounds of play will it take to determine which team wins the
tournament?

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FIA- Contemporary Business Mathematics GROWTH & DECAY

3. The Booster Club raised $30,000 for a sports fund. No more money will be placed
into the fund. Each year the fund will decrease by 5%. Determine the amount of
money, to the nearest cent, that will be left in the sports fund after 4 years.

4. A bank is advertising that new customers can open a savings account with a 3.75%
interest rate compounded annually. Robert invests $5,000 in an account at this rate.
If he makes no additional deposits or withdrawals on his account, find the amount
of money he will have, to the nearest cent, after three years.

5. The number of people who owns computers has increased 23.2% annually since
1990. If half a million people owned a computer in 1990, predict how many people
will own a computer in 2015.

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FIA- Contemporary Business Mathematics GROWTH & DECAY

6. Show the following population figures support the claim that the annual percentage
growth rate is approximately 8%.
Year 1975 1980 1990
Population 18 000 000 26 000 000 56 000 000

7. Show the following population figures support the claim that the annual percentage
decay rate is approximately 4.5%.
Year 1985 1992 1996
Population 12 400 9 000 7 500

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FIA- Contemporary Business Mathematics GROWTH & DECAY

8. The population of a country is growing exponentially. The population in 1993,

1994, 1995 and 1996 are as follows:
Year 1993 1994 1995 1996
Population 45 million 45.8 million 46.6 million 47.5 million
Predict the population for this country for the year 2010.

9. The population of a particular species of animal is declining exponentially. The

numbers of these animals thought to be in existence in the wild in 1992, 1993, 1994
and 1995 were as follows:
Year 1992 1993 1994 1995
Number 18 000 16 500 15 200 14 000
If the above figures are correct, and nothing is done to alter the rate of decline, how
many of these animals will exist win the wild in the year 2005?

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FIA- Contemporary Business Mathematics GROWTH & DECAY

10. An analysis of the membership of a particular sports club since it was first formed
in 1970 indicated that the membership each year could have been quite accurately
predicted using the exponential model:

Membership in the year N  Ak ( N −1970)

The number of members in 1970, 197=80, 1990 and 1995 were as follows:

Year 1970 1980 1990 1995

Members 80 170 375 550

a. Find the value of A and of K (state k to 2 decimal places)

b. By what percentage is the membership growing each year?
c. Predict the number of members for the year 2005.

11. During a drought a particular river bed dries up and the colony of frogs living in the
vicinity experiences a population decline that is exponential. The estimated number
of frogs in the colony, t days after the drought conditions were officially declared
as follows:

t 5 6 7 8
Population 530 450 385 325

According to these estimated figures what was the population of the frog colony
initially (t = 0)?

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FIA- Contemporary Business Mathematics GROWTH & DECAY

12. The graph below shows an exponential decay situation with the variables P and t
related according to a rule of the form: P = kat for 0 < a < 1.

P vs t
90

80

70

60

50
P
40

30

20

10

0
0 1 2 3 4 5 6
t

Determine
a. the value of P when t = 3
b. the value of P when t = 8
c. the constants a and k
d. the value of P when t = 0

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FIA- Contemporary Business Mathematics GROWTH & DECAY

13. An environmental group commence a long term project to reduce the level of
pollution in a particular stretch of river. Starting the campaign in 1985 (when t = 0),
the pollution level P, in parts per million, is monitored each year and the results are
graphed as shown as below.

P (Parts per P vs t
million)
90

80

70

60

50

40

30

20

10

0
0 1 2 3 4 5 6 7 8 9 10
t years ( = 0 in 1985)

The fall in P is thought to follow an exponential decline according to the rule P = ka t

a. Determine the value for k and a.
b. Use the formula to predict the value for P for 1998.

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FIA- Contemporary Business Mathematics GROWTH & DECAY

Exercise 5.2

1. The initial population of a bird colony is known to be 350 and after one year, this
population has grown to 490. The population growth is known to be exponential. Find
an equation which gives the population (P) at any time (t years) after the initial population
was discovered. Predict the population after 5 years.

2. The value (V) in dollars, of a rare Australian stamp was found to increase in value
according to the equation: V = 180(1.055) t where t is the time (in years) after 1980.

Find:

i. the value of this stamp in 1980

ii. the value of the stamp in 1986 (to the nearest dollar)

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FIA- Contemporary Business Mathematics GROWTH & DECAY

3. A particular bird population can be calculated at any time (t), in years by using the
formula: P = 20(23t )
i. are the bird numbers increasing or decreasing?
ii. what is the initial population?
iii. what is the percentage of increase / decrease each year?

4. A pre-owned car was purchased in January 1992 for $31900. if the value of the car
depreciates by 8% each year, find:
i. an equation for the value (V) of the car at any time (t years) after the purchase.

ii. the value of the car after 2 years.

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FIA- Contemporary Business Mathematics GROWTH & DECAY

5. The amount of a certain radioactive material (R) which remains t years after 1980 is given
by the formula: R = Ro (60 −0.031t ) where Ro is the initial amount of radioactive
material present in 1980. In 1990, 21 kg of material remained.

i. what is the value of Ro?

ii. How much of the material remained in 1986.

6. During the gold rush of the 19th century, the population of a small town grew
exponentially at a rate of 40% per year for three years. As the supply of gold ‘dried up’
the population then decreased exponentially at a rate of 30% per year for four years. If
the initial population was 360 people, what was the population after 7 years?

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FIA- Contemporary Business Mathematics GROWTH & DECAY

7. In 1990, the population in the United States was about 249 million and the exponential
growth rate was 8% per decade. (Source: U.S. Census Bureau)

The growth function is given as P(t ) = 249e 0.08t .

What will the population be in 2020?
After how long will the population be double as what it was in 1990?

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FIA- Contemporary Business Mathematics GROWTH & DECAY

Past Year Questions Bank

1. Scientists found a test area which is occupied by both population of animal A, P A and
population of animal B, PB. It was also found that PA and PB can both be modelled as
exponential growth at any time (t) in months is approximately given by:
PA = 10 000 (0.9)2t PB = 1 000(1.09)t
Find
a) Which animal population is increasing and which one is decreasing? [1 mark]

b) The initial (i.e. t = 0) population of A and B in this test area. [1 mark]

c) What is the percentage of increase / decrease for each population each month?
[2 marks]

d) The population of A and B after 3 months to the nearest 100 animals. [2 marks]

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FIA- Contemporary Business Mathematics GROWTH & DECAY

2. The value of Lagoon View condominium follows a pattern of exponential growth. In the
year 2001, Sharlini purchased a unit in this condominium. The value of this unit, V, in
thousands of dollars, t years after 2001 is given by the exponential growth model

𝑉 = 500𝑒 0.055𝑡

a) How much did Sharlini paid for this unit? [2 marks]

b) By what percentage is the price of the property increasing per year? [2 marks]

c) What will the property be worth in the year 2016? [2 marks]

d) When will the property be worth 1.5 million dollars? [3 marks]

105
FIA- Contemporary Business Mathematics ALGEBRAIC TECHNIQUES

CHAPTER 6

ALGEBRAIC TECHNIQUES

By the end of this chapter, student should be able to:

4. Convert word problems into algebra problems.

5. Solve algebraic real life problems.

_________________________________________________________________________

6.1 Algebraic Expressions

An algebraic expression is one in which variables are used to represent numbers.

Example 6.1

1. What number increase by 6 gives 18 as a result?

2. The product of two numbers is 85. One is 5, find the other.

3. 15 exceed a certain number by 6. What is the number?

2
4. of a number is 20. Find the number.
3

5. It takes 9 times as much steel as nickel to make stainless steel. If 81 tons of stainless
steel are used in constructing a bridge, how many tons of nickel are needed?

If the statement was:

It is x times as much A as B…

➔ 𝑨 = 𝒙𝑩

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FIA- Contemporary Business Mathematics ALGEBRAIC TECHNIQUES

Addition Subtraction Multiplication Division Equal Sign

Sum Difference Product Quotient Equals

Plus Minus Times Divided by Gives

Added to Subtracted from Multiply Into Is/was/will be

More than Less than Twice per Yields

Increased by Decreased by Of Amounts to

Total Less Double Is equal to

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FIA- Contemporary Business Mathematics ALGEBRAIC TECHNIQUES

Exercise 6.1

1. 40% of 80 is what number?

2. Find 15% of 60.

3. 315 is what percent of 3150?

4. 8 is what percent of 4?

5. What percent of 40 is 5?

6. 20 is what percent of 30?

7. The relationship between your shoe size S and the length of your foot L (in inches) is
given by
S = 3L – 22 For men
S = 3L – 21 For women

a. If Tyrone wears a size 11 shoe, what is the length L of his foot?

b. If Maria wears a size 7 shoe, what is the length L of her foot?

c. Sams’s size 7 tennis shoes fit Sue perfectly! What size women’s tennis shoes
does Sue wear?

d. The largest shoes ever sold were a pair of size 42 shoes made for the giant Harley
Davidson of Avon Park, Florida. How long is Mr Davidson’s foot?

e. How long a foot requires a size 14 shoe, the largest standard shoe size for men?

f. How long is your foot when your shoe size is the same as the length of your foot
and you are
i. A man? ii. A woman?

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FIA- Contemporary Business Mathematics ALGEBRAIC TECHNIQUES

8. In 1951, Eric Shipton photographed a 23-in footprint believed to be that of the

Abominable Snowman. Use the relationship given in Question 7.
a. What size shoe would the Abominable Showman need?
b. If the Abominable Snowman turned out to be the Abominable Snowwoman,
what size shoe would she need?

9. 30% of what number is 60?

10. 10 is 40% of what number?

11. North America has approximately 7% of the world’s oil reserves. If the North America
reserves represent 47 billion barrels of oil, what are the world’s oil reserves? (Round
your answer to the nearest billion)

12. In a recent year, about 280 million tons of pollutants were released into the air in the
United States. If 47% of this amount was carbon monoxide, how many tons of carbon
monoxide was that?

13. On a 60-item test, a student got 40 items correct. What percent is that? (Round to the
nearest percent)

14. The price of an article on sale was 90% of the regular price. If the sale price was $18,
what was the regular price?

15. Two stores sell an item that they normally price at $140. Store A advertises a sale
price of 25% off the regular price and Store B advertises a sale price of $100. Which
is the lower price?

16. ABC Savings & Loan loans the Adam family $42,000 toward the purchase of a
$48,000 house. What percent of the purchase price is the loan?

17. The parking cost at a citywide garage is C = 1+ 0.75(h-1), where ℎ is the number of
hours you park and C is the cost in dollars. When is the cost C less than $100?

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18. Of the total calories in a McDonald’s apple pie, about 50% are fat calories. If there
are 125 fat calories in a McDonald’s apple pie, how many total calories are there in
the apple pie?

19. Of the total calories in a Big Mac, 55% are fat calories. If 313.5 of the calories in a
Big Mac are fat calories, how many total calories are there in a Big Mac?

20. The Burger King Whopper also contains 50% fat calories. If 355 of the calories in a
Whopper are fat calories, how many total calories are there in a Whopper?

21. A new computer-software store had losses of $9950 during each month of its first
year. What was the total loss for the year?

22. The greatest ocean depth is 36,198 feet below sea level. If an unmanned research sub
dives to that depth in 18 equal steps, how far does it dive in each step?

23. Tuition at the state university is $182 per credit for undergraduates. How much tuition
will Wei Chen pay for 13 credits?

24. There is a 3-degree drop in temperature for every thousand feet that an airplane climbs
into the sky. If the temperature on the ground is 50 degrees, what will be the
temperature when the plane reaches an altitude of 24,000 feet? (Source: Lands End)

25. When Ashwini discovered that her checking account was overdrawn by $238, she
quickly transferred $450 from her savings to her checking account. What is the
balance in her checking account?

26. In a laboratory experiment, a mixture started at a temperature of -102 degrees. First

the temperature was raised 37 degrees and then raised 52 degrees. What was the final
temperature?

27. The Tigers gained a total of 148 yard during the first half of the football game. During
the second half they lost 191 yard. How many yards did they gain or lose during the
entire game?

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FIA- Contemporary Business Mathematics ALGEBRAIC TECHNIQUES

28. A college’s enrolment dropped by 3245 students, over the last 11 years. What was the
average drop in enrolment each year?

29. Pat ate a dozen crackers as a snack. Each cracker had 17 calories. How many calories
did Pat eat? (Source: Nabisco, Ins)

30. A long-distance phone company estimates that it is losing 95 customers each week.
How many customers will it lose in a year?

31. An unmanned submarine descends to 150 feet below the surface of the ocean and
takes a water sample. As it continues to go deeper, it takes a water sample every 25
feet. What is its depth when it takes the 15th sample?

32. A discount store found that 174 items were lost to shoplifting last month. The total
loss was $4176. What was the average loss on each item?

33. A plane ascended an average of 730 feet each minute during a 37-minute take-off.
How far did the plane ascend during the take-off?

34. A scuba diver was photographing fish at 65 feet below the surface of the lagoon. She
swam up 24 feet and then swam down 49 feet. What was her final depth?

35. The total cost of a used car is $3675. You can buy the car with $500 down and the rest
to be financed. How much do you have to finance?

36. A woman’s weekly salary after deductions is $257. If the deductions are $106, what
is her salary before the deductions?

37. In accounting: Assets – owner’s equity = liabilities

If the owner’s equity is $4787 and the liabilities $1688, what are the assets?

38. Nutritionists have discovered that a cup of coffee has 144 mg of caffeine 3 times the
amount contained an average cola drink. How many milligrams are there in an average
cola drink?

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39. Elena Sanchez opened a shop that does alterations and designs custom clothing. Use
the table for her income and expenses to answer the questions.

Month Income Expenses Profit or Loss

January $2400 $3100
February $1900 $2000
March $2500 $1800
April $2300 $1400
May $1600 $1600
June $1900 $1200

a. What was Elena’s average monthly income?

b. Complete the table by finding Elena’s profit or loss for each month.

c. Which month had the greatest loss? Which month had the greatest profit?

d. What was the average monthly amount of expenses?

3
40. A man entitled to 4 his pay when he retires. If he receives $570 per month after

retirement, what was his regular salary?

𝑚
41. The density of a substance is given by 𝑑 = , where m is the mass and 𝑣 is the
𝑣

volume. If the density of sulphur is 2 g/ml and the volume is 80 ml, what is the mass
of sulphur?

1
42. Supporting tissues, like bones, ligaments, tendons and fats make up 3 of the body. If
a woman has 40 lbs of supporting tissues in her body, what is her total weight?

43. If 4 times a number is increased by 5, the result is 29. Find the number.

44. In a recent election the winning candidate obtained 10,839 votes, 632 more votes than
the loser. How many votes did the loser have?

45. In a recent election, the losing candidate received 9347 votes, 849 votes less than the
winning candidate. How many votes did the winner get?

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FIA- Contemporary Business Mathematics ALGEBRAIC TECHNIQUES

46. The cost of an article is $57. If the profit when selling it is $11, what is the selling
price of the article?

47. During strenuous exercise the flow of blood pumped by the heart is increased to four
times its normal rate, reaching 40 pints per minute. How many pints of blood per
minute does the heart pump when at rest?

48. During strenuous exercise, the number of breaths a person takes each minute increases
to five times the normal rate, reaching 60 breaths per minute. How many breaths per
minute should a person take when at rest?

2
49. When a gas tank is full, it contains 18 gal of gas. What is the capacity of this tank?
3

1
50. The dome of the village church of Equord Germany is 16 as high as the dome of St.
Peter’s Basilica. If the dome of the village church is 43.75 feet high, how high is the
dome of St. Peter’s Basilica?

51. The best linguist of all times is Cardinal Giuseppe Caspor Mezzofanti, who can
translate 186 languages and dialects. If he can translate 42 more languages than
dialects, how many dialects he can translate?

52. Eleven more than twice a number is 19. Find the number.

53. The sum of 3 times a number and 8 is 29. Find the number.

54. If the product of 3 and a number is decreased by 2, the result is 16. Find the number.

55. When 75 is subtracted from four times Tamu’s age, the result is Tamu’s age. How old
is Tamu?

56. While shopping for clothes, Consuelo spent $3 less than twice Brenda spent. Consuelo
spent $81. How much did Brenda spent?

57. My sister is 9 years older than I am. The sum of our ages is 51. Find our ages.

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FIA- Contemporary Business Mathematics ALGEBRAIC TECHNIQUES

58. Last year, Lien earned $1500 more than her husband. Together they earned $37,500.
How much did each of them earn?

59. Jason paid five times as much for his computer as he did for his printer. He paid a total
of $1320 for both items. What is the cost of each item?

60. If 6 is added to 7 times a number, the result is 69. Find the number.

61. If three times Linda’s age is decreased by 36, the result is twice Linda’s age. How old
is Linda?

62. Dennis weight is 184 lbs. His weight is 2 lbs less than six times his child’s weight.
How much does his child weight?

63. Ed and Marge were candidates for city council. Marge won, with 94 more votes than
Ed. The total number of votes cast in the election was 578. Find the number of votes
received by each candidate.

64. A $149,000 estate is to be divided between two charities so that one charity receives
$18,000 less than the other. How much will each charity receive?

65. The attendance at the Saturday night baseball game was three times the attendance at
Sunday’s game. In all, 56,000 fans attached the games. How many fans were at each
game?

66. A board is 78 cm long. Rosa cuts the board into two pieces, with one piece 10 cm
longer than the other one. Find the length of both pieces.

67. A wire is cut into two pieces, with one piece 7 feet shorter than the other. The wire
was 31 feet long before it was cut. How long was each piece?

68. A rope is 50 feet long. Juan cuts it into two pieces so that one piece is 8 feet longer
than the other. Find the length of each piece.

69. A 90 cm pipe is cut into two pieces so that one piece is 6 cm shorter than the other.
Find the length of each piece.

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70. Use the formula for the perimeter of a rectangle, P = 2l + 2w for the following
questions.

a. The perimeter of a rectangle is 48 yd. The width is 5 yd. Find the length.

b. A rectangular dog pen length is twice as long as it is wide. The perimeter of the
pen is 36 ft. find the length and the width of the pen.

c. The length of a rectangular jewellery box is 3 inches more than twice the width.
The perimeter is 36 inches. Find the length and the width.

d. The length of a rectangle is 27 cm and the perimeter is 74 cm. find the width of
the rectangle.

e. A new city park has a rectangular shape. The length is triple the width. It will
take 240 yards of fencing to go around the park. Find the length and the width
of the park.

f. The perimeter of a rectangular house is 122 ft. the width is 5 ft less the length.
Find the length and the width.

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Past Year Questions Bank

1. An electrician charges $40 per hour, for labour plus $50 for each house call.
a. Write an expression for the cost, C of h, hours’ work for a house call. [1]
b. Find the cost of an electrical repair work which was started at 3.30pm and was
completed at 5.50pm, if the electrician charges in multiples of 30 minutes. [2]

2. John is 30 years old. When Alvin asked John for his son, Josh’s age, John smiles and
replied, “One third of Josh’s age plus three times his age equals to my age”. How old
is Josh? [2]

3. Forty-five hours of overtime must be split among three workers. The second worker
will be assigned twice the number of hours as the first worker and the third will be
assigned twice the number of hours of the other two workers. How many hours of
overtime will be assigned to each worker? [3]

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4. Fran is a photographer, and she decides to create a series of prints of two of her original
photographs that have been popular sellers in the past. One is a seascape and the other
a landscape. Previous experience suggests that she sells 20% more seascapes than
landscapes. Fran makes a profit of $50 for each seascape print, and $60 for each
landscape. If Fran would like to make a total profit of $9000 from her print run, how
many of each must be created and sold? [3]

5. A child’s train ticket costs half the adult’s ticket fare and the reservation fee is the same
on the child’s ticket as on the adult’s ticket. When a ticked is reserved, the total price is
inclusive of the ticket cost and the reservation fee. Reservation fee is charged per
transaction and not per ticket. Danny reserved an adult ticket from Johor to Kuala
Lumpur which costs $216. Andrew reserved two tickets; one adult and one child, which
cost $ 321.
a. What is the cost of a child’s train ticket? [2]
b. What is the cost of an adult’s train ticket? [1]

c. How much is the reservation fee? [1]

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

CHAPTER 7

Constructing Straight Line Graphs

By the end of this chapter, student should be able to:
1. Sketch and plot straight line graphs
2. Find intercept points
3. Application of graphs.
_________________________________________________________________________

7.1 Constructing Straight Line Graph

Linear relationships are used in everyday life. These relationships can be expressed in many
different ways. Linear graphs are one way of expressing these relationships, when graphed they
give a straight line. Linear graphs can be sketched or plotted.

Consider the simple formula 𝑦 = 2𝑥 + 1 which basically says that for every value of x there
corresponds a unique value of𝑦.

E.g. if𝑥 = 1, then 𝑦 = 2 (1) + 1 which equals 3.

We can repeat this for as many values of x as we see fit:

𝑥 = 1, 𝑦 = 3

𝑥 = 2, 𝑦 = 5

𝑥 = 3, 𝑦 = 7

𝑥 = 4, 𝑦 = 9

Rather than continuing to produce a massive list of paired 𝑥, 𝑦 values, why not plot them on a
graph instead? This way we can visualise the relationship between 𝑥 and 𝑦 instead of having
to stare at a meaningless list of numbers.

So, for the equation, 𝑦 = 2𝑥 + 1 we plot the points (1, 3), (2, 5), (3, 7) etc.

“Across” 1, “up” 3

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Plot 𝑦 = 2𝑥 + 1 in the space given below for−10 ≤ 𝑥 ≤ 10. Using the scale 1: 2.

1. Do not forget to label the axes and the graph itself. A silly mark to lose in the exam
otherwise.
2. Do not stop your line prematurely. Draw the line right through the page

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

The gradient between any two points:

(𝑥1 , 𝑦1 ) and (𝑥2 , 𝑦2 ) are any two points, on the straight line

y2 − y1
𝑚 = x2 − x1

Key facts about the gradients and the shape of the straight line graphs:

What do you need to draw or sketch a graph?

1. 1 point and 1 gradient

2. 2 points
3. 1 equation

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

Sketching vs Drawing (Plot)

Sketching a straight line graph:

1. Graph paper is not needed.

2. Only two points are necessary to sketch a straight line graph.
3. Join the two points to give a straight line.

What is needed?
1. Direction must be correct based on the gradient (positive, negative, zero or
infinite)
2. Intercept points (mark the intercept points clearly: x-intercept, y-intercept, other
intercept points)
3. Label the line and the axis

Drawing/ plotting a Straight line graph:

1. Use a graph paper.

2. Using the equation, come up with 2 set of points for better accuracy.
3. Based on the points, choose an appropriate scale.
4. Draw and label the scale on the vertical and horizontal axis.
5. Mark the points on the graph and connect the points.

What is needed?
1. The axis must have scales
2. Labels on the axis, line and the graph must have a title.
3. The points used to draw the graph must be clearly shown.
4. Label the intercept points if any.

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Examples

Example 1:
Draw the graph of the
linear equation

𝑦 = 6 − 2𝑥

Example 2:
Sketch the linear equation

𝑦 = 2𝑥 + 4, showing the
𝑥 and 𝑦 intercepts.

Example 3:
Rearrange the linear
equation,

3𝑦 + 4𝑥 = 12 to

𝑦 = 𝑚𝑥 + 𝑐 form.

Sketch the linear equation

and find the 𝑦 intercept.

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Exercise 7.1
1. Find the gradient between A(2, 5) and B(4, 9) and then find the equation of the straight
line.

2. Find the 𝑥 and 𝑦 intercepts for 𝑦 = 5𝑥 − 3 and hence sketch the graph.

3. Sketch 3𝑦 = −6 𝑥 + 15

4. State the gradient and 𝑦 intercept of 2𝑦 = 6 𝑥 − 8

5. Find the gradient between 𝐴(4, 2) and 𝐵(−3, 2) and hence find the equation of line 𝐴𝐵.

6. Find the gradient between 𝐴(1, −4) and 𝐵(−1, 4) and find the equation of AB.

7.2 Linear Modelling

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

Linear modelling is where the linear relationship between two variables can be
expressed in an equation form. When forming the linear modelling, 3 items must be
extracted from the question:

i. Rate, 𝑚
ii. The fixed variable, 𝑐
iii. The independent, 𝑥 and dependent variable,𝑦.

Through a linear equation, values of the dependent variable 𝑦 can be determined using
the independent variable,𝑥.

The important points to extract information from a question

1. Rate which is the gradient. (𝑚)

2. The fixed cost (the y-intercept) (𝑐)
3. Form a linear equation
4. The independent and dependent variable.

𝑦 = 𝑚 𝑥 + 𝑐

Dependent variable Independent variable

𝒚 is dependent on 𝒙, as any changes on 𝒙 will affect 𝒚.

Example

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

1. Alvin is planning for his wedding and he has found that the cost in dollars (𝐶) for a wedding
reception depends on the number of guests (𝑛) that he plans to invite. For 20 guests, he is
being charged $3300 and for 40 guests, he is charged $5100.

a. Express the cost of the reception (𝐶) is terms of the number of guests invited (𝑛).

b. If he plans to invite 120 guests, how much would he need to pay?

c. He has a budget of $10,000 how many guests can he afford to invite? Explain.

Exercise 7.2

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

1. For home use, Western Water charges 80 cents per kilolitre of water and a $9.00 service
charge per household per month for the supply of water.

a. if $C represents the cost, and k represents the number of kilolitres of water used:
i. state, with reason, which variable is independent and which is dependent

ii. develop a linear model between C and k, for a period of 3 months.

b. if Sam’s water meter reveals that he has used 42 kilolitres of water in a period of
three months, how much will he have to pay?

c. James moved into share accommodation with Sam and their water consumption
doubled in the next three-month account. Find the amount they each have to pay
if they shared the bill equally.

d. Sam’s friend Tim had an account requiring a payment of $50.60. How many
kilolitres of water did Tim use?

e. Sketch a graph showing the relationship between the cost and the number of
kilolitres of water used.

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2. An appliance repair company charges $40 to inspect a faulty appliance, and $30 per hour
to carry out repairs.

i. Write down a linear equation for the cost $C, in terms of h hours of repairs to
be made.
ii. State, with reason, which variable is independent and which is dependent.
iii. What is the fixed cost?
iv. Describe the meaning of the gradient of the linear model.
v. Find the cost of a 2.5-hour repair job.
vi. If Peter paid an account of $167.50 for appliance repairs, how long did the
repairs take to complete?
vii. Sketch the graph of cost against the number of hours of repairs.

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3. The cost $C, of hiring The Grunters, a working band, is linearly related to the number of
hours n, that they are required to play. There is an hourly charge and a fixed cost associated
with hiring the equipment that they need to use. This table of values relates cost to number
of hours played.

𝑛 3 5 7
𝐶 700 1000 1300

a. State, with reason, which variable is independent and which is dependent.

b. Find a relationship between the cost $C, and the number n of hours played.
c. Using the linear model, predict the cost for a 4-hour show.
d. Using the linear model, predict the cost of a 9-hour show.
e. Mitch wanted to hire the band for his birthday party, but could only afford a
maximum of $650. Find, to the nearest half hour, the number of hours that The
Grunters would play for $650.
f. Sketch the graph of this relationship for 0 ≤ n ≤ 10

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

4. Dylan owns a printing business, and Re ams he ld v s days

R
his equipment only allows for the 1800
1600
same amount of paper to be used each
1400

day. In July, he worked to capacity 1200

1000
every day of the week, and his stock of 800
600
paper by the ream is shown in the 400
200
graph
0
0 10 20 30 40
n

If R represents the number of reams of paper that he has in stock after n days, find from
the graph:
a. The number of reams he had in stock at the start of July.
b. The number of reams he uses every day.
c. A linear relationship between R and n.
d. How many reams he has left at the end of the month?

When Dylan has 300 reams remaining, he usually reorders another 1500 reams, but during
July he forgot to do so.
e. On what date in July should Dylan have reordered?

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

5. Jamie is a successful real estate agent, and his salary is calculated with a fixed retainer
added to a commission based on the sales he makes. He earns $500 per fortnight plus 1%
of the total of all sales he makes for that fortnight. If Jamie’s salary is given by $S and the
value of the property he has sold in any given fortnight are given by $v,

a. Find Jamie’s salary for a fortnight if he sells property to the value of:
i. $400 000,
ii. $1 million.
b. State, with reason, which variable is independent and which is dependent.
c. Find a linear relationship between S and v.
d. Sketch a graph of salary against value of sales.
e. Interpret the meaning of the S-intercept and the gradient of this graph.
f. Jamie has found that his commitments require a salary of at least $3000 per
fortnight. What value of property must he sell each fortnight to reach his salary
target?

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

6. Craig needs to hire a cherry picker to allow him to cut some overhanging branches in his
backyard. Two hire companies have the same unit for hire, but at different costs. Hire-All
will hire a cherry picker to Craig for $30 per hour, plus a delivery charge of $40. Rent-
from-Us will hire their cherry picker to Craig for $25 per hour, but charge $60 for delivery.

a. State, with reason, which variable is independent and which is dependent. Find
a relationship between the total cost $C, and the number n of hours hired.
b. Sketch a graph that shows these relationships.
c. Find out how much will each company charge for a job that requires:
i. 0.5 hours;
ii. 5 hours
d. Craig estimated the time needed to complete the task is 3.5 hours. Using the
linear model, predict which company will be cost effective for Craig. Explain.

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

Past Year Question Bank

1. Wendy is subscribed to a mobile phone service provider which charges $66 for phone calls
made for the total duration of 2 hours and $116.40 for the total 288 minutes.

a. Find the linear model for the charge, 𝑌 dollars, for the call duration, 𝑥 minutes. [1]
b. How much would Wendy have to pay if her total call duration is 3.75 hours? [1]
c. Wendy was away for vacation for the month of May and had switched off her hand
phone during that time. Would she have had to pay any amount for her phone bill in
May? If so, how much and explain why? [2]
d. Sketch a line graph that represents the charge, 𝑌 dollars, for the call duration, 𝑥
minutes. [1]

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

2. For home use, United Waters charges 32 cents per kilolitre for water, and a $6.00 service
charge per month, per household for the supply of water. If $C represents the cost, and k
the number of kilolitres of water used:
a. State with reason, which variable is independent and which is dependent. [1]
b. Develop a relationship between C and k. [1]
c. If Julian’s Union Water account reveals that he has used 35 kilolitres of water in March,
how much will he have to pay? [1]
d. James and John moved into shared accommodation with Julian, and their water
consumption increased on the April’s account. They decided to split the bill equally.
And each of them paid $9.70. How many kilolitres of water did they use in the month
of April, to the nearest tenth of a kilolitre? [2]
e. Sketch a graph of the relationship between cost and the number of kilolitres used. [2]
f. In June, Julian, James and John went on a vacation for a month and during this time
they had turned off the main tap to prevent water wastage. How much would Julian,
James and John each need to pay for their share of the water bill for the month of June?
[2]

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

7.3 Simultaneous Equations

A pair of "Simultaneous equations" is two equations which are both true at the same time.
You have two equations which have two unknowns to be found.

There are two methods to solve simultaneous equation:

i. Substitution
ii. Elimination.

Choose which one you are most comfortable with and use it.

Example 1

A man buys 3 fish and 2 chips for £2.80

A woman buys 1 fish and 4 chips for £2.60

How much are the fish and how much are the chips?

First we form the equations. Let fish be f and chips be c.

We know that:

𝟑𝒇 + 𝟐𝒄 = 𝟐𝟖𝟎 (1)

𝒇 + 𝟒𝒄 = 𝟐𝟔𝟎 (2)

➔ The price of chips is 50p

NOTE:

➢ It is a good idea to label each equation. It helps you explain what you are doing
➢ This value of 𝑥 can be substituted into equation [1] or [2], or into the expression for𝑦.
➢ Choose the one method that is easiest for you!
➢ As a check, substitute the values back into each of the two starting equations to see if it
balances.

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

Solving simultaneous linear equations using straight line graphs

NOTE:
Because the graphs of 2𝑦 + 𝑥 = 8 and 𝑦 + 1 = 2𝑥 are straight lines, they are called
linear equations.

Drawing two straight line graphs to solve simultaneous

equations also works the other way round − solving the two simultaneous equations
algebraically gives the coordinates of the point of intersection of the two straight line
graphs of the two simultaneous equations.

You can solve simultaneous equation using your calculator.

Using the calculator to find the intercept points:

1. Equation to be in the form of : 𝑎𝑥 + 𝑏𝑦 = 𝑐

2. Using the ‘EQN’ mode with 2 unknowns, key in the values of 𝑎, 𝑏 & 𝑐 for both
the equations.
3. Calculator will yield the values for : 𝑥 & 𝑦

2𝑦 + 𝑥 = 8 and 𝑦 + 1 = 2𝑥

→ 𝑥 + 2𝑦 = 8 and −2𝑥 + 𝑦 = − 1

→ 𝑥 = 2; 𝑦=3

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FIA- Contemporary Business Mathematics STRAIGHT LINE GRAPH

Exercise 7.3

1. A McDonald’s hamburger and large fries contain 820 calories. In fact, the fries have
almost double the number of calories of the burger, but not quite. The exact relationship
is: if you double the calories in the hamburger and reduce the result by 20, you will
have the same number of calories as are in the fries. How many calories are in the
hamburger and how many are in the fries?

2. The Sunrise farm has chickens and cows. The farm manager counts the animals in the
morning. First he counts the heads of the animals, he finds that there are 200 heads.
Then he counts the legs, he finds that there are 540 legs. How many chickens are in the
farm?

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3. Craig needs to hire a cherry picker to allow him to cut some overhanging branches in
his backyard. Two hire companies have the same unit for hire, but at different costs.
Hire-all will hire a cherry picker to Craig for $30 per hour, plus a delivery charge $40.
Rent-from-Us will hire their cherry picker to Craig for $25 per hour, but charge $ 60
for delivery.
Determine the number of hire hours for Rent-from-Us to be the same cost as Hire-All,
and the cost involved.

Explain the significance of the intercept point.

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4. Two car rentals firms offer cars for rent in a small city. Sketchy Brothers hire their cars
at $50 per day plus 20 cents per Km travelled, while Rent-A-Heap charge $70 per day
plus 15 cents per km travelled.

a. Write an equation for the cost $C, of hiring a car for the day from Sketchy
Brothers if the car travels k Kilometres.
b. Write an equation for the cost $C, of hiring a car for the day from Rent-A-Heap
if the car travels k kilometres.
c. Graph both equations on the same set of axes and estimate the intersection point
of the 2 lines.
d. Use an algebraic technique to find the coordinates of the intersection point, and
explain the significance of this point.
e. When is it cheaper to use Rent-A-Heap?

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5. On a ferry crossing, 3 caravans and 2 cars cost £205. Using 𝑣 for caravans and 𝑐 for cars,
write an algebraic equation to illustrate this. If 2 caravans and 3 cars cost £195, write an
algebraic equation to illustrate this to find the cost for 4 caravans and 2 cars.

6. A boot manufacturer makes two different types of boots in different sections of the same
factory. The company produces 5125 pairs of boots each month. The cost of producing
the standard boot is $10 per pair, plus a fixed monthly cost of $20000, while the work boot
costs $8 per pair, and has a fixed monthly cost of $24000. Each month the budget of the
production of each type of boot is the same. How many pairs of each type of boot are
produced by the factory?

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7. Oscar wants to start a new mobile phone plan. The graph below shows the monthly
cost for each of three different plans that Oscar is considering.

a. State the fixed monthly cost for each plan.

b. Find the interpret the gradient of each line.
c. Find a linear model for cost $C, in terms of number of call minutes t, for each
plan.
d. For what total number of call minutes will Plan 1 cost less than Plan 2?
e. Under what circumstances would Plan 3 be the cheapest option for Oscar?
f. For the total monthly cost of Plan 2 to be the same as Plan 3, find the number
of minutes of calls and the cost?
g. What information would be needed to advise Oscar on the cheapest option for
his situation?

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7.4 Break even analysis

Break even analysis is the relationship between cost volume and profits at various levels of
activity, with emphasis being placed on the break-even point. The break-even point is where
the business neither receives a profit nor a loss; this is when total money received from sales is
equal to total money spent to produce the items for sale.

At Break-Even: → Revenue = Cost → Profit = 0

Uses of a break even analysis

Break even analysis enables a business organization to:

1. Measure profit and loss at different levels of production and sales.

2. To predict the effect of changes in price of sales.
3. To analysis the relationship between fixed cost and variable cost.
4. To predict the effect on profitability if changes in cost and efficiency.

Disadvantages of break-even analysis

Even though break even has these advantages or uses, there are also several demerits of
break-even analysis.

1. Assumes that sales prices are constant at all levels of output.

2. Assumes production and sales are the same.
3. Break even charts may be time consuming to prepare.
4. It can only apply to a single product or single mix of products.

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Example

Moonbeam is a company that makes electrical toasters. The cost of producing each toaster is
$9, while there are fixed weekly costs of $12 925 that cover items such as wages and plant
operation. The toasters are sold to retailers for $64 each. Assuming that all toasters made are
sold:

a. Find the number of toasters that needs to be produced to achieve the break-even point
b. Find the cost and revenue at this point.
c. Show the break-even point on a diagram.

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Exercise 7.4

1. Find the break-even point if sales revenue $R is given by R=45n, where n is the number
of items sold, and $C represents the cost of producing the items, and is given by C =
32n + 4160

2. The local football club decides to have a sausage sizzle at the local market. There is a
fee of $18 payable to the market committee for establishing a stall. The local butcher
sells the club sausages at 5 cents each, and donates the use of his barbecue trailer. If the
sausages sell for 50 cents each:

a. Establish a revenue equation for the sale of n sausages

b. Establish a cost equation for n sausages
c. How many sausages must they sell to break even?
d. And if they order 240 sausages and sell them all, how much profit will they
make?

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3. If it is known that, 𝑅 is the revenue in dollars earned by an apple farmer for selling
𝑛 kilograms of apples, and 𝐶 is the cost in dollars of producing 𝑛 kilograms of apples,
given 𝐶 = 360 + 6𝑛 and 𝑅 = 8𝑛. Find the number of kilograms of apples the farmer
needs to produce to avoid a loss.

4. There were two equations for the production of an item: 𝑦 = 0.5𝑥 + 400 and
𝑦 = 1.5𝑥

If 𝑥 items are produced,

a. Rewrite the two equations in terms of Revenue, 𝑅 and Cost, 𝐶.
b. Find the fixed cost of production
c. Find the break-even point.

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5. Jim makes cakes at home to be sold at the market. In order to do so, Jim incurs a cost
of $2 per cake, plus a fixed cost of $45 for each production run. Jim sells the cakes for
$6.50 each. If Jim produces 𝑥 cakes in a production run, find:

a. Find the cost of producing 𝑥 cakes

b. Find the revenue gained in selling 𝑥 cakes.
c. Find how many cakes Jim must produce and sell to make a profit.
d. If Jim’s profit is $𝑃, find a formula for 𝑃 in terms of 𝑥.
e. Jim finds that his cost has increased to $2.50 per cake, and the fixed cost has
increased to $54 per production run. How much should he charge for each
cake to have a break-even point of 12 cakes?
f. Using these new costs as stated in (e), if Jim makes and sells 40 cakes, find
his profit.

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6. The Lamp Company sells its lamps for $25 each. Each month, the cost for production
of the lamps consists of $9 per lamp, plus a fixed component of $18 000.

a. The total cost $𝐶 for producing x lamps in a month is given by 𝐶 = 𝑚𝑥 + 𝑏. Find

the values of 𝑚 and 𝑏.
b. Develop a linear relationship for the revenue $𝑅 for selling 𝑥 lamps.
c. If the company produced 5000 lamps in a month, find the values of 𝐶 and 𝑅, and
explain whether the company made a profit in that month.
d. Sketch accurately the graphs of 𝐶 and 𝑅 on the same set of axes.
e. Assuming all lamps produced are sold, write down an equation that can be solved
to reveal the break-even point. For what number of lamps will the company break
even?
f. Profit is defined as the difference between revenue and cost. Find a formula for the
profit $𝑃 made by the company on 𝑥 lamps made and sold in a month.
g. Using the equation obtained in (f), find the profit the company can expect on the
sale of 7000 lamps.
h. During a particular month of production, a machine breakdown increased the fixed
component to $24 000.

i. Find a formula for the profit on 𝑥 lamps produced and sold.

ii. How many lamps should the company produce to break even?
iii. If a profit of $12 000 was made during this month, how many lamps were
produced and sold?

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Past Year Questions Bank

1. ARTZ is a company that makes electrical kettles. The cost of producing each kettle is
$9, while there are fixed weekly costs of $12,925 that cover items such as wages and
plant operation. The kettles are sold to retailers for $64 each. Assuming that all kettles
made are sold:
a. Find the number of kettles that needs to be produced to achieve the break-
even point.
b. Find the cost and revenue at this point.
c. Show the break-even point on a diagram.
d. What is the minimum number of kettles the company must sell in order to
make a profit?
e. What is the minimum profit that the company can make?

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2. The management of TMI finds that the fortnight fixed cost attributable to the production
of their 100-watt light bulbs is RM660. If the production cost for each 100-watt light
bulb is 60sen and sells for RM1.15,

a. How many 100-watt light bulbs must they sell to break-even?

b. Find the cost and revenue at this point.
c. Show the break-even point on a diagram.
d. What is the minimum number of 100-watt light bulbs the company must sell
in order to make a profit?
e. What is the minimum profit that the company can make?
f. Compute the profit (loss) corresponding to production levels of 950 light
bulbs.

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CHAPTER 8

Linear Inequalities & Optimisation

By the end of this chapter, student should be able to:

4. Solve Linear inequalities & Graph the inequalities

5. Sketching systems of Linear Inequalities
6. Solving Linear Optimisation Problems

_________________________________________________________________________

8.1 Inequalities

An inequality is a sentence using an inequality symbols, which are <, >, ≤, ≥.

To solve an inequality sentence, use exactly the same procedure that you would if it were an
equation, with the following exception. When, multiplying (or dividing) both sides of an
inequality by a negative number, the direction of the inequality switches. This is called the
negative multiplication property of inequality.

The inequality signs: > Greater than

< Less than

≥ Greater than or equal to

≤ Less than or equal to

can be used to define a range of values for a variable.

For instance −𝟑 < 𝑐 ≤ 4 means that the variable c can have any value greater than -3 but
less than or equal to 4.

The solution set is the set of all the possible values that c could be.

Sometimes only integer values are considered. An integer is a positive or negative whole
number.

Solution set: {-2, -1, 0, 1, 2, 3, 4}

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Example 1

What integer values of 𝑛 satisfy the inequality −2 ≤ 𝑛 < 4.

The inequality means that 𝑛 must be greater than or equal to -2 and less than 4.

So the integers that satisfy this are -2, -1, 0, 1, 2, 3.

Example 2

Write down the integers 𝑛 that satisfy the inequality−5 < 2𝑛 < 6.

→ −2.5 < 𝑛 < 3

So the value of 𝑛 must be between -2.5 and 3 (exclusive).

So the integers in this interval are -2, -1, 0, 1, 2.

Exercise 8.1

1. List the integers 𝑥 such that −3 ≤ 𝑥 < 2.

2. List the values of 𝑛, where n is an integer, such that 3 ≤ 𝑛 + 4 < 6.

3. Find all the integer values of 𝑛 that satisfy the inequality −8 ≤ 3𝑛 < 6.

4. Given that, 𝑥 is an integer. Write down the greatest value of 𝑥 for which 2𝑥 < 7.

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8.2 Solving Inequalities

To solve an inequality you need to find the values of 𝑥 which make the inequality true.

The aim is to end up with one letter on one side of the inequality sign and a number on the
other side.

You solve inequalities in the same way as solving equations – you do the same thing to both
sides.

Example 1:

Solve the inequality 5𝑥 – 3 < 27.

5𝑥 − 3 < 27

First add 3 to both sides: 5𝑥 < 30

Divide both sides by 5: 𝒙 < 6

(so the inequality is true for all values of 𝑥 less than 6).

Example 2:

Solve the inequality

4𝑞 + 5 ≥ 12 – 3𝑞.

4𝑞 + 5 ≥ 12 – 3𝑞

First add 3𝑞 to both sides so that the letters appear on one side of the equation:

7𝑞 + 5 ≥ 12

Subtract 5 from both sides:

7𝑞 ≥ 7

Divide both sides by 7:

𝒒 ≥ 𝟏.

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Example 3:

a. Solve the inequality 2𝑛 – 1 ≤ 𝑛 + 3.

b. List the solutions that are positive integers.

Example 4:

Solve the inequalities:

a. 5(𝑎 – 3) > 3𝑎 – 5 [Hint: Begin by expanding bracket]

b. 4𝑥 – 5 < −3

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8.2.1 Multiplying (or dividing) an inequality by a negative number

−2 < 3. × −1 2 > − 3.

Remember!
Change sign
Change symbol

Notice that −2 < 3 when multiplied both sides by −1. The new inequality is 2 > −3.

So to keep the inequality true we have to reverse the inequality sign.

So…

When you multiply or divide both sides of an inequality by a negative number the
inequality is reversed.

Example 1

Solve −3𝑥 < 6

Divide both sides by -3. Because we are dividing by a negative number the inequality sign is
reversed. 𝒙 > −2

Example 2

Solve 3 – 2𝑑 < 5

Method 1 Method 2
Subtract 3 from both sides: Add 2𝑑 to both sides to get a
-2𝑑 < 2 positive numbers of 𝑑’s:
3 < 5 + 2𝑑
Divide both sides by -2 and
reversing inequality sign: Subtract 5 from both sides:
𝑑 > −1 −2 < 2𝑑

Divide both sides by 2:

−𝟏 < 𝑑 or 𝒅 > −1

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Example 3

Solve 8 – 𝑥 ≤ 12

Subtract 8 from both sides:

−𝑥 ≤ 4

Multiply both sides by -1 (and reversing inequality sign):

𝑥 ≥ −4

Example 4

Solve the inequalities:

a. 5 – 3𝑥 < 11 b. −4𝑐 > 12 c. 2(𝑞 – 3) ≤ 5 + 7𝑞

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8.3 Graphing a system of Inequalities

Graphing a system of Inequalities

1. Solve the equation for y (if necessary).
2. Graph the equation as if it contained an = sign.
3. Pick a point not on the line to use as a test point.
The point (0,0) is a good test point if it is not on
the line.
4. If the point makes the inequality true, shade that
side of the line. If the point does not make the
inequality true, shade the opposite side of the line.

Graph the
following inequality

𝒚 ≤ 𝟑𝒙 − 𝟏

Graph the inequality

𝒚 ≤ 𝟑𝒙 − 𝟏

1. Graph the line y = 3x - 1.

2. Pick a test point. (0,0) was used.
3. The test point is false in the inequality

𝟎 ≤ 𝟑(𝟎) − 𝟏

𝟎 ≤ −𝟏
false

4. Since the test was false, do not shade OVER

the point (0,0) → shade the opposite side of the
line.

HINT!

ABOVE the line

If 𝒚 ≥ 𝒎𝒙 + 𝒄 If 𝒚 ≤ 𝒎𝒙 + 𝒄

→More than →Less than

→ Shade ABOVE the line → Shade BELOW the line

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Example 1

Graph 3 𝑥 + 4 𝑦 ≤ 12.
3 3
𝑦 ≤ −4𝑥 +3 → 𝑦 = −4𝑥 +3

< : Less than

Below the line

Example 2

Graph y ≥ 2 x + 3.

𝑦 ≥ 2𝑥 + 3

> : More than

ABOVE the line

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Example 3

Graph 𝑥 ≤ 2

The graph of 𝑥 = 2 is a vertical line whose points all have the x-coordinate of 2

𝑥 ≤ 2 → less than → below the line or left of the line.

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8.4 Systems of Linear Inequalities: Solutions Using Graphing with Two Variables

A "system" of linear inequalities is a set of linear inequalities that you deal with all at once.
Usually you start off with two or three linear inequalities. The technique for solving these
systems is fairly simple.

To graph the solution to a system of inequalities, follow this procedure:

1. Convert all inequalities in the form of 𝒚 ≥ 𝒎𝒙 + 𝒄 or 𝒚 ≤ 𝒎𝒙 + 𝒄

2. Graph each equation on the same set of axes as if it was 𝒚 = 𝒎𝒙 + 𝒄.

3. See where the shading of all the inequalities overlaps.

The overlapping region is the solution to the system of inequalities. The solution to
the system is the region of interest which is shaded.

➔ The shaded area is called the region of interest or feasible region.

4. Finding the corner points of the region of interest.

2 ways of finding the corner points:

i. Using simultaneous equation, if the system is being sketched.

ii. Using the intercept coordinates, if the system is being drawn on a
graph paper.

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Example 1

Solve this system by graphing.

𝑥 ≥2

𝑦 ≤4

𝑥−𝑦 ≤6

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Example 2

Graph the solution to this system of inequalities.

𝑥 + 2𝑦 ≤ 12

3𝑥 − 𝑦 ≥ 6

Solution:

Remember!

If you can graph a straight line, you can graph an inequality!

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Example 3

Solve the following system:

2𝑥 – 4𝑦 ≤ 12
𝑥 + 5𝑦 ≤ 20
𝑥 ≥ 0
𝑦 ≥ 0
Shade the feasible region and find the corner points.

Solution:
1
2𝑥 – 4𝑦 ≤ 12 → 𝑦 ≥ 2𝑥 −3
1
𝑥 + 5𝑦 ≤ 20 → 𝑦 ≤ −5𝑥 +4

𝑥≥0
𝑦≥0
Continue with the solution.

[(0, 4), (0, 0), (6, 0), (10, 2)]

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Example 4
Solve the following system:
2𝑥 – 𝑦 ≥ – 3
𝑥 + 𝑦 ≥ 5
𝑥 ≤ 5
Shade the feasible region and find the corner points.

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Exercise 8.2
Using a graph paper, for each of the following:
i. Graph the feasible region by shading the feasible region or the area of interest.
ii. Find the corner points of the feasible region.

1. 𝑥 ≥ 0; 𝑦 ≥ 0; 𝑦 ≤ 6; 𝑥≤4

2. 𝑥 ≥ 0; 𝑦 ≥ 0; 𝑦 ≥𝑥−9

3. 𝑥 ≥ 0; 𝑦 ≥ 0; 𝑥 ≤ 4; 𝑦≤3

4. 2𝑥 + 3𝑦 ≥ 19; 4𝑥 + 5𝑦 ≥ 35

5. 𝑥 ≥ 0; 𝑦 ≥ 1; 𝑦 ≤ 3𝑥 − 14; 4𝑥 + 𝑦 ≤ 56

6. 𝑥 ≥ 10; 𝑦 ≥ 8; 25𝑥 + 18𝑦 ≤ 1800; 15𝑥 + 12𝑦 ≤ 1140

7. 𝑥 ≥ 0; 𝑦 ≥ 0; 4𝑦 + 𝑥 ≤ 4

8. 𝑥 ≥ 5; 𝑦 ≥ 4; 8𝑦 − 3𝑥 ≤ 24

9. 𝑥 ≤ 10; 𝑦 ≤ 15; 5𝑦 + 2𝑥 ≥ 10

10. 𝑥 ≥ 3; 𝑦 ≥ 2; 2𝑥 + 𝑦 ≤ 16; 3𝑥 + 5𝑦 ≤ 45

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8.5 Optimisation
Optimisation is a process which determines the value of a function. Subject to various
constraints, we may find the maximum profits, the minimum time, the minimum cost, the
maximum sales and so on.

A 7 step approach to optimisation:

Step 1 Define variables to represent the two quantities that vary.
Step 2 Write constraints in terms of these variables. (Look for information that describes
minimum and maximum values for the variables, or combinations of the variables
in mixing-type problems).
Step 3 Define an objective function. (This will be a linear relationship in terms of the
defined variables, that forms the value for the quantity that is to be optimised).
Step 4 Graph the constraints, shade the feasible region.
Step 5 Find the coordinates of all corner points.
(Solve simultaneously, all pairs of intersecting lines that form corner points).
Step 6 Using a table, substitute all corner points into the objective function to discover
which yields the optimum value.
Step 7 Interpret the result, and write the answer in words.

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Example 1
An airline operates aircraft that can carry at most 250 passengers between Australian capital
cities. Some passengers are booked on travel packages, and pay less than standard passengers
not booked on package deals. The airline policy for booking seats dictates that it allocates no
more than 150 seats for package deals, and must have at least 60 standard passengers booked
at the higher rate. There are never more standard seats allocated than package seats as the airline
has found that all bookings are down unless they offer package deals. Each package seat yields
a profit of $20 for the airline, while a standard seat yields $40.
a. Develop constraints on the supply of seating on the aircraft.
b. Write a formula for the profit $P based on the number of seats booked.
c. How many deals of each type needs to be sold if the airline would like to maximise the
profits?

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Exercise 8.3

1. The refrigeration department has enough floor space to display 114 refrigerators in its
new showroom. The company sells only two different types of refrigerators, a standard
and a deluxe model. The company purchases the standard model for $750, and the
deluxe model for $1000, and allows a maximum of $90 000 for the purchase of
refrigerators. Market research suggests that at least twice as many standard models as
deluxe models are sold. The company is sure that all refrigerators will be sold, making
a profit of $350 on a standard model, and $450 on the deluxe model. How many of each
type should be purchased for maximum profit?

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2. Kate and Nathan run a business making hutches for animals such as rabbits or reptiles.
They produce hutches of two different sizes, a small model, and a large model. In the
coming month they have to produce at least 20 small, and 10 large hutches. Each small
hutch requires 6 working hours to produce, and a large hutch requires 9 working hours
to produce. Kate and Nathan have a total of 300 working hours available to use in the
building of hutches each month.
Let x be the number of small, and y the number of large hutches made each month.
a. Write all the relevant constraints for x & y.
b. Graph all the constraints on the same set of axes, shading the feasible region.
c. If Kate and Nathan sell small hutches for $75, and large hutches for $100.
i. Write down the equation for the revenue $R, obtained by producing and
selling x small, and y large hutches.
ii. What is the maximum value of this revenue?
iii. How many of each type of hutch should Kate and Nathan produce for this
maximum revenue?

3. Phil is a property developer. He has plans for a maximum of 2400 square metres of
living space which he plans to divide into one- or two-bedroom units. Each one-
bedroom unit requires 60 square metres of floor space, and each two-bedroom unit, 80
square metres of floor space. Market research suggests that Phil ought to build at least
12 one-bedroom, and at least 10 two-bedroom units, and not exceed a total of 35 units
within his block.
Let x be the number of one-bedroom units, and y the number of two-bedroom units.
a. Write four constraints on x and y.
b. Graph all the constraints on the same set of axes and find the feasible region.
c. If Phil can make a profit of $60 000 on a one-bedroom unit, and $75 000 on a
two-bedroom unit:
i. write down the equation for the profit $P, obtained by producing and
selling x one bedroom, and y two-bedroom units.
ii. find the maximum profit Phil could make for producing and selling x
one-bedroom, and y two-bedroom units.
iii. determine the number of one-bedroom and two-bedroom units Phil
should build to produce the maximum profit.

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4. A company manufactures doors in two factories, M and N. In each factory they produce
both aluminium and timber doors of a standard size. The company must fill an order
for at least 480 aluminium, and at least 600 timber doors. The daily running costs for
factory M and N are $30 000 and $40 000 respectively. The daily production of these
doors is given in the table.
Factory Aluminium Timber
M 40 70
N 80 60
Let x represent the number of days of operation of factory M, and y the number of days
of operation of factory N.
a. Write down the constraints on x and y.
b. Graph the constraints on the same set of axes and find the feasible region.
c. Write a linear relationship as an objective function for the total cost of
production $C.
d. For how many days should each factory operate to fill the orders, and minimise
the costs involved in doing so? What is this minimum cost?

5. A company manufactures two different types of trucks, a one-tonne and a three-tonne

model. Each week, they make a maximum of 550 one-tonners, and 400 three-tonners.
Up to 125 workers are employed on the assembly line, each working a 38-hour week.
The one-tonner requires 5 employee-hours of labour, while the three-tonner requires 8
employee-hours of labour for complete construction. The plant has enough parking
spaces for up to 800 completed trucks. The company makes a profit of $14 000 on the
one-tonner, and $15 000 on the three-tonner.
Let x be the number of one-tonne trucks, and y the number of three-tonne trucks
produced in a week.
a. Write down the constraints on x and y.
b. Graph these constraints on the same set of axes and find the feasible region.
c. Write an equation for the profit $P, that the company can expect to make for x
one-tonne trucks and y three-tonne trucks.
d. Find the number of trucks of each type that the company should produce each
week to maximise their profit, and find this maximum profit.

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6. Fran is a winemaker who produces both red and white wines from her vineyard. Her
facilities dictate that the amount of wine she can produce on any day is limited to a
maximum of 150 bottles. Her red wines have become very much sought after, but she
produces no more than twice as much red wine as white wine, and never more than 120
bottles of white wine. Each bottle of red wine costs $9 to produce, while a bottle of
white wine costs $12 to produce. Fran is limited to a total of $1500 per day in production
costs. Fran sells all her wines for $16 per bottle.
Let x be the number of bottles of red wine, and y the number of bottles of white wine
that Fran produces in a day.
a. Write down the constraints on x and y.
b. Graph these constraints on the same set of axes and find the feasible region.
c. Write an equation for the profit $P, that Fran can expect to make for x bottles
of red wine and y bottles of white wine.
d. Find the number of bottles of each type of wine that Fran should produce each
day to maximise her profit, and find this maximum profit.

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FIA- Contemporary Business Mathematics LINEAR INEQUALITIES & OPTIMISATION

7. A bookseller wants to purchase both hardback and paperback editions of a new book.
He decides to purchase
15 or more hardback copies;
At least 25 paperback copies;
At least 40, but at most 60 copies altogether;
More or equal paperbacks than hardbacks.
Let h be the number of hardback copies and p be the number of paperback copies
purchased.
a. Write down all five inequalities relating to the constraint. [5]
b. Label the lines on the diagram with the inequalities and indicate clearly the
feasible region. [6]
c. Each hardback copy costs $15 and each paperback copy costs $5.
i. Write the equation for the cost of the books. [1]
ii. Calculate the number of each type that the bookseller must purchase to
minimise the cost. [3]
d. Each hardback is sold at $19.50 and each paperback copy is sold at $10.20.
i. Write the equation for the revenue earned from selling all the books.
[1]
ii. Calculate the number of each type that the bookseller must sell to
maximise the revenue. [3]
e. i. Write the equation for the profits earned from the sale of the books.
[1]
ii. Calculate the number of each type that the bookseller must sell to
maximise the profit. [3]

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FIA- Contemporary Business Mathematics LINEAR INEQUALITIES & OPTIMISATION

Past Year Question Bank

1. A company selling bulbs for the garden produces two types of ‘six-bulb pack’ – type H
and type D. Each H pack (𝑥) contains 2 hyacinth bulbs and 4 daffodil bulbs. Each D
pack (𝑦) contains 1 hyacinth bulb and 5 daffodil bulbs. The company wishes to make
at least 100 H packs and at least 120 D packs. To make up these packs, the company
has 640 hyacinth bulbs available and 2000 daffodil bulbs available.

a. Based on the information above, write out 4 inequalities which best represents
the constraints given.

b. Using the space given in the next page, graph the 4 inequalities, label them
accordingly and clearly mark the feasible region or the region of interest.

The cost of producing each H pack and each D pack is $6 and $4 respectively.
However, both the packs are being sold for $10 each.

c. Based on the information above, write out the objective function to maximise
the profit.

d. Using the corner point method, determine how many of each pack should the
company sell to achieve the objective function.

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FIA- Contemporary Business Mathematics LINEAR INEQUALITIES & OPTIMISATION

172
FIA- Contemporary Business Mathematics ANSWERS

ANSWERS

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FIA- Contemporary Business Mathematics ANSWERS

Answers

CHAPTER 1

Exercise 1.1

1. 26 7. 25 13. 4
2. 7 8. 19 14. 81
3. 81 9. -0.13 15. 58
4. 20 10. 39.21 16. 2
5. 72 11. 4 17. 5
6. 12 12. 26 18. 12

Exercise 1.2(a) Exercise 1.2(b)

75,600,000 58 m
75,630,000 $2859.49
75,633,500 $2859.50
75,633,460 $2859
75,633,456.8 10.06 m
75,633,456.789 1 km

Exercise 1.3
Case 1 7. Avg  $112, 200,000
1. KLIA
2. Penang & Philippines Case 2
3. 221,000
1. California
4. KLIA & Changi Airport; 1,795,000
2. Arizona
5. 767,833
3. California + Texas + Florida = 312 stores
6. Penang = $70 million;
4. Michigan & Ohio
KLIA = $115 million;
5. 595 stores
Changi = $110 million;
6. 84 stores
Suvarnabumi = $94 million;
7. 991 stores
Philippines = $82 million
8. Arizona; $9,700,000 or $9.7 million
Jakarta = $105 million

Case 4
Case 3
1. $13.00
1. Daimler Chrysler & General Motors 2. Order B is cheaper by $2.00
2. Verizon, Nissan, Toyota, McDonald’s, 3. Order B is cheaper by $2.00
GM 4. Order B is sufficient; 862 Kcal
3. $244 million 5. Both exceeds, order A by 460 and order B
4. $64 million by 202
5. $716 million 6. Order for Boy: Hotdog, French Fries,
6. $626,457,600 Soda, Apple.
7. $600 million Order for Girl: Sandwich, Onion Rings,
8. $704,313,250 Fruit Juice, Candy Bar
Cost of meal is $17; Plus movie tickets:
$24;Total: $41.00

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FIA- Contemporary Business Mathematics ANSWERS

Case 5 Case 6

1. Increase: 337, 642 1. United states; 359,711

2. Detroit 2. China; 1,244,736
3. New York 3. China; 1,380,972
4. Chicago 4. Switzerland; 28,152
5. 202,668  203,000 5. Switzerland; 121,531
6. San Antonio 6. Switzerland; 149,683
7. Germany & United States
8. Almost 5 times

Exercise 1.4 Exercise 1.5

1. 130
2. 170 1. 312 billion bricks
3. 380 2. $25,272
4. 320 3. $40,000,000
5. 5500 4. $16
6. 6000 5. 38, 034,000
7. 300 6. $390
8. 100 7. Not Sufficient. Need to top up $14
9. 8600 8. 3375feet2
10. 2700 9. 296 rooms
11. 356,000 10. $86
12. $2,300,000 11. 105 boxes
13. Total cost = $3,100 12. 5 bills; $16
14. 1,400,000 13. $2100
15. 14 million 14. $1,038; $572.40
16. 107,000

Chapter 2
Exercise 2.1
1. 42/131
2. 5/13
3. 1 ½ inches
4. 8 ½ inches
5. Max of 600 calories
6. 6 ¼ ml or 6.25ml
7. $5362 million
8. 48 1/13 hours
9. 5/6 cup
10. 21 ½ miles per gallon
11. Not sufficient. Need ¼ yards more
12. 3 ¾ cups
13. 28.2%
14. 1600 bolts
15. 85%
16. $136
17. 97,680

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FIA- Contemporary Business Mathematics ANSWERS

Exercise 2.2 15. $98.75

1. 4/5; 3/5; Madeline did better. 16. 10 gallons
2. 10/11; 9/11; Raymond 17. $6,000
3. 10 gallons 18. 1,625 rose bushes
4. 6,550,000 viewers 19. 25%
5. 15 hours 45 minutes 20. $3,440
1 2
6. ;
3 5
7. 55 packages
Past Year Question
8. 24 cups 1
9. 80 lots; $ 22 million Q1 – i) 10 ii) 90%
1
10. 1 8 cups Q2 – $48,000
Q3 – $269
11. 13.95 miles
Q4 – $450
12. 152.75 m2
Q5 –$13.10
13. $11,000
14. 457.4km; 10.59km/l; 17 cents/km

CHAPTER 3
Exercise 3.1
1. 7/5; 5/14; 14/5; 5/26
2. ¾; 1/5; ½
3. 3/11; 1/3
4. a. 6/1; 5/2; 7/16; b. 8/15; 3/2; 4/5
5. ¼
6. 4:11
7. 34:35
8. 92 : 21

Exercise 3.2 v. $0.40; $0.162; $0.047

1. a. 5/3 cups per people A savings of $0.353
b. 2/5 $per pen
c. 3/7 feet per second Exercise 3.3
d. 10/3 miles per hour 1. 22.5 hours
e. 18 miles per gallon 2. RM7.20
f. 33/2 miles per gallon 3. 42 pounds
2. 21; 22.4; 20.9; 23.1 4. RM273.45
3. i. $0.44; $0.25; $0.235 5. 10 ounces
ii. $0.088; $0.05; $0.047 6. 5 quarts
Best buy: Access America 7. 4.06m
iii. $0.69; $0.80; $1.41 8. 10.53m
iv. $0.023; $0.027; $0.047 9. 120 calories; 12 grams
Best Buy: Radiant Penny

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FIA- Contemporary Business Mathematics ANSWERS
Exercise 3.4
1. 10:7
2. 7:5
3. 5:6
4. 1/5 pages per min; 5 minutes per page
5. $8 per hour; 1/8 hours per $
6. 13 ounces is the best buy
7. 25 pounds is the best buy
8. 27 cats
9. 46 hits
10. $15.63
11. 3299 students
12. 68 feet
13. 27.5 hours
14. 511 calories
15. 14.7mg
16. 24900 fans
17. 8:3
18. Best buy is 75 feet
19. 7.5 hours
20. 0.5 teaspoon
21. 21 points
22. 1400mg; 160mg
23. 24
24. 36
25. 15
26. 1
27. 30
28. 6
29. 8
30. 60
31. 4.5
32. 2.5
33. 8
34. 8
35. 3 1/3
36. 7

Past Year Questions

1. C= $1680; S = $420
2. Youngest = $69k Mid = $78k Eldest = $87k
3. a) Size = 5.4m × 3m b) $4050
4. Medicine = 9oz water = 12oz
5. a) Beige = 73 Brown = 219
b) Supplier B

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FIA- Contemporary Business Mathematics ANSWERS
Chapter 4

Exercise 4.1

1. $9.78 13. 7.4%

2. $57.10 14. $1,360.54
3. $61.16 15. $27,000; $102,000
4. $74.92 16. $90; $3,690
5. $4,800 17. $1,950; $81,950
6. 29 days 18. $2,080; $62,080
7. 8% 19. $12,054.79; $412,054.79
8. $59.64 20. $924.66; $45,924.66
9. 225 days 21. $123.63; $9,623.63
10. $8,500 22. $67.81 $5,067.81
11. $93.08 23. $2,010; $52,010
12. 74 days

Exercise 4.2

1. $1259.71 18. $4,381.60

2. $1464.10 19. $104,052.80
3. $18 20. $46,140.66
4. $72 21. $18,769.08
5. 5% 22. $2,062.89
6. 14% 23. 14
7. 8% 24. $22,510.39
8. 8% 25. $2,049.98
9. 21% 26. $7,590.85
10. $7,622.93; $1,622.93 27. $13,327.49
11. $2,079.35; $1,329.35 28. $7,142.88
12. 8; $17,600 29. $16,043.41
13. $374,499.03; $361,999.03 30. $31,622.59
14. $5,719.80; $719.8 31. $6,500.32
15. $18,336.84; $3,886.84 32. $1,750.70
16. 9; $5700 33. $36,430.71
17. 10 34. $308.99

Exercise 4.3

1. a) A = $2679.50; B = $1947.45; C = $256.42

b) $2282.06

2. a) A = 1.015; B = $732.52; C = $4.74

b) $54.74

3. a) $1640
b) $129.08

4. $1253.64

5. a) $6390; $177.50
b) $6012; $142.00

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FIA- Contemporary Business Mathematics ANSWERS

Past Year Questions

1. Plan B; $19,340
2. $1,260
3. (i) $16,800 (ii) $8,200
4. (a) $49.32 (b) $344.18 (c) $393.50
(d) 7.86% (e) $229.5 (f) $164
(g) $421 (h) Supersaver
5. (a) End year 1: $21,018.91, $1018.91;
End year 2: $22,089.73, $1070.82;
(b) $2,089.73
(c) $28,319.85
6. (a) $96,000 (b) Bank B; due to lower interest charged ($2,402.63)

Chapter 5

Exercise 5.1

1. a) $2000 b) increasing, 4% c) $2631.86

2. a) 𝑦 = 64(0.5)𝑡 b) 8 teams c) 6 rounds
3. $24435.19
4. $5583.86
5. 92,095,349 persons
6. Show that r ~ 1.08 → increase by 8%
7. Show that r ~ 0.955 → decrease by (1-0.955 = 0.045) or 4.5%
8. ~ 61 million
9. ~ 6055 animals
10. a) A = 80; k = 1.08 b) 8% c) 1183 members
11. ~ 1197 frogs
12. a) P = 63 b) P = 38 c) a = 0.9125; k = 80
d) P = 80
13. a) k = 80; a = 0.9125 b) ~ 24

Exercise 5.2

1. P = 350 (1.4)t ; 1882

2. i) $180
ii) $248
3. a) Increasing, a > 1
b) 20 birds
c) r = 8 → % of increase = 700%
4. a) V = 31900 (0.92)t
b) $27000.16
5. a) Ro = 74.72kg
b) R = 34.89kg
6. 237 people
7. 317 million; 8.7 decades/87 years.
Past Year Questions

1. a. PA is decreasing and PB is increasing

b. PAO = 10000 animals and PBO = 1000 animals
c. % of decrease in animal A = 19% and % of increase in animal B = 9%
d. PA = 5300 animals and PB = 1300 animals

2. a. 500 thousand dollars b. 5.65%

c. 1.1409 million dollars d. year 2021

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FIA- Contemporary Business Mathematics ANSWERS

Chapter 6

Exercise 6.1

1. 32 44. 10,207
2. 9 45. 10,196
3. 10% 46. $68
4. 200% 47. 10pint/min
5. 12.5% 48. 12 breaths/min
6. 66.67% (2 dp) 49. 27 gal
1 1
7. a) 11in, b) 93 in c) 8in, d) 21 3 in, e) 50. 700 feet
51. 72
12in fi)11in, fii)10.5in
52. 4
8. a) 47 b) 48
53. 7
9. 200
54. 6
10. 25
55. 25
11. 671 billion
56. 42
12. 131.6mil
57. Sister -30 years, me – 21 years old
13. 67%
58. Husband - $18,000, Lien - $19,500
14. $20
59. Comp - $1,100; printer - $220
15. B ($100)
60. 9
16. 87.50%
61. 36 years old
17. h < 133
62. 31 lbs
18. 250 calories
63. Ed – 242, Marge – 336
19. 570 calories
64. C1 - $83,500; C2 – 65,500
20. 710 calories
65. Sat – 42,000; Sun – 14,000
21. 21, $119,400
66. 34cm, 44cm
22. 2,011 feet
67. 12feet, 19feet
23. $2,366
68. 21feet, 29feet
24. -22˚
69. 42cm, 48cm
25. $212
70. a) 19yard
26. -13˚
b) 6feet, 12feet
27. Lose 43 yard
c) 5in, 13in
28. 295 students
d) 10cm
29. 204 calories
e) 30yd, 90yd
30. 4,940 customers
f) 33ft, 28ft
31. 500 feet
32. $24
33. 27,010 feet
34. 90 feet below surface
35. $3,175
36. $363
37. $6,475
38. 48mg
39. a) $2,100
b) Jan -700 Apr 900
Feb -100 May 0
March 700 June 700
c) Jan; April
d) $1,850
40. $760
41. 160g
42. 120 lbs
43. 6
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FIA- Contemporary Business Mathematics ANSWERS

Past Year Question

1. An electrician charges $40 per hour, for labour plus $50 for each house call.
a) Cost, C = Hourly charge, h = labour charge; C = 40h + 50
b) Chargeable hours = 2.5; C = $150
2. Josh’s age is = 9 years old
3. 1st worker x = 5 hours; 2nd worker y = 10 hours; 3rd worker z = 30 hours
4. Landscape = 75 pieces; Seascape = 90 pieces
5. Adult = $210; Child = $105; Reserve = $6

Chapter 7
Exercise 7.1
1. m = 2; Equation: y = 2x +1
3
2. x intercept = ( 5 , 0 ); y intercept = ( 0, -3)

y
8
6
y = 5x - 3
4
2
x
0
-2 0 3/5 1 2
-4

3.
y
8
6
3y = -6x +15
4
2
0 x
-2 0 1 2 3

4. m = 3; y -intercept = (0, -4)

5. m = 0; Equation: y = 2
6. m = − 4, y = -4x

Exercise 7.2
Question 1
1a i) Since C is dependent on the number of kiloliters used, hence C is a dependent variable and k is an independent
variable Graph of C on k
ii) C = 0.8k + 27 C
b) $60.60
c) $47.10 C = 0.8k + 9
d) 52 kiloliters 9
e)
k
0

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FIA- Contemporary Business Mathematics ANSWERS

Question 2
i. C = 30h + 40
ii. C is a dependent variable as it depends on the number of hours, h of repairs work. h is the independent
variable.
iii. Fixed cost: $40
iv. Gradient is $30 per hour. This means that for every hour of repair work, the cost is increase by $30
v. C = $115
vi. h = 4.25 hours
vii. Sketch the graph of C = 30h + 40
Graph of C on h
C

C = 30h + 40
40
h

Question 3

a) C is a dependent variable as it depends on the number of hours, n required to play. n is the independent
variable
b) C = 150n + 250 f) Graph of C on n
c) C = $850
d) C = $1,600
e) n = 2.5 hours

Question 4
a) At start means when n = 0, R = 1600
b) Daily usage = 50 reams
c) R = - 50n + 1600
d) 50 reams
e) Dylan should have ordered on July 26th

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FIA- Contemporary Business Mathematics ANSWERS

Question 5
a) (i) $4,500 (ii) $10,500
b) S : Dependent variable as S depends on v; v : Independent variable
c) S = 0.01v + 500
d) Draw a graph of S = 0.01v + 500

Graph of S on v
S
12000
10000
S = 0.01v + 500
8000
6000
4000
2000
v
500
0
0 200000 400000 600000 800000 1000000

e) The S intercept of 500 means that Jamie’s salary is $500 even when he fails to sell any property within a
fortnight.
The gradient of 0.01 is the rate of salary. This means that for every $100 of sales that Jamie makes, his
salary will increased by $1.
f) v = $250 000

Question 6
a) C : Dependent variable as C depends on n; n : Independent variable
b) Hire All : C1 = 30n + 40 Rent from us : C2 = 25n + 60
b)
Graph of C on n
C
250
C1 = 30n + 40
200
(4, 160)
150
C2 = 25n + 60
100
50
n
0
0 1 2 3 4 5 6

c) (i) Hire All: C1 = $55 (ii) Rent from us: C2 = $72.50

(i) Hire All: C1 = $190 (ii) Rent from us: C2 = $185
d) (i) Hire All: C1 = $145 (ii) Rent from us: C2 = $147.50

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FIA- Contemporary Business Mathematics ANSWERS

Past Year Questions

Question 1
a) Y = 0.3x + 30
b) Payment, Y = $97.50
c) Yes, Wendy needs to pay $30 for the mobile phone service provider.
d)

Y Graph of Y on
140 x
120 Y = 0.3x + 30
100
80
60
40
3
20
0 x
0
0 50 100 150 200 250 300

Question 2
a) C : Dependent variable as C depends on k
k : Independent variable
b) C = 0.32k + 6
c) C = $17.20
d) k  72.2 kiloliters
f) $2 each

Graph of C on k
C
35
30 C = 0.32k + 6
25
20
15
10
56
0 k
0 10 20 30 40 50 60 70 80

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FIA- Contemporary Business Mathematics ANSWERS

Exercise 7.3
Question 1
H=280cal; F = 540cal
Question 2
C=130; W = 70
Question 3 – similar with Question 6 in Exercise 5.2
Question 4
a) C = 0.2k + 50
b) C = 0.15k + 70
c) From graph, the estimated intersection point is
(k = 400, C = 130)

Graph of C on k
C
180
160
140 (400, 130)
120
100 C = 0.15k + 70
80
70
60
50 C = 0.2k + 50
40
20
0 k
0 100 200 300 400 500 600

d) Sketchy: C = 0.2k + 50 ---------- (1)

Rent–A–Heap : C = 0.15k + 70 ---------- (2)
At intersection point, cost from both Sketchy and Rent A Heap are the same
 0.2k + 50 = 0.15k + 70
k = 400 km
 C = $130
 This means that when the total distance travelled is 400km, the cost from both company,
Sketchy and Rent–A–Heap is the same.
e) From the graph, Rent–A–Heap is cheaper when the distance travelled, k is more than 400km  k
> 400km

5) cars= 35; vans= 45; cost= 250

6) Standard boots: 2500pairs; Work boots: 2625 pairs
7a) Plan 1: $10; Plan 2: $20; Plan 3: $40
8
b) Plan 1: Gradient = 9
Interpret: For every 9 mins of call, the cost is increased by $8
3 2
Plan 2: 5; Plan 3: 5
(Use the same interpretation from as before)
8 2 2
c) Plan 1: C1 = 9 t + 10 Plan 2: C2 = 3 t + 20 Plan 3: C3 = 5 t + 40
d) t < 34mins
e) From graph, Plan 3 would be cheapest when t > 100mins
f) Number of minutes, t = 100 mins; Cost, C = $80
g) Expected total time spent on calls per month.

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FIA- Contemporary Business Mathematics ANSWERS

Exercise 7.4

1. At break-even point, number of item sold, n = 320 and the cost at this point is C = $14,440
2. a) Revenue, R = 0.5n
b) Cost, C = 0.05n + 18
c) Number of sausages, n = 40
d) Profit = $90
3. Farmer must produce at least 180kg of apples to avoid loss.
4. a) R = 1.5x C = 0.5x + 400
b) Fixed cost = $400
c) At break-even point,
x = 400, Cost, C is equal revenue, R = $600
5. a) Cost, C = 2x + 45
b) Revenue, R = 6.5x
c) Minimum of 11 cakes
d) Profit, P = 4.5x – 45
e) New sell price = $7 each cake
f) Profit = $126
6. a) C = mx + b m = 9 ; b = 18,000
C = 9x + 18000
b) Revenue, R = 25x
c) C = $63,000; R = $125,000
Since R > C, hence the company made a profit
d)

Graph of C/R on x
C and R
140000
120000
100000
80000
R = 25x
60000
40000 (1125, 28125)
C = 9x + 18000
20000
x
0
0 1000 2000 3000 4000 6000

e) 1,125 lamps.
f) P = 16x - 18000
g) P = $94,000
h (i) P = 16x -24000
(ii) 1,500 lamps
(iii) 2,250 lamps were produced and sold.

186
FIA- Contemporary Business Mathematics ANSWERS

Past year Question

Question 1
a) 235 kettles
b) R = C = $15,040
c) Show the break-even point on a diagram

Graph of C on n
C
25000
Break-even point
20000
( 235, 15040)
C = 9n + 12925
15000

10000

5000 R = 64n

0 n
0 50 100 150 200 250 300

d) Minimum number of kettle = 236

e) $55

Question 2

a) 1200 bulbs
b) R = C = $1,380
c) Show the break-even point on a diagram

Graph of C on n
C Break-even
1800
point
1600
( 1200, 1380)
1400
1200
C = 0.6n + 660
1000
800
600
400
R = 1.15n
200
n
0
0 200 400 600 800 1000 1200 1400

d) Minimum number of bulbs= 1201

e) Minimum Profit = $0.55
e) There is a loss of $137.50

187
FIA- Contemporary Business Mathematics ANSWERS

Chapter 8
Exercise 8.1
1. x = -3, -2, -1, 0, 1
2. n = -1, 0, 1
3. -2.67  n < 2
4. x = 3
Exercise 8.3
Question 1 - 96 units of standard model and 18 units of deluxe model.
Question 2 - a) 6x + 9y ≤ 300  2x + 3y ≤ 100
x  20
y  10
c i) R = 75x + 100y
ii) $3,625
iii) x = 35, y = 10

40.0 y y on x
x = 20
35.0

30.0

25.0
2x + 3y = 100
20.0

15.0
y = 10
10.0

5.0

0.0
x
0 10 20 30 40 50 60
-5.0

-10.0

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FIA- Contemporary Business Mathematics ANSWERS

Question 3 -

Let x = number of 1 bedroom

Let y = number of 2 bedroom

a) x + y ≤ 35
60x +80y ≤ 2400  3x + 4y ≤ 120
x  12
y  10
c i) P = 60 000x + 75 000y
ii) $2,325,000
iii) x = 20 units, y = 15 units
40.0 y y on x
x = 12

30.0

20.0

y = 10
10.0
3x + 4y = 120
0.0 x
0 10 20 30 40 50

-10.0
x + y = 35

-20.0

189
FIA- Contemporary Business Mathematics ANSWERS

Question 4 -

a) 40x + 80y  480  x + 2y  12

70x + 60y  600  7x + 6y  60
x0
y0
c) C = 30 000x + 40 000y
d) Factory M: 6 days
Factory N: 3 days
Minimum cost = $300,000

12.0y y on x
10.0

8.0

6.0

4.0
x + 2y = 12
2.0

0.0 x
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
-2.0

-4.0

-6.0

-8.0 7x + 6y = 60

-10.0

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FIA- Contemporary Business Mathematics ANSWERS

Question 5 -

a) 5x + 8y ≤ 4750
x + y ≤ 800
x  0; x ≤ 550
y  0; y ≤ 400
c) P = 14 000x + 15 000y
d) Maximum profit = $11,450,000
1-tonne truck: 550
3-tonne truck: 250

y on x

191
FIA- Contemporary Business Mathematics ANSWERS

Question 6 -
Let x = number bottles of red wine
Let y = number bottles of white wine
a) x + y ≤ 150
x ≤ 2y  y  0.5x
9x + 12y ≤ 1500  3x + 4y ≤ 500
x0
y  0; y ≤ 120;
c) P = 7x + 4y
d) Maximum profit = $900
Number red wine, x = 100 bottles
Number white wine, y =50 bottles

300.0 y y on x
250.0
3x + 2y = 500
200.0

150.0

100.0

50.0
x + y = 200
0.0 x
0 50 100 150 200 250
-50.0

-100.0

-150.0

-200.0

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FIA- Contemporary Business Mathematics ANSWERS

Question 7
a. h > 15; p < 25; h + p > 40; h + p < 60; p≥h

Graph of p against h

h=15

p=h

60

B(15, 45)

40

ROI
C(30, 30)
p=25
25
A(15, 25) D(25, 25)

h + p = 60
h + p = 40

0 40 60 h
15

corner points (h, p) Cost = 15h + 5p Revenue = 19.5h +10.20p Profit = 4.5h + 5.2p

15 25 350 547.50 197.5

15 45 450 751.50 301.5

30 30 600 891.00 291

25 25 500 742.50 242.5

193
FIA- Contemporary Business Mathematics ANSWERS

Past Year Question

Question 1
a) 2x + y ≤ 640
4x + 5y ≤ 2000
x  100
y  120
c) Profit, P = 4x + 6y
d) Maximum profit = $2,320
x = 100
y = 320

700.0 y y on x
600.0 2x + y = 640
500.0

400.0

300.0 4x + 5y = 2000
200.0

100.0
x
0.0
0 50 100 150 200 250 300 350 400 450 500
-100.0

-200.0

194
 CONTEMPORARY BUSINESS MATHEMATICS

FOUNDATION IN ARTS
FINAL EXAMINATION

INTAKE : JANUARY 2016

SEMESTER : ONE (1)
SUBJECT TITLE : CONTEMPORARY BUSINESS
MATHEMATICS
SUBJECT CODE : PMTH001

TIME ALLOWED FOR THIS PAPER:

Reading time before commencing work : TEN (10) minutes
Working time for the paper : THREE (3) hours

MATERIALS ALLOWED
Standard items : Pens, Pencils, Eraser, Correction fluid/tape, Ruler, Highlighters.
Special items : Non- programmable calculators, Authorised dictionary without
thesaurus and translations, NO digital dictionaries allowed.

IMPORTANT NOTE TO CANDIDATES

It is your responsibility to ensure that you do not have any unauthorised notes or other items
of a non-personal nature in the examination room. If you have any unauthorised material with
you, hand it to the supervisor/invigilator before reading any further.

DO NOT REMOVE THIS QUESTION PAPER FROM THE EXAMINATION HALL

STUDENT ID : _______________________________________

195
 CONTEMPORARY BUSINESS MATHEMATICS

STRUCTURE OF THIS PAPER

Number of Number of Suggested

Marks
Section questions questions to working time Answer in
available
available be answered (minutes)
30 minutes 20 marks Question
A 5 5
per question each question paper
Total Marks 100 Marks

INSTRUCTIONS TO CANDIDATES

1. There are THIRTEEN (13) pages (excluding this page, the cover page).

2. This question booklet contains only ONE (1) Section:-

Answer ALL questions in this question booklet.

Write your answer in the spaces provided in this booklet.
Each question is worth 20 marks.
Suggested working time is 30 minutes per question.

FORMULA SHEET

nt
 r
I=P.r.t F = P 1 + 
 n

196
 CONTEMPORARY BUSINESS MATHEMATICS

This question booklet has FIVE (5) questions.

Each question is worth 20 marks.
Answer ALL questions in the space provided in this booklet.
Total marks per question : 20 marks
Suggested working time : 30 minutes per question

QUESTION 1
a. Oscar loves cheese burgers. He enters a 24 hour cheese burger eating contest. During the
contest Oscar eats a cheese burger every 15 minutes. How many cheese burgers will he
eat during the entire contest? [2 marks]

b. Monique buys ½ kg of bananas at her local shop for $3.60. Her grandfather buys ¾ kg
of bananas from a different shop for $5.50.
Use calculations to show who has the better buy. [3 marks]

c. Patrick spends 75% of his income and saves the balance, when his income is increased
by 20% in March, he increases his expenditure by 10% from his expenses in February.
Patrick’s salary in February is RM3550. How much did he save in April? What is the
percentage of savings in April from his salary? [3 marks]

197
 CONTEMPORARY BUSINESS MATHEMATICS

d. A group of 266 persons consists of men, women, and children. There are four times as
many men as children, and twice as many women as children. How many of each are
there? [3 marks]

e. Twenty kilograms of nuts consisting of cashews worth $6.00 per kg, pecans worth $2.50
per kg and peanuts worth $1.50 per kg are mixed. If there are twice as many pecans as
cashews, and the total value of the nuts is $56, how much of each are there?
[4 marks]

f. This is a list of ingredients needed to make 24 Coconut cookies. Complete the amounts
needed to make 40 Coconut cookies. [5 marks]

1 cup rolled oats

1 cup plain flour
¾ cup brown sugar
¾ cup desiccated coconut
120 g butter, chopped 200 g butter chopped
2 tablespoons golden syrup
1 teaspoon bicarbonate of soda 1 ⅔ teaspoon bicarbonate of soda

[TOTAL : 20 MARKS]

198
 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 2
Richard wants to paint his barn. The measurements of his barn is shown as below:

1
12 m

1
43 m

1
62 m 10 m

a. Determine the area that needs to be painted to the nearest hundredths of m2. He will
paint the door, front, back and sides of the barn but not the roof. [3 marks]

b. How many litres of paint is needed if Richard wants to have two coatings of paint and
from his previous experiences he knows that three-quarters of a litre of paint is sufficient
to cover an area of 20m2? Give your answer to the nearest litre. [3 marks]

199
 CONTEMPORARY BUSINESS MATHEMATICS

c. The colour that Richard prefers for his barn is available from three different suppliers.
After comparing the paint can size and its unit price from each supplier, the best price
and the discounts available are summarised in the table below. All paint have to be bought
by the can and only from the same supplier. Determine the unit price per litre based on
the table shown and the best buy. [4 marks]

Supplier A Supplier B Supplier C

Number of litres in a
1 litre 5 litre 7 litre
can
Price per can $42 $165 $190
Discounts available 15% 10% None
No of cans needed
Price after Discount
Price per Litre

d. Richard created a color he really likes for the roof by mixing purple and green paint in a
3:4 ratio. Then he learned that the purple paint is made by mixing red and blue paint in a
5:3 ratio. Richard has 560 mL of green paint, and he's going to buy red and blue paint to
mix with it to make his new paint color. How much red paint should Richard buy?
[4 marks]

200
 CONTEMPORARY BUSINESS MATHEMATICS

e. If there are 5 painters, it takes 9 days to complete the job. How many painters must
Richard hire if he wants the job completed in 3 days? [3 marks]

f. How much does Richard spend in total for the painting job if he has to pay each painter
$35 a day? [3 marks]

[TOTAL : 20 MARKS]

201
 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 3
a. At the beginning of 2014, Rishi deposited $2500 into a bank account earning interest at
the rate of 7% per year. He does not make any further deposits or withdrawals.
i. Complete the table below to show the amount of money in Rishi’s account at
the beginning of 2015 and 2017. [2 marks]

Year 2014 2015 2016 2017 2018

Amount of Money, ($A) 2500 2862.25 3276.99

ii. Approximately how long does it take, to the nearest year for Rishi to obtain a
minimum of RM9250 when RM5000 is invested at the rate of 8% compounded
quarterly? [4 marks]

b. The advertisement on the right states that $1,000 left on

deposit for 5 years earning 8.75% compounded semi-
annually would result in the same balance as $1,000
earning 10.69% simple interest. Determine if the
advertisement is correct. [4 marks]

202
 CONTEMPORARY BUSINESS MATHEMATICS

c. A $26, 425 Perodua Axia can be purchased with a deposit of $7, 321.57 and 47 monthly
repayments of $577.16 with a forty-eighth repayment of $909.00.
i. Determine the amount financed (borrowed). [1 mark]

ii. What is the total of all the repayments? [1 mark]

iii. Determine the simple interest charged, SI. [1 mark]

iv. Determine the interest rate, r in %, charged each year to 4 d.p. [1 mark]

v. What increase in repayments would be necessary to buy the car with the same deposit
and 48 equal monthly repayments? [2 marks]

vi. A second bank offers financing at the rate of 9% simple interest per annum for 5
years. Determine the repayment amount per month and which financing scheme is
the cheaper option overall. [4 marks]

[TOTAL : 20 MARKS]

203
 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 4
a. E-Video, a new online store, allows you to download songs and videos. All songs cost
the same amount to download and all videos cost the same amount to download.
Julian downloads 3 songs and 4 videos for a total of $18.
Cherise downloads 10 songs and 2 videos for a total of $26.
Let x be the cost of a song download in dollars ($), and let y be the cost of a video
download in dollars ($).
i. Write two equations in x and y for the above information. [2 marks]

ii. By solving the two equations in part (a)(i), determine the cost of downloading each
song and each video. [2 marks]

iii. Their friend Alicia is only given $20 to spend. She wants to buy five songs and two
videos. Does she have enough money? Justify your answer. [3 marks]

204
 CONTEMPORARY BUSINESS MATHEMATICS

b. A bus from Leyland Co. costs $200 to hire. There is an additional charge of $2 per
kilometre travelled.
i. Complete the table below to give the total cost ($C) for the hire of the bus. [2 mark]
Distance (D km) 0 10 20 30 40
Total Cost ($C) 240

ii. Plot points from the table in part (b)(i) on the axes below and join them. [1 mark]

iii. Write an equation relating the cost, C, and the distance, D. [1 mark]

iv. Determine the total cost of hiring the bus for an 80 km trip. [1 mark]

205
 CONTEMPORARY BUSINESS MATHEMATICS

v. John has $450. What is the maximum number of kilometres he can travel if he wishes
to hire this bus? Show your workings. [2 marks]

The Greyhound company charges $150 for hire and $3.25 per kilometre travelled.

vi. Write a formula for the cost to hire The Greyhound plot this on the graph above.
[2 marks]

vii. Madeline is deciding whether to hire Leyland Co. or The Greyhound for her company
trip to Penang. She wants to choose the cheaper company. She needs to travel 100
km. Which company should she choose? Justify your answer with calculations.
[2 marks]

viii. Emily wants to give her boss some advice about which bus company to choose so
that his total cost is always the cheapest. What advice should Emily give her boss?
[2 marks]

[TOTAL : 20 MARKS]

206
 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 5

a. Determine the inequalities that define the shaded region shown on the axes below given
that P, Q and R have coordinates (2, 5), (6, 0) and (0, 7.5) respectively. [2 marks]

b. A family is going camping for a week and will be taking their pet with them. They can
only find room for five kilograms of food for their pet and will bring only two types of
pet food, type X and type Y. Each kilogram of type X food has 10 grams of fat, 9 grams
of carbohydrate and 12 grams of protein. Each kilogram of type Y has 15 grams of fat, 9
grams of carbohydrate and 6 grams of protein. The pet will need at least 30 grams of fat,
27 grams of carbohydrate and 24 grams of protein for the week.

The cost of type X food is 20 cents per kilogram and type Y is 30 cents per kilogram.
Let x = number of kilograms of type X food and let y = number of kilograms of type Y
food.
i. Given that x ≥ 0 and y ≥ 0, state FOUR (4) further inequalities involving x and y.
[4 marks]

207
 CONTEMPORARY BUSINESS MATHEMATICS

ii. Graph these inequalities on the grid below and shade the feasible region. [5 marks]

iii. Write a linear relationship as an objective function for cost $C. [1 mark]

iv. Determine the optimal amounts of each type of pet food to minimise the cost. State
this minimum cost. [5 marks]

v. To ensure a larger amount of type Y food, by how much should the price per kilogram
of type Y food fall to maintain the minimum cost from part (iii)? [3 marks]

[TOTAL : 20 MARKS]
END OF QUESTIONS

208
 CONTEMPORARY BUSINESS MATHEMATICS

FOUNDATION IN ARTS
FINAL EXAMINATION

INTAKE : MARCH 2016

SEMESTER : ONE (1)
SUBJECT TITLE : CONTEMPORARY BUSINESS
MATHEMATICS
SUBJECT CODE : PMTH001

TIME ALLOWED FOR THIS PAPER:

Reading time before commencing work : TEN (10) minutes
Working time for the paper : THREE (3) hours

MATERIALS ALLOWED
Standard items : Pens, Pencils, Eraser, Correction fluid/tape, Ruler, Highlighters.
Special items : Non- programmable calculators, Authorised dictionary without
thesaurus and translations, NO digital dictionaries allowed.

IMPORTANT NOTE TO CANDIDATES

It is your responsibility to ensure that you do not have any unauthorised notes or other items
of a non-personal nature in the examination room. If you have any unauthorised material with
you, hand it to the supervisor/invigilator before reading any further.

DO NOT REMOVE THIS QUESTION PAPER FROM THE EXAMINATION HALL

STUDENT ID : _______________________________________

209
 CONTEMPORARY BUSINESS MATHEMATICS

STRUCTURE OF THIS PAPER

Number of Number of Suggested

Marks
Section questions questions to working time Answer in
available
available be answered (minutes)
30 minutes 20 marks Question
A 5 5
per question each question paper
Total Marks 100 Marks

INSTRUCTIONS TO CANDIDATES

1. There are THIRTEEN (13) pages (excluding this page, the cover page).

2. This question booklet contains only ONE (1) Section:-

Answer ALL questions in this question booklet.

Write your answer in the spaces provided in this booklet.
Each question is worth 20 marks.
Suggested working time is 30 minutes per question.

FORMULA SHEET

nt
 r
I=P.r.t F = P 1 + 
 n

210
 CONTEMPORARY BUSINESS MATHEMATICS

This question booklet has FIVE (5) questions.

Each question is worth 20 marks.
Answer ALL questions in the space provided in this booklet.
Total marks per question : 20 marks
Suggested working time : 35 minutes per question

QUESTION 1
a. The diagram below shows how the water level of a river went down during a drought.\

The measurements are in metres.

i. By how many metres did the water level go down? [2 marks]

ii. A heavy rainfall followed the drought and the water level went up by 1.6 metres. What
was the water level after the rainfall? [2 marks]

A researcher found out that actually the reading of the water level went wrong, all the
readings were actually 1.5 metres less.

iii. Find the reading of the water level at origin. [2 marks]

211
 CONTEMPORARY BUSINESS MATHEMATICS

iv. Find the reading of the water level after the rainfall. [2 marks]

b. Two shops, Food Mart and Jim’s store, both sell Kreemy Yoghurts.

i. At which shop are Kreemy Yoghurts give the better value for money? Show clearly all
your working and interpret it. [4 marks]

ii. What will be the price of 10 unit Kreemy Yoghurts if the unit price is £ 1.55? Give
answer to nearest hundredths. [2 marks]

212
 CONTEMPORARY BUSINESS MATHEMATICS

c. In 2007, a tourist changed 4000 Chinese Yuan into pounds (£) when the exchange rate was
£1 = 15. 2978 Chinese Yuan.
i. Calculate the amount he received, giving your answer correct to 2 decimal places.
[2 marks]

ii. In 2006, the exchange rate was £ 1 = 15.9128 Chines Yuan. Calculate the percentage
decrease in the number of Chinese Yuan for each £ 1 from year 2006 to year 2007.
[2 marks]

5
d. During April the probability that it will rain on any one day is 6 . How many days would it

be expected to rain? [1 mark]

2
e. On Monday the temperature of the city is 3℃, on Tuesday the temperature is 3 times lower.

Find the new temperature. [1 mark]

[Total: 20 marks]

213
 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 2
a. In 2001, there were 2190 commercial country music radio stations in the United States. By
2002, that number had declined to 2131. ( Source : M Street Corporation)

i. Find the change in the number of country music radio stations from 2001 to 2002.
[1 mark]

ii. If this change continues at the same trend, what will be the total change in the number
of country music stations four years after 2002? [1 mark]

iii. Based on your answer to part (ii), how many country music radio stations will there be
in 2006? [1 mark]

iv. What is the percentage decrease in the number of commercial country music radio
stations in the United States from 2001 until 2006? [2 marks]

b. A total of 925 tickets were sold for RM 5,925. If an adult’s ticket cost RM 7.50 and children's
ticket cost RM 3.00 each, how many tickets of each kind were sold? [5 marks]

214
 CONTEMPORARY BUSINESS MATHEMATICS

c. It costs 90 cents for The Striped Toothpaste Company to make, package and ship a tube of
toothpaste. The company also has "overhead costs" of $3000 per month. The company sells
(at wholesale) cartons of toothpaste at the price of $2.50 per tube.

i. How many tubes of toothpaste does the company need to sell to cover the fixed costs?
[2 marks]

ii. What is the profit if the company sold 5000 tubes of toothpaste in January? [2 marks]

iii. If the company gained a net profit of $7000 in February, how many tubes of toothpaste
did the company sell in that month? [2 marks]

iv. What is the percentage increase in profit from January to February? [2 marks]

d. Suppose that it takes Sally 3 hours to mow a lawn, and it takes Tom 4 hours to mow the
same lawn; Tom's mower is less powerful than Sally's. Without using algebra (x or other
variables) determine how long it would take Sally and Tom to mow the lawn if they worked
together (using both lawn mowers)? (Assume that each works at his/her standard speed and
they never get in each other’s way.) [2 marks]

[Total: 20 marks]

215
 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 3
a. Mimi wins the lottery and get $1,000,000. She decides to invest all of the money in a savings
account. However, her bank has two different plans.

Plan 1
The bank gives her a 6% interest rate and compounds the interest each month.

Plan 2
The bank gives her a 12% interest rate and compounds the interest every 2 months.

i. How much money would Mimi have in her account after 5 years if she uses Plan 1?
[2 marks]

ii. How much money would Mimi have in her account after 5 years if she uses Plan 2?
[2 marks]

iii. In 5 years from now, which plan will provide Mimi with more money? [1 mark]

216
 CONTEMPORARY BUSINESS MATHEMATICS

b. Lim invested in a boutique 3 years ago. Her investment is worth RM 3000 today. Assume
that the money is worth 14% compounded semi – annually.

i. Calculate the principal value of this investment. [2 marks]

ii. If she leaves the money in the account, how much would she have at the beginning of
the 5th year? [2 marks]

iii. What is the total interest earned at the end of the four years? [1 mark]

c. A commercial for a loan company states, “You only pay $0.16 a day for each $600
borrowed”. Amirah borrows $1800 for 240 days.

i. What amount will she repay altogether? [2 marks]

ii. What annual interest rate is the company actually charging if the interest charged is
based on ordinary interest rate? [2 marks]

217
 CONTEMPORARY BUSINESS MATHEMATICS

d. RM 9000 is invested for 7 years 3 months. This investment is offered at 12% compounded
monthly for the first 4 years and 12% compounded quarterly for the rest of the period.

i. Calculate the future value of this investment for the first 4 years? [2 marks]

ii. Calculate the future value of this investment for 7 years and 3 months? [2 marks]

iii. What is the total interest earned in this investment? [1 mark]

iv. What is the effective rate of interest received over the 7 years and 3 months on this
investment? [1 mark]

[Total: 20 marks]

218
 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 4

a. The given graph below is a graph of y versus x. By using the scales given:

i. Draw a straight line from (–1, 1) to (3, 5). [1 mark]

ii. Work out the gradient of this line. [1 mark]

219
 CONTEMPORARY BUSINESS MATHEMATICS

iii. Write down the equation of the above line in the form y = mx + c. [2 marks]

iv. On the same graph, draw a straight line for x = 4. [1 mark]

v. What are the coordinates of the intersection point between the two lines? [1 mark]

b. The cost, $C, of a party in Jasmine Hall for n people is calculated using the following
formula.

C = 130 + 4n

i. What will be the cost of the party if 25 people are attending the party? [1 mark]

Aaron has a party which costs $1138.

ii. How many people is this party for? [1 mark]

iii. What is the fixed cost of this party? [1 mark]

220
 CONTEMPORARY BUSINESS MATHEMATICS

Sivasamboo was advised by his friend Aditya, to have his birthday party in Rose Hall
instead of Jasmine Hall as it is cheaper. Sivasamboo has decided to invite 30 guests. The
cost per person is $ 6 and the rental for Rose Hall is $ 94.

iv. Write the equation of total cost, $C, for n people invited by Sivasamboo. [1 mark]

v. Help Sivasamboo to decide on the selection of the hall and give a valid reason for
your choice. Show all your calculations to support your choice. [3 marks]

vi. What is the minimum number of guests Sivasamboo needs to invite in order to choose
Jasmine Hall as the cheaper option? [2 marks]

221
 CONTEMPORARY BUSINESS MATHEMATICS

c. Chris wants to order DVDs over the internet. Each DVD costs $15.99 and shipping for the
entire order is $9.99. Chris has only $100 to spend.

i. Find a relationship between the cost $C, and the number (n) of DVD ordered. [1 mark]

ii. How many DVDs can Chris order without exceeding his $100 limit? [2 marks]

iii. Chris’s friend, Julia wants to order 7 DVDs over the internet together with him. How
much she has to pay if they both agreed to share the shipping cost equally. Round your
answer to nearest cents. [2 marks]

[Total: 20 marks]

222
 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 5

a. In order to ensure optimal health and thus accurate test results, a lab technician needs to feed
the rabbits a daily diet containing a minimum of 24 grams of fat, 36 grams of carbohydrates,
and 4 grams of protein. But the rabbits should be fed no more than five ounces of food a
day. Rather than order rabbit food that is custom-blended, it is cheaper to order Food X and
Food Y, and blend them for an optimal mix. Food X contains 8 grams of fat, 12 grams of
carbohydrates and 2 grams of protein per ounce at a cost of $0.20 per ounce. Food Y contains
12 grams of fat, 12 grams of carbohydrates and 1 gram of protein per ounce at a cost of
$0.30 per ounce.

Let x represent the number of ounces of Food X, and y the number of ounces of Food Y.

i. Write all the six relevant constraints for x and y. [5 marks]

ii. Graph all the constraints on the same set of axes and shade the feasible region.
[4 marks]

223
 CONTEMPORARY BUSINESS MATHEMATICS

iii. One of the constraints in a (i) is irrelevant to the system. Which constraint is irrelevant?
[1 mark]

iv. Based on all the information given, write out the objective function to minimise the
cost. [1 mark]

v. Using the corner point method, determine how many ounces of each food the lab
technician should serve daily to achieve the objective function. [5 marks]
Corner points

vi. What is the minimum and the maximum profit could be obtained by the company that
the lab technician is working for if the selling price of the optimal mix is $ 5.90?
[2 marks]

vii. Lab technician decides not to include Food X into the optimal mix. What is the
minimum and maximum ounces of Food Y can be used to prepare the optimal mix.
[2 marks]

[Total: 20 marks]

END OF QUESTIONS

224
 CONTEMPORARY BUSINESS MATHEMATICS

FOUNDATION IN ARTS
FINAL EXAMINATION – MARKING GUIDE

INTAKE : JANUARY 2016

SEMESTER : ONE (1)
SUBJECT TITLE : CONTEMPORARY BUSINESS
MATHEMATICS
SUBJECT CODE : PMTH001

TIME ALLOWED FOR THIS PAPER:

Reading time before commencing work : TEN (10) minutes
Working time for the paper : THREE (3) hours

MATERIALS ALLOWED
Standard items : Pens, Pencils, Eraser, Correction fluid/tape, Ruler, Highlighters.
Special items : Non- programmable calculators, Authorised dictionary without
thesaurus and translations, NO digital dictionaries allowed.

IMPORTANT NOTE TO CANDIDATES

It is your responsibility to ensure that you do not have any unauthorised notes or other items
of a non-personal nature in the examination room. If you have any unauthorised material with
you, hand it to the supervisor/invigilator before reading any further.

DO NOT REMOVE THIS QUESTION PAPER FROM THE EXAMINATION HALL

STUDENT ID : ___________MARKING GUIDE___________

225
 CONTEMPORARY BUSINESS MATHEMATICS

STRUCTURE OF THIS PAPER

Number of Number of Suggested

Marks
Section questions questions to working time Answer in
available
available be answered (minutes)
30 minutes 20 marks Question
A 5 5
per question each question paper
Total Marks 100 Marks

INSTRUCTIONS TO CANDIDATES

3. There are ELEVEN (11) pages (excluding this page, the cover page).

4. This question booklet contains only ONE (1) Section:-

Answer ALL questions in this question booklet.

Write your answer in the spaces provided in this booklet.
Each question is worth 20 marks.
Suggested working time is 30 minutes per question.

FORMULA SHEET

nt
 r
I=P.r.t F = P 1 + 
 n

226
 CONTEMPORARY BUSINESS MATHEMATICS

This question booklet has FIVE (5) questions.

Each question is worth 20 marks.
Answer ALL questions in the space provided in this booklet.
Total marks per question : 20 marks
Suggested working time : 30 minutes per question

QUESTION 1
g. Oscar loves cheese burgers. He enters a 24 hour cheese burger eating contest. During the
contest Oscar eats a cheese burger every 15 minutes. How many cheese burgers will he
eat during the entire contest? [2 marks]
(24 × 60) ÷ 15 = 96 burgers

h. Monique buys ½ kg of bananas at her local shop for $3.60. Her grandfather buys ¾ kg
of bananas from a different shop for $5.50.
Use calculations to show who has the better buy. [3 marks]
Monique : $3.60 → 500g, 1g → $0.0072
Grandfather : $5.50 → 750g, 1g → $0.0073
Monique has the better buy.

i. Patrick spends 75% of his income and saves the balance, when his income is increased
by 20% in March, he increases his expenditure by 10% from his expenses in February.
Patrick’s salary in February is RM3550. How much did he save in April and what is the
percentage of savings in April from his salary? [3 marks]

MONTH INCOME EXPENDITURE SAVING

February 3550 2662.50 887.50
March 4260 2928.75 1331.25
April 4260 2928.75 1331.25

(1331.25 / 4260) × 100 = 31.25%

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 CONTEMPORARY BUSINESS MATHEMATICS

j. A group of 266 persons consists of men, women, and children. There are four times as
many men as children, and twice as many women as children. How many of each are
there? [3 marks]
Men : Women : Children
4x : 2x : x
4/7 × 266 : 2/7 × 266 : 1/7 × 266
= 152 : = 76 : = 38

k. Twenty kilograms of nuts consisting of cashews worth $6.00 per kg, pecans worth $2.50
per kg and peanuts worth $1.50 per kg are mixed. If there are twice as many pecans as
cashews, and the total value of the nuts is $56, how much of each are there?
[4 marks]
Pecan : Cashew : Peanut
2x : x : 20 – 3x
2.5(2x) : 6x : 1.5(20 – 3x)
5x + 6 x + 30 – 4.5x = 56
x=4
8 : 4 : 8

l. This is a list of ingredients needed to make 24 Coconut cookies. Complete the amounts
needed to make 40 Coconut cookies. [5 marks]

1 cup rolled oats 1 ⅔ cup rolled oats

1 cup plain flour 1 ⅔ cup plain flour
¾ cup brown sugar 1 ¼ cup brown sugar
¾ cup desiccated coconut 1 ¼ cup desiccated coconut
120 g butter, chopped 200 g butter, chopped
2 tablespoons golden syrup 3 ⅓ tablespoons golden syrup
1 teaspoon bicarbonate of soda 1 ⅔ teaspoon bicarbonate of soda

[TOTAL : 20 MARKS]

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 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 2
Richard wants to paint his barn. The measurements of his barn is shown as below:

1
12 m

1
43 m

1
62 m 10 m

g. Determine the area that needs to be painted to the nearest hundredths of m2. He will
paint the door, front, back and sides of the barn but not the roof. [3 marks]
6 ½ × 4 ⅓ × 2 = 56 ⅓
4 ⅓ × 10 × 2 = 86 ⅔
½×1½×6½ ×2=9¾
56 ⅓ + 86 ⅔ + 9 ¾ = 152 ¾ = 152.75

h. How many litres of paint is needed if Richard wants to have two coatings of paint and
from his previous experiences he knows that three-quarters of a litre of paint is sufficient
to cover an area of 20m2? [3 marks]

(152.75 ÷ 20) × 2 × ¾ = 11.46 ~ 12 litres

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 CONTEMPORARY BUSINESS MATHEMATICS

i. The colour that Richard prefers for his barn is available from three different suppliers.
After comparing the paint can size and its unit price from each supplier, the best price
and the discounts available are summarised in the table below. All paint have to be bought
by the can and only from the same supplier. Determine the unit price per litre based on
the table shown and the best buy. [4 marks]

Supplier A Supplier B Supplier C

Number of litres in a
1 litre 5 litre 7 litre
can
Price per can $42 $165 $190
Discounts available 15% 10% None
No of cans needed 12 3 2
Price after Discount 428.40 445.50 380
Price per Litre 35.70 29.70 27.14

Best buy is Supplier C

j. Richard created a color he really likes for the roof by mixing purple and green paint in a
3:4 ratio. Then he learned that the purple paint is made by mixing red and blue paint in a
5:3 ratio. Richard has 560 mL of green paint, and he's going to buy red and blue paint to
mix with it to make his new paint color. How much red paint should Richard buy?
[4 marks]
P : G R : B
3 : 4 5 : 3
420 : 560 (5/8) × 420 : (3/8) × 420
262.5 : 157.5
Red paint is 262.5 litres
k. If there are 5 painters, it takes 9 days to complete the job. How many painters must
Richard hire if he wants the job completed in 3 days? [3 marks]
(5 × 9) ÷ 3 = 15 painters
l. How much does Richard spend in total for the painting job if he has to pay each painter
$35 a day? [3 marks]
15 × 35 × 3 = $1575
[TOTAL : 20 MARKS]

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 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 3
b. At the beginning of 2014, Rishi deposited $2500 into a bank account earning interest at
the rate of 7% per year. He does not make any further deposits or withdrawals.
ii. Complete the table below to show the amount of money in Rishi’s account at
the beginning of 2015 and 2017. [2 marks]

Year 2014 2015 2016 2017 2018

Amount of Money, ($A) 2500 2675 2862.25 3062.61 3276.99

ii. Approximately how long does it take, to the nearest year for Rishi to obtain a
minimum of RM9250 when RM5000 is invested at the rate of 8% compounded
quarterly? [4 marks]
9250 = 5000 × (1 + 0.08/4) 4×t
1.85 = 1.024t
4t log 1.02 = log 1.85
→ t = 7.766 ~ 8 years

b. The advertisement on the right states that $1,000 left on

deposit for 5 years earning 8.75% compounded semi-
annually would result in the same balance as $1,000
earning 10.69% simple interest. Determine if the
advertisement is correct. [4 marks]
Compound Interest
1000 × (1 + 0.0875/2) 2×5 = 1534.49
Simple Interest
1000 × 10.69/100 × 5 = 534.50
FV = 1000 + 534.50 = 1534.50
Advertisement is correct.

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 CONTEMPORARY BUSINESS MATHEMATICS

c. A $26, 425 Perodua Axia can be purchased with a deposit of $7, 321.57 and 47 monthly
repayments of $577.16 with a forty-eighth repayment of $909.00.
i. Determine the amount financed (borrowed). [1 mark]
26425 – 7321.57 = 19103.43

ii. What is the total of all the repayments? [1 mark]

(47 × 577.16) + 909 = 28035.52

iii. Determine the simple interest charged, SI. [1 mark]

28035.52 – 19103.43 = 8932.09

iv. Determine the interest rate, r in %, charged each year to 4 d.p. [1 mark]
8932.09 = 19103.43 × r × 4
r = 11.6891%

v. What increase in repayments would be necessary to buy the car with the same deposit
and 48 equal monthly repayments? [2 marks]
28035.52 ÷ 48 = 584.07
584.07 – 577.16 = 6.91

vi. A second bank offers financing at the rate of 9% simple interest per annum for 5
years. Determine the repayment amount per month and which financing scheme is
the cheaper option overall. [4 marks]
19103.43 × 0.09 × 5 = 8596.54
(19103.43 + 8596.54) ÷ 60 = $461.67
Second bank is the cheaper option as the interest amount is lower.
[TOTAL : 20 MARKS]

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 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 4
a. E-Video, a new online store, allows you to download songs and videos. All songs cost
the same amount to download and all videos cost the same amount to download.
Julian downloads 3 songs and 4 videos for a total of $18.
Cherise downloads 10 songs and 2 videos for a total of $26.
Let x be the cost of a song download in dollars ($), and let y be the cost of a video
download in dollars ($).
ii. Write two equations in x and y for the above information. [2
marks]
3x + 4y = 18
10x + 2y = 26

ii. By solving the two equations in part (a)(i), determine the cost of downloading each
song and each video. Give your answer in dollars and cents. [2 marks]
song = $2 and video = $3

iii. Their friend Alicia is only given $20 to spend. She wants to buy five songs and two
videos. Does she have enough money? Justify your answer. [3 marks]
20 – ((5 × 2) + (2 × 3)) = 4
Yes, she has enough money because there is a balance of RM 4.

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 CONTEMPORARY BUSINESS MATHEMATICS

b. A bus from Leyland Co. costs $200 to hire. There is an additional charge of $2 per
kilometre travelled.
i. Complete the table below to give the total cost ($C) for the hire of the bus. [2 marks]
Distance (D km) 0 10 20 30 40
Total Cost ($C) 200 220 240 260 280

ii. Plot points from the table in part (i) on the axes below and join them. [1 mark]

The Greyhound
Leyland
Co.

iii. Write an equation relating the cost, C, and the distance, D. [1 mark]
C = 2D + 200
iv. Determine the total cost of hiring the bus for an 80 km trip. [1 mark]
C = 2 (80) + 200 = $360

i. John has $450. What is the maximum number of kilometres he can travel if he
wishes to hire this bus? Show your workings. [2 marks]
450 = 2D + 200
D = 125 km

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 CONTEMPORARY BUSINESS MATHEMATICS

The Greyhound company charge $150 for hire and $3.25 per kilometre travelled.

vi. Write a formula for the cost to hire The Greyhound plot this on the graph above.
[2 marks]
C = 3.25D + 150

vii. Madeline is deciding whether to hire Leyland Co. or The Greyhound for her company
trip to Penang. She wants to choose the cheaper company. She needs to travel 100
km. Which company should she choose? Justify your answer with calculations.
[2 marks]
Leyland Co. = 2(100) + 200 = $400
The Greyhound = 3.25(100) + 150 = $475
She should choose Leyland Co. because it has lowest cost.

viii. Emily wants to give her boss some advice about which bus company to choose so
that his total cost is always the cheapest. What advice should Emily give her boss?
[2 marks]
2D + 200 = 3.25D + 150
D = 40 km
If Emily’s boss is travelling less than 40km he should use Leyland Co., however
if he is travelling more than 40km then The Greyhound is the best.

[TOTAL : 20 MARKS]

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 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 5

c. Determine the inequalities that define the shaded region shown on the axes below given
that P, Q and R have coordinates (2, 5), (6, 0) and (0, 7.5) respectively. [3 marks]

x > 2, y ≥ - 1.25x + 7.5

d. A family is going camping for a week and will be taking their pet with them. They can
only find room for five kilograms of food for their pet and will bring only two types of
pet food, type X and type Y. Each kilogram of type X food has 10 grams of fat, 9 grams
of carbohydrate and 12 grams of protein. Each kilogram of type Y has 15 grams of fat, 9
grams of carbohydrate and 6 grams of protein. The pet will need at least 30 grams of fat,
27 grams of carbohydrate and 24 grams of protein for the week.

The cost of type X food is 20 cents per kilogram and type Y is 30 cents per kilogram.
Let x = number of kilograms of type X food and let y = number of kilograms of type Y
food.
i. Given that x ≥ 0 and y ≥ 0, state FOUR (4) further inequalities involving x and y.
[5 marks]
10x + 15y ≥ 30
9x + 9y ≥ 27
12x + 6y ≥ 24
x+y ≤ 5

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 CONTEMPORARY BUSINESS MATHEMATICS

ii. Graph these inequalities on the grid below and shade the feasible region. [5 marks]

iii. Write a linear relationship as an objective function for cost $C. [1 mark]
$C = 0.2x + 0.3y
iv. Determine the optimal amounts of each type of pet food to minimise the cost. State
this minimum cost. [4 marks]
C = 0.2x + 0.3y
(3, 0) 0.2(3) + 0.3(0) = 0.6
(5, 0) 0.2(5) + 0.3(0) = 1.00
(0, 5) 0.2(0) + 0.3(5) = 1.50
(0, 4) 0.2(0) + 0.3(4) = 1.20
(1, 2) 0.2(1) + 0.3(2) = 0.80
The minimum cost is $0.60.
v. To ensure a larger amount of type Y food, by how much should the price per kilogram
of type Y food fall to maintain the minimum cost from part (iii)?
[3 marks]
By 10 cents to $0.20 [TOTAL : 20 MARKS]
END OF QUESTIONS

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 CONTEMPORARY BUSINESS MATHEMATICS

FOUNDATION IN ARTS
FINAL EXAMINATION – MARKING GUIDE

INTAKE : MARCH 2016

SEMESTER : ONE (1)
SUBJECT TITLE : CONTEMPORARY BUSINESS
MATHEMATICS
SUBJECT CODE : PMTH001

TIME ALLOWED FOR THIS PAPER:

Reading time before commencing work : TEN (10) minutes
Working time for the paper : THREE (3) hours

MATERIALS ALLOWED
Standard items : Pens, Pencils, Eraser, Correction fluid/tape, Ruler, Highlighters.
Special items : Non- programmable calculators, Authorised dictionary without
thesaurus and translations, NO digital dictionaries allowed.

IMPORTANT NOTE TO CANDIDATES

It is your responsibility to ensure that you do not have any unauthorised notes or other items
of a non-personal nature in the examination room. If you have any unauthorised material with
you, hand it to the supervisor/invigilator before reading any further.

DO NOT REMOVE THIS QUESTION PAPER FROM THE EXAMINATION HALL

STUDENT ID : ___________MARKING GUIDE___________

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 CONTEMPORARY BUSINESS MATHEMATICS

STRUCTURE OF THIS PAPER

Number of Number of Suggested

Marks
Section questions questions to working time Answer in
available
available be answered (minutes)
30 minutes 20 marks Question
A 5 5
per question each question paper
Total Marks 100 Marks

INSTRUCTIONS TO CANDIDATES

1. There are ELEVEN (11) pages (excluding this page, the cover page).

2. This question booklet contains only ONE (1) Section:-

Answer ALL questions in this question booklet.

Write your answer in the spaces provided in this booklet.
Each question is worth 20 marks.
Suggested working time is 30 minutes per question.

FORMULA SHEET

nt
 r
I=P.r.t F = P 1 + 
 n

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 CONTEMPORARY BUSINESS MATHEMATICS

This question booklet has FIVE (5) questions.

Each question is worth 20 marks.
Answer ALL questions in the space provided in this booklet.
Total marks per question : 20 marks
Suggested working time : 35 minutes per question

QUESTION 1
f. The diagram below shows how the water level of a river went down during a drought.

The measurements are in metres.

v. By how many metres did the water level go down? [2 marks]

-3.5m [2 marks]

vi. A heavy rainfall followed the drought and the water level went up by 1.6 metres. What
was the water level after the rainfall? [2 marks]

-0.9m [2 marks]

A researcher found out that actually the reading of the water level went wrong, all the
readings in the diagram above were actually 1.5 metres less.

vii. Find the reading of the water level at origin. [2 marks]

2.5m [2 marks]

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 CONTEMPORARY BUSINESS MATHEMATICS

viii. Find the reading of the water level after the rainfall. [2 marks]

0.6m [2 marks]

g. Two shops, Food Mart and Jim’s store, both sell Kreemy Yoghurts.

iii. At which shop are Kreemy Yoghurts give the better value for money? Show clearly all
your working and interpret it. [4 marks]

Unit price of Food Mart: £ 0.36 [1 mark]

Unit price of Jim’s Store: £ 0.35 [1 mark]

Jim’s Store give a better value as it has the lowest cost per unit. [2 marks]

iv. What will be the price of 10 unit Kreemy Yoghurts if the unit price is £ 1.55? Give
answer to nearest hundredths. [2 marks]

£ 1.55 × 10 = £ 15.50 [2 marks]

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 CONTEMPORARY BUSINESS MATHEMATICS

h. In 2007, a tourist changed 4000 Chinese Yuan into pounds (£) when the exchange rate was
£1 = 15. 2978 Chinese Yuan.
iii. Calculate the amount he received, giving your answer correct to 2 decimal places.
[2 marks]
4000/ 15.2978 = £ 261.48 [2 marks]

iv. In 2006, the exchange rate was £ 1 = 15.9128 Chines Yuan. Calculate the percentage
decrease in the number of Chinese Yuan for each £ 1 from year 2006 to year 2007.
[2 marks]

15.2978−15.9128
× 100 = - 3.86%
15.9128

Decreased by 3.86% [2 marks]

5
i. During April the probability that it will not rain on any one day is . How many days would
6

it be expected to rain? [1 mark]

1
6
× 30 = 5 days [1 mark]

2
j. On Monday the temperature of the city is 3℃, on Tuesday the temperature is 3 times lower.

Find the new temperature. [1 mark]

2
× 3 = 2℃
3

New temperature = 1℃ [1 mark]

[Total: 20 marks]

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 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 2

e. In 2001, there were 2190 commercial country music radio stations in the United States. By
2002, that number had declined to 2131. (Source : M Street Corporation)

v. Find the change in the number of country music radio stations from 2001 to 2002.
[1 mark]
Change = 2190 – 2131 = 59 [1 mark]

vi. If this change continues at the same trend, what will be the total change in the number
of country music stations four years after 2002? [1 mark]

Total change = 59 x 4 = 236 [1 mark]

vii. Based on your answer to part (ii), how many country music radio stations will there be
in 2006? [1 mark]

In 2006 = 2131-236 = 1895 [1 mark]

viii. What is the percentage decrease in the number of commercial country music radio
stations in the United States from 2001 until 2006? [2 marks]

Total change = 236 + 59 = 295 [1 mark]

Percentage decrease = (295/2190) x 100% = 13.47 % [1 mark]

f. A total of 925 tickets were sold for RM 5,925. If an adult’s ticket cost RM 7.50 and children's
ticket cost RM 3.00 each, how many tickets of each kind were sold? [5 marks]

x + y = 925 --------- (1) [1 mark]

7.5 x + 3 y = 5925 ----------- (2) [1 mark]
7.5 (925 – y) + 3 y = 5925
6937.50 – 7.5 y + 3 y = 5925 [1 mark]
- 4.5 y = -1012.50
y = 225 tickets [1 mark]
x = 700 tickets [1 mark]

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 CONTEMPORARY BUSINESS MATHEMATICS

g. It costs 90 cents for The Striped Toothpaste Company to make, package and ship a tube of
toothpaste. The company also has "overhead costs" of $3000 per month. The company sells
(at wholesale) cartons of toothpaste at the price of $2.50 per tube.

v. How many tubes of toothpaste does the company need to sell to cover the fixed costs?
[2 marks]

Profit for each tube = $2.50 - $0.90

= $1.60 [1 mark]

To breakeven = $3000 / $1.60

= 1875 tubes [1 mark]

vi. What is the profit if the company sold 5000 tubes of toothpaste in January?
[2 marks]

Total gross profit = 5000 x $1.60

= $8000 [1 mark]
Net profit = $8000 - $3000 = $5000 [1 mark]

vii. If the company gained a net profit of $7000 in February, how many tubes of toothpaste
did the company sell in that month?
[2 marks]

Gross profit = $7000 + $3000 = $10000 [1 mark]

Number of tubes = $10000/ $1.60 = 6250 tubes [1 mark]

viii. What is the percentage increase in profit from January to February? [2 marks]

Change in value = $7000 - $5000

= $2000 [1 mark]

Percentage increase = (2000/5000) x 100% = 40 % [1 mark]

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 CONTEMPORARY BUSINESS MATHEMATICS

h. Suppose that it takes Sally 3 hours to mow a lawn, and it takes Tom 4 hours to mow the
same lawn; Tom's mower is less powerful than Sally's. Without using algebra (x or other
variables) determine how long it would take Sally and Tom to mow the lawn if they worked
together (using both lawn mowers)? (Assume that each works at his/her standard speed and
they never get in each other’s way.) [2 marks]

Fraction of job done by Sally = 1/3 [1/2 mark]

Fraction of job done by Tom = 1/4 [1/2 mark]

Total fraction = 1/3 + 1/4 = 7/12 [1/2 mark]

If they worked together = 12/7 hours or 1.71 hours [1/2 mark]

[Total: 20 marks]

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 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 3
e. Mimi wins the lottery and get $1,000,000. She decides to invest all of the money in a savings
account. However, her bank has two different plans.

Plan 1
The bank gives her a 6% interest rate and compounds the interest each month.

Plan 2
The bank gives her a 12% interest rate and compounds the interest every 2 months.

iv. How much money would Mimi have in her account after 5 years if she uses Plan 1?
[2 marks]

Future Value = 1,000,000(1 + 0.06/12)60 [1 mark]

= $ 1,348,850.15 [1 mark]

v. How much money would Mimi have in her account after 5 years if she uses Plan 2?
[2 marks]

Future Value = 1,000,000(1 + 0.12/6)30 [1 mark]

= $ 1,811,361.58 [1 mark]

vi. In 5 years from now, which plan will provide Mimi with more money? [1 mark]

Plan 2 [1 mark]

f. Lim invested in a boutique 3 years ago. Her investment is worth RM 3000 today. Assume
that the money is worth 14% compounded semi – annually.

iv. Calculate the principal value of this investment. [2 marks]

3000 = P (1 + 0.14/2)6 [1 mark]

P = RM 1,999.03 [1 mark]

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 CONTEMPORARY BUSINESS MATHEMATICS

v. If she leaves the money in the account, how much would she have at the beginning of
the 5th year? [2 marks]

F = 1999.03 (1 + 0.14/2)8 [1 mark]

= RM 3,434.71 [1 mark]

vi. What is the total interest earned at the end of the four years? [1 mark]

Total interest earned = Future Value – Present Value

= 3434.71 – 1999.03

= RM 1435.68 [1 mark]

g. A commercial for a loan company states, “You only pay $0.16 a day for each $600
borrowed”. Amirah borrows $1800 for 240 days.

iii. What amount will she repay altogether? [2 marks]

Per day = $0.16 x 3 = $0.48 [1 mark]
For the 240 days = $0.48 x 240 = $115.20 +1800 = $1915.20 [1 mark]

iv. What annual interest rate is the company actually charging if the interest charged is
based on ordinary interest rate? [2 marks]

115.20 = 1800 x r x (240/360) [1 mark]

r = 0.096 x 100% [1/2 mark]

= 9.6 % [1/2 mark]

h. RM 9000 is invested for 7 years 3 months. This investment is offered at 12% compounded
monthly for the first 4 years and 12% compounded quarterly for the rest of the period.

v. Calculate the future value of this investment for the first 4 years? [2 marks]

Future Value = 9,000(1 + 0.12/12)48 [1 mark]

= RM 14,510.03 [1 mark]

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 CONTEMPORARY BUSINESS MATHEMATICS

vi. Calculate the future value of this investment for 7 years and 3 months? [2 marks]

Future Value = 14510.03(1 + 0.12/4)13 [1 mark]

= RM 21,308.47 [1 mark]

vii. What is the total interest earned in this investment? [1 mark]

Total interest earned = RM 21,308.47 – RM 9,000

= RM 12,308.47 [1 mark]

viii. What is the effective rate of interest received over the 7 years and 3 months on this
investment? [1 mark]

Effective Rate = (12,308.47/9,000 x 100%) = 136.76 % [1 mark]

[Total: 20 marks]

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 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 4

a. The given graph below is a graph of y versus x. By using the scales given:

i. Draw a straight line from (–1, 1) to (3, 5). [1 mark]

Graph and label [1 mark]

y=x+2

x=4

ii. Work out the gradient of this line. [1 mark]

m = (5-1) / (3+1)
=1 [1 mark]
iii. Write down the equation of the above line in the form y = mx + c. [2 marks]
y=x+2 [2 marks]

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 CONTEMPORARY BUSINESS MATHEMATICS

iv. On the same graph, draw a straight line for x = 4. [1 mark]

Graph and label [1 mark]

v. What are the coordinates of the intersection point between the two lines? [1 mark]
(4, 6) [1 mark]

b. The cost, $C, of a party in Jasmine Hall for n people is calculated using the following
formula.

C = 130 + 4n

i. What will be the cost of the party if 25 people are attending the party? [1 mark]
C = 130 + 4(25)
= $230 [1 mark]

Aaron has a party which costs $1138.

ii. How many people is this party for? [1 mark]

1138 = 130 + 4n
n = 252 guests [1 mark]

iii. What is the fixed cost of this party? [1 mark]

$ 130 [1 mark]

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 CONTEMPORARY BUSINESS MATHEMATICS

Sivasamboo was advised by his friend Aditya, to have his birthday party in Rose Hall
instead of Jasmine Hall as it is cheaper. Sivasamboo has decided to invite 30 guests. The
cost per person is $ 6 and the rental for Rose Hall is $ 94.

iv. Write the equation of total cost, $C, for n people invited by Sivasamboo. [1 mark]
C = 6n + 94 [1 mark]

v. Help Sivasamboo to decide on the selection of the hall and give a valid reason for
your choice. Show all your calculations to support your choice. [3 marks]

Jasmine Hall = 130 + 4 (30) =$250 [1/2 mark]

Rose Hall = 94 + 6(30) = $274 [1/2 mark]
Cheaper: Jasmine Hall [1 mark]
Reason: The total cost for Jasmine Hall is cheaper than Rose Hall [1 mark]

vi. What is the minimum number of guests Sivasamboo needs to invite in order to choose
Jasmine Hall as the cheaper option? [2 marks]
130 + 4n = 94 + 6n
n = 18 [1 mark]
Minimum guests: 19 guests [1 mark]

c. Chris wants to order DVDs over the internet. Each DVD costs $15.99 and shipping for the
entire order is $9.99. Chris has only $100 to spend.

i. Find a relationship between the cost $C, and the number (n) of DVD ordered.
[1 mark]
C = 15.99 n + 9.99 [1 mark]

ii. How many DVDs can Chris order without exceeding his $100 limit? [2 marks]

15.99 n + 9.99 = 100, n = 5.62 [1 mark]

Hence the maximum number of DVDs Chris can order is 5 [1 mark]

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 CONTEMPORARY BUSINESS MATHEMATICS

iii. Chris’s friend, Julia wants to order 7 DVDs over the internet together with him. How
much she has to pay if they both agreed to share the shipping cost equally. Round your
answer to nearest cents. [2 marks]
Payment = 15.99 (7) + (9.99/2)
= 116.925 [1 mark]
= 116.93 (2 d.p) [1 mark]

[Total: 20 marks]

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 CONTEMPORARY BUSINESS MATHEMATICS

QUESTION 5
b. In order to ensure optimal health and thus accurate test results, a lab technician needs to feed
the rabbits a daily diet containing a minimum of 24 grams of fat, 36 grams of carbohydrates,
and 4 grams of protein. But the rabbits should be fed no more than five ounces of food a
day. Rather than order rabbit food that is custom-blended, it is cheaper to order Food X and
Food Y, and blend them for an optimal mix. Food X contains 8 grams of fat, 12 grams of
carbohydrates and 2 grams of protein per ounce at a cost of $0.20 per ounce. Food Y contains
12 grams of fat, 12 grams of carbohydrates and 1 gram of protein per ounce at a cost of
$0.30 per ounce.

Let x represent the number of ounces of Food X, and y the number of ounces of Food Y.

viii. Write all the six relevant constraints for x and y. [5 marks]

8x + 12y > 24, 12x + 12y > 36, 2x + 1y > 4, x + y < 5 [4 marks]

x > 0, y > 0. [1 mark]

ix. Graph all the constraints on the same set of axes and shade the feasible region.
[4 marks]
6
y

y = -2x + 4
3

y = -x + 3
1 y = -2/3 x + 2
x=0 y=0 y = -x + 5
x
0
0 1 2 3 4 5 6

x. One of the constraints in a (i) is irrelevant to the system. Which constraint is irrelevant?
[1 mark]

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 CONTEMPORARY BUSINESS MATHEMATICS

8 x + 12 y > 24
xi. Based on all the information given, write out the objective function to minimise the
cost. [1 mark]

C = 0.2x + 0.3y

xii. Using the corner point method, determine how many ounces of each food the lab
technician should serve daily to achieve the objective function. [5 marks]
Corner points C = 0.2 x + 0.3 y
(0,4) $1.20
(0,5) $1.50
(3,0) $0.60
(5,0) $1.00
(1,2) $0.80

[2 marks]

Minimum costs = $0.60 [1 mark]

Food X = 3 ounces [1 mark]
Food Y = no need / 0 ounces [1 mark]

xiii. What is the minimum and the maximum profit could be obtained by the company that
the lab technician is working for if the selling price of the optimal mix is $ 5.90.
[2 marks]

Max profit = $5.90 - $0.60 = $5.30, Min profit = $5.90 - $1.50 = $4.40 [2 marks]

xiv. Lab technician decides not to include Food X into the optimal mix. What is the
minimum and maximum ounces of Food Y can be used to prepare the optimal mix.
[2 marks]

From the graph, Minimum = 4 ounces, Maximum = 5 ounces [2 marks]

[Total: 20 marks]

END OF QUESTIONS

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