Bachelor of Business Management Honors in

Accountancy/Auditing and Forensic

Accounting/Accounting Information
Systems Degree Programme

Business Mathematics
BACC-11633/BAFA 11233/BAIS 11033

Lecture Session- 01

Introduction to Business Mathematics;

Number Systems and Basic Mathematics

Dr. Anura Karunarathne,

Senior Lecturer-G1,
Department of Accountancy,
University of Kelaniya.
 Course Aims
The following aims are achieved through this
course unit;
❖ solve problems involving algebraic functions.
❖ apply mathematical techniques for financial decisions

making.
❖ apply differentiation and integration for the purpose

of profit maximization decisions in business and

finance.
❖ apply important quantitative techniques and
elementary applications for making corporate
decisions.
 Overall Learning Outcomes

Course Outline
BACC-11633/BAFA 11233/BAIS 11033
Business Mathematics
 Overall Learning Outcomes
Upon successful completion of the course unit, the student should be able to
perform the following tasks under each main topic of the course unit:
• Define key terms and concepts in basic
Define mathematics.
• Explain basic mathematical operations and
Explain algebraic functions.
• Use Factors, Indices & logarithms in order to
Use solve mathematical expressions and equations.
• Describe and solve business-related problems
Describe and solve through mathematical equations and expressions.
• Identify the mathematical techniques for financial
Identify decisions making.
• Use the concepts of Arithmetic and geometric
Use series to solve business problems.
• Define and perform differentiation using the limit
Define and perform approach and differentiation rules.
• Use differentiation knowledge to make decisions
Use in business and finance.
• Define and perform integration for making
Define and perform decisions in business and economics
 Lesson-01:
Fundamental Concepts of Algebra

At the end of the session students should be

able to;
❖Define and explain the concepts of Numbers
& Mathematical operations.
❖Explain the concepts and usage of Factors,
Indices & Logarithm.
 Lesson-02:
Mathematical Equations and
Analytical Geometry
At the end of the session students should be
able to;
❖Explain concepts and usage of Simple
Equations & Quadratic Equations.
❖Explain the concept and usage of
simultaneous equations
❖Slope, Intercept, Equation of a straight line,
Equation of simple curves
 Lesson-03:
Permutations, combinations, and
Its business applications
At the end of the session students should be
able to;
❖Set up and compute factorials
❖Calculate permutations and combinations
❖Solve applications involving permutations
and combinations
 Lesson-04:
Series & Progressions
At the end of the session students should be
able to;
❖Explain the concepts of Arithmetic and
arithmetic mean
❖Explain the concepts of geometric series
and Geometric mean
❖Applications on Arithmetic and Geometric
mean in Business decisions
 Lesson-05:
Mathematics for finance
At the end of the session students should be
able to;
❖Understand the concepts of Simple interest, Compound interest
and Annuities
❖Compute Present value, Future value of single Solve business
problems using present value and future value concepts and
applications
❖Compute Present value, Future value of multiple cash flows;
Regular annuities and Annuities due
❖Solve business problems using present value and future value
concepts and applications
 Lesson-06:
Calculus and its Applications;
Differentiation
At the end of the session students should be able
to;
❖Explain the definitions and concepts of
differentiation Rate of change and Limit
approach,
❖ Use rules of differentiation.
❖ Find turning points, Maxima and minima
points
❖ Use differentiation rules to solve the business
problem
 Lesson-07:
Calculus and its Applications;
Integration
At the end of the session students should be
able to;
❖Perform integration.
❖Find required functions by performing
integration.
❖Determine consumers’ surplus and producers’
surplus through integration.
❖Use integration to solve business problems.
 Lesson-08:
Matrices and its Applications;
Integration
At the end of the session students should be
able to;
❖Apply matrix algebra, the matrix transpose,
and the zero and identity matrices, to solve and
analyze matrix equations.
❖Apply the formal definition of an inverse, and
its algebraic properties, to solve and analyze
linear systems.
 Recommended Reading:
❖Sydsaeter, K., Hammond, P. J., Strom, A. &
Carvajal, A. M. (2021). Essential Mathematics for
Economic Analysis, 6th Edition, London: Prentice-
Hall Inc.
❖Jacques, I. (2018). Mathematics for Economics and
Business, 9th Edition, London: Pearson Education
Ltd.
❖Rosser, M. & Lis, P. (2016). Basic Mathematics for
Economists, 3rd Edition, New York: Routledge
Taylor & Francis.
 Panel of Lecturers

Course Lecturers Tutor(s)

Name: Dr. W.V.A.D. Karunarathne Name: Ms. W.T.N.M. Perera (NP)

(WVAD) Email: navini@[Link]
Email: anurawvadk@[Link]
Name: Mr. R.A.S. Rajapaksha (ASR)
Name: Dr. R.M.D.A.P. Rajapaksha Email: virajl@[Link]
(RMDAP)
Email: amilar@[Link] Name: Mr. M.H. Muthunayake (MH)
Email: himalm@[Link]
Name: Ms. W.T.N.M. Perera (NP)
Email: navini@[Link]
 Lecture Schedule
Lecturer
Week Topic
1 Fundamental concepts of algebra ; Numbers System & WVAD
Mathematical operations

2 Fundamental concepts of algebra; Factors, Indices & RMDAP

Logarithm
3 Mathematical Equations ; Simple Equations & Quadratic RMDAP
Equations.
4 Equations & Analytical geometry; simultaneous equations NP
,Slope, Intercept, Equation of a straight line, Equation of
simple curves
5 Permutations, combinations, and Its business applications NP
;compute factorials , Calculate permutations and
combinations, Solve applications involving permutations
and combinations
6 Series/Progressions; Arithmetic and arithmetic mean and WVAD
Business Applications
7 Mathematics for finance - I ;Simple interest, Compound WVAD
interest and Annuities, Compute Present value, Future value
of single Solve business problems using present value and
future value concepts and applications
 Lecture Schedule…
Week Topic Lecturer
8 Mathematics for finance - II ; Compute Present value, Future value of WVAD
multiple cash flows; Regular annuities and Annuity due, Solve business
problems using present value and future value concepts and applications

9 Calculus and its Applications; Differentiation – I; Explain the definitions and WVAD
concepts of differentiation , Rate of change and Limit approach,Use rules of
differentiation.
10 Calculus and its Applications Differentiation – II; Find turning points, WVAD
Maxima and minima points,Use differentiation rules to solve business
problem
11 & 12 Integral Calculus and its Applications; Perform integration,Find required WVAD
functions by performing integration,Determine consumers’ surplus and
producers’ surplus through integration,Use integration to solve business
problem

13 Matrix ;Apply matrix algebra, the matrix transpose, and the zero and WVAD
identity matrices, to solve and analyze matrix equations,Apply the formal
definition of an inverse, and its algebraic properties, to solve and analyze
linear systems.
14 Revision Session ;Details and Structure of evaluating end semester WVAD
examination and discuss the students’ subject issues.
(Q& A session)
 Learning Objectives
At the end of this unit, you should be able to,
❖Define terms number and number system
❖Discuss natural numbers
❖Convert numbers to other bases
❖Explain whole numbers
❖Explain integers
❖Discuss rational numbers
❖Explain irrational numbers
❖Draw a Venn diagram to show the number
system
❖Use the basic mathematical operations
Define Key Terms and
Concepts in Basic
Mathematics
 Math
Symbols
Math Symbols
 Mathematical
Signs
The signs used to show
“greater than or less than” are
“>” = greater than “<” = “less
than” 5 is greater than 4, 6 < 7 “6
is less than 7”.
What is the Simplest Form?

A fraction is not a whole

number but a number in
between whole numbers. It is
part of a whole. Also, a fraction
has two parts – a numerator
and a denominator.
Numeracy
Vocabulary
 Number is one of the foundation
concepts in mathematics and it is
quite different in concept with
numerals. Numerals are signs that
serve as a means of representing
numbers.
Number
System Number system generally is a
technique of representing
numbers by means of symbols.
Modern number systems are value
systems which an individual
number value is determined in
daily activities of life.
Write down all the different Numbers
that you can think of:
❖Fractions
❖Whole numbers
❖Decimals
❖Percentiles
❖Negatives
 Positive and Negative Numbers

•Between what 2 integers do the

following live?
•1/3, -5, -1/2, 4.2, |3|, |-3|
 Natural Numbers
All natural numbers are counting
numbers that have a definite
beginning but no end. The nature of
natural numbers is said to be
discrete.
They are usually referred to as
ordinal numbers. When they
denote order, the order should be in
magnitude, showing a unique
pattern of increase or decrease in
the arrangement at any given time.

1,2,3,4,5,6,7,8,9,……………….etc.
 Natural /Counting Numbers
Counting numbers group form the number bases used
for calculations.
Even numbers: they are natural numbers divisible by
2 ; Example 4,6,8,10,12,14,16…etc.
Odd numbers are natural numbers that are not
divisible by two; Example 1,3,5,7,9,11,13,15,17…etc.
Prime Numbers are natural numbers with no factor
other than, unity or itself; Example 3,5,7,11,13,..etc.
Square numbers are squares of natural numbers
raised to the second power; Examples are 4,9,16,25.
Cubic numbers are numbers that are the third power
of natural numbers; Example 8,27,64,125,216…etc.
 Whole Numbers
When zero is included to the set of natural
numbers we have what is called whole
numbers.

0,1,2,3,4,5,6,7,8,9,……………….etc.
 Integers
Integer is a whole numbers that do not have any form
of fraction associated with it.
An integer is a combination of positive, negative
numbers together with zero.
The positive numbers are usually called positive
integers,
The negative numbers are called negative integers,
While the positive and negative numbers are called
direct numbers.
……..-5,-4,-3,-2,-
1,0,1,2,3,4,5,6,7,8,9……………etc.
 Number Line

A number line is a straight line

that shows the ordering
property and position of The number line is divided into
integers. The line is made up equal parts to indicate the
of arrows ending at one or both position of the integers.
sides of the line indicating
continuity in the numbers or integers.
Number Line
Type of Numbers
 Real Number System
All of the numbers you have learned about so far in
math belong to the real number system. Positives,
negatives, fractions, and decimals are all part of the
real number system. The diagram below shows how all
of the numbers in the real number system are
grouped.
 Real Number System
All of the numbers you have learned about so far in math
belong to the real number system. The real number system
consists of every number you have ever dealt with since
you were old enough to count.
Positives, negatives, fractions, and decimals are all part of
the real number system. The diagram below shows how all
of the numbers in the real number system are grouped.
Sub-Categories of Real Numbers

❖ The numbers in the real number system are

divided into two main groups. One group is called
the rational numbers and the other is called the
irrational numbers.
❖ The set of irrational numbers consists of all
numbers that are not rational.
❖ This set of irrational numbers includes those
numbers that cannot be written as the ratio of
two integers, decimal numbers that are non-
terminating and decimals that do not have a
repeating pattern of digits. For example, pi(π),2–
√,−2.345876921… are irrational numbers.
 Rational Numbers
❖ A rational number is an expression of a ratio of two
whole numbers. It can take the form of V/Z or V ÷ Z
where V and Z are integers and Z is not equal to
zero at any time.
❖ A set of rational numbers X include the set of
integers as well as positive and negative fractions.
❖ Therefore, the set of integers is a proper subset of
the rational numbers.
❖ Example 2/4, 1/5, 12/3, 7, 81/8, - 1/3 etc

❖ The scope of rational numbers has no end in both

positive and negative numbers and also within each
numbers gap. Example between 0 and1, 1and 2, 2
and 3, 0 and -1, -3 and -4
 Irrational Numbers
❖ They are numbers that cannot be written
as exact fractions nor expressed as
terminating decimals. Irrational numbers
usually do not have exact values, usually
irrational numbers which are expressed in
the form of roots are known as surds.

❖ √2, √ 3, √7
❖ It should be noted that some numbers are
expressed in form of roots and have exact
terminating decimals are rational numbers
and do not fall in the category of irrational
numbers, example √4 √9 etc.
 Irrational Numbers
When two or more surds are to be multiplied together
they should first be simplified. Whole numbers should
be taken with whole numbers and surds with surds.
Example 6.
simplify √27 x √50 = √(9 x 3) x √(25 x 2) = 3 √3 x 5 √2
= 15√6
Example 7. multiply the irrational numbers (surd)
√12 x 3 √ 60 x √ 45
= √(4 x3) x 3√(4 x 15) x √(9 x 5)
= 2 √ (3) x 3 x 2√15 x 3√5
= 36 √(3 x 15 x 5)
= 36 x 15 = 540.
Real Number Line
Venn Diagram: Real Number
Real Number System
Type of Numbers
Type of Numbers
Type of Numbers
Type of Numbers
Type of Numbers
Type of Numbers
 Positive and Negative Numbers

•Between what 2 integers do the

following live?
•1/3, -5, -1/2, 4.2, |3|, |-3|
Activity-01
 Label each Region

• Whole

• Rational

• Integers

• Real

• Natural

• Irrational
Real Numbers
 Rational and Irrational
Numbers

Rational Numbers Irrational Numbers

-2/3 , 4/9 , -27/6 √2 , √5 , √7
2 = 2/1 π
√4 = 2 =2/1
Activity-02
List all the numbers that match for each
letter
There will be more than one match for each letter.
¾ , 0 , 1, -2, , 0.33, 5, √5, 5/3, π ,5 ,-7, 4/7, 2/9, √9,√17
Real Number category Relevant Number
Whole
Rational
Integers
Real
Natural
Irrational
 Prime numbers are numbers that have only two
factors, that are, 1 and the number itself. It means
that a number greater than 1 with exactly two
factors, i.e. 1 and the number itself is defined as a
prime number.
Ex-1: Consider an example of number 5, which has
only two factors 1 and 5. This means it is a prime
number.
Prime Ex-2: The number 6, which has more than two
factors, i.e 1, 2, 3, and 6. This means 6 is not a
Numbers prime number.

Ex-3: The number 1, we know that it has only one

factor. So, it cannot be a prime number as a prime
number should have exactly two factors.
 Prime
Numbers
 Even & Odd
Numbers
A whole number that is able to be
divided by two into two equal whole
numbers is called even numbers.
Ex-1: 0, 2, 4, 6, and 8 are even
numbers.
Any integer that can be divided
exactly by 2 is an even number.
Even numbers are divisible by 2
without remainders. They end in 0, 2,
4, 6, or 8.
Odd numbers are not evenly divisible
by 2 and end in 1, 3, 5, 7, or 9.
Any integer that cannot be divided
exactly by 2 is an odd number
 Properties of Even Numbers

Property Operation
Property Name Operation Description Example
Property 1 Property of Even + Even = Even Adding even and even 14 + 6 = 20
Addition number will always result
in an even number

Property 2 Property of Even – Even = Even Subtracting even from 16 – 6 = 10

Subtraction even number will result in
an even number.

Property 3 Property of Even × Even = Even Multiplying even and even 6 × 4 = 24

Multiplication number will always result
in an even number.
 Adding and Subtracting
Example
Operation Result
(red is odd, blue is even)
Even + Even Even 2+4=6
Even + Odd Odd 6+3=9
Odd + Even Odd 5 + 12 = 17
Odd + Odd Even 3+5=8

Multiplying
Example
Operation Result (red is odd, blue is
even)
Even × Even Even 4 × 8 = 32
Even × Odd Even 4 × 7 = 28
Odd × Even Even 5 × 8 = 40
Odd × Odd Odd 5 × 7 = 35
Mathematical
Operations
Mathematical Operations
Properties of Equality
Properties of Equality
Properties of Equality
Properties of Real Numbers
Basic Mathematical Operations
Basic Mathematical Operations
Basic Mathematical Operations
Basic Mathematical Operations
Order of Mathematical Operation

❖The order of operations are the rules that tell

us the sequence in which we should solve an
expression with multiple operations.
❖The order is PEMDAS: Parentheses,
Exponents, Multiplication, and Division (from
left to right), Addition and Subtraction (from
left to right).
What is Order of Operations?
In math, order of operations is the rule that states the sequence in
which the multiple operations in an expression should be solved.
A way to remember the order of the operations is PEMDAS, wherein
each letter stands for a mathematical operation.
 What is Order of Operations?
The PEMDAS rules that state the order in which
the operations in an expression should be
solved are:
1. Parentheses – They take precedence over all P Parentheses
other operators. The first step is to solve all the
operations within the parentheses. Work out all E Exponent
groupings from inside to out. (Whatever is in
parentheses is a grouping) M Multiplication
2. Exponents – Work out all the exponential D Division
expressions.
3. Multiplication and Division – Next, moving A Addition
from left to right, multiply and/or divide
whichever comes first. S Subtraction
4. Addition and Subtraction – Lastly, moving
from left to right, add and/or
subtract whichever comes first.
Mathematical Order of Operations
Order of Operations BODMAS
B stands for Brackets ( ), { }, [ ]
O stands for Order
D stands for Division (÷)
M stands for Multiplication (×)
A stands for Addition (+)
S stands for Subtraction (-)
Mathematical
Order of
Operations
Mathematical Operations
Mathematical
Order of
Operations
Mathematical
Order of
Operations
Mathematical
Order of
Operations
Mathematical
Order of
Operations
Mathematical
Order of
Operations
Mathematical
Order of
Operations
Mathematical
Order of
Operations
Mathematical Order of Operations
 PEMDAS
Ex. Use the order of operations to simplify
the expression
3×42+8−(11+4)2÷33×42+8−(11+4)2÷3.
Parentheses: 3×42+8−(15)2÷33×42+8−(15)2
÷3
Exponents: 3×16+8−225÷33×16+8−225÷3
Multiplication/Division: 48+8−7548+8−75
Addition/Subtraction: −19
Mathematical
Order of
Operations
Mathematical Order of Operations
Mathematical
Order of
Operations
Mathematical Order of Operations
Order of Operations
 Mathematical Order of Operations
When we perform computational actions in mathematics, we must keep in mind that there is a
sequence that needs to be respected in order to do the calculation properly. Operations are
divided into three degrees, and we start the calculation by dealing with the third-degree
operations first. Because a single mathematical expression can be (but doesn’t have to be)
made of different degree operations, we need to keep in mind two things:
➢if an expression is made up of operations of the same degree, we resolve them from left to
right.
➢if an expression is made up of operations of different degrees, we resolve it by following the
degree order.
So, this is the order of operations, with regard to the order of solving:
1) Exponent and roots (third-degree operations)
2) Multiplication and division (second-degree operations)
3) Addition and subtraction (first-degree operations)
4) For example, let’s try solving this problem while respecting the order of operations, and
then we’ll try it the other way around to see the difference.
 Brackets
• Brackets are not operations themselves, but symbols that are of vital importance to the
order of operations. It’s because we can use brackets to override the proper order of
operations.
• Brackets are put around the parts of mathematical expressions we want to be solved
first. There are three different types of brackets: round brackets or parentheses ( ),
square brackets or hard brackets or just brackets [ ], and curly brackets or braces { }.
• There are other types of brackets, but only these are used in the context of the order of
operations. In mathematics, they always come in pairs – an opening bracket, which are {, [
or (, and the closing bracket, which are ), ], or }.
• Brackets can be put around other brackets, thus creating so-called nested
brackets. Because of the existence of nested brackets, and because there are three types
available, there is an order both for solving and nesting brackets.
• Brackets are nested this way:
• The round brackets or parentheses are the first degree brackets and they do not go
around any other brackets.
• The square brackets are used when we want to create an expression that includes an
expression that is already inside round brackets.
• The curly brackets are used when we want to create an expression that includes an
expression that is already inside square brackets.
Mathematical Order of Operations

1) 4+18⋅24–8⋅[(23−8)+3⋅(32+4)]–8⋅(23−4)
49+3⋅24–2⋅[(23−8)+3⋅(3+4)]–8⋅(2–4)49+3⋅24–2⋅[(23−8)+3⋅(3+4)]–8⋅(2–4)
=49+3⋅24–2⋅[15+3⋅7]–8⋅(−2)=49+3⋅24–2⋅[15+3⋅7]–8⋅(−2)
=49+3⋅24–2⋅[15+21]–8⋅(−2)=49+3⋅24–2⋅[15+21]–8⋅(−2)
=49+3⋅24–2⋅36–8⋅(−2)=49+3⋅24–2⋅36–8⋅(−2)
=49+3⋅24–72+16=49+3⋅24–72+16
=49+3⋅(−32)=49+3⋅(−32)
=49–96=49–96
=−47
PEMDAS
 PEMDAS
Example 1: Solve: 2 + 6 × (4 + 5) ÷ 3 – 5 using PEMDAS.

Solution:

Step 1 – Parentheses : 2+6 × (4 + 5) ÷ 3 – 5 = 2 + 6 × 9 ÷ 3 – 5

Step 2 – Multiplication: 2 + 6 × 9 ÷ 3 – 5 = 2 + 54 ÷ 3 – 5

Step 3 – Division: 2 + 54 ÷ 3 – 5 = 2 + 18 – 5

Step 4 – Addition: 2 + 18 – 5 = 20 – 5

Step 5 – Subtraction: 20 – 5 = 15
 PEMDAS
Example 2: Solve 4 – 5 ÷ (8 – 3) × 2 + 5 using
PEMDAS.
Solution:
Step 1 – Parentheses: 4 – 5 ÷ (8 – 3) × 2 + 5
=4–5÷5×2+5
Step 2 – Division: 4 – 5 ÷ 5 × 2 + 5
=4–1×2+5
Step 3 – Multiplication: 4 – 1 × 2 + 5 = 4 – 2 + 5
Step 4 – Subtraction: 4 – 2 + 5 = 2 + 5
Step 5 – Addition: 2 + 5 = 7
 PEMDAS
Example 3: Solve 100 ÷ (6 + 7 × 2) – 5 using
PEMDAS.
Solution:
Step 1 – Multiplication inside parentheses:
100 ÷ (6 + 7 × 2) – 5= 100 ÷ (6 + 14) – 5
Step 2 – Addition inside parentheses:
100 ÷ (6 + 14) – 5 = 100 ÷ 20 – 5
Step 3 – Division:
100 ÷ 20 – 5 = 5 – 5
Step 4 – Subtraction:
5–5=0
 Basic Math
Abbreviations
Measurement
 Order of
Operations
Order of Operations PEMDAS
❖ P stands for Parentheses ( ), { }, [ ]
❖ E stands for Exponents (a2) (For example,
here, a is a number with exponent 2)
❖ M stands for Multiplication (×)
❖ D stands for Division (÷)
❖ A stands for Addition (+)
❖ S stands for Subtraction (-)
Order of Operations BODMAS
B stands for Brackets ( ), { }, [ ]
O stands for Order
D stands for Division (÷)
M stands for Multiplication (×)
A stands for Addition (+)
S stands for Subtraction (-)
Are PEMDAS and BODMAS the same?

❖Yes. Both PEMDAS and BODMAS are acronyms for

remembering the order of operations. They are
different names for the same rule. What they call
PEMDAS in the US is called BODMAS in the UK,
Australia, India and various other countries.
 Exercise

1. Simplify 4+ (5 ×3² + 2) using PEMDAS.

2. Simplify 9 – 24 ÷ 8 × 2 + 3 using
PEMDAS.
3. Simplify [(32 ÷ 4) + 3] × 2 using PEMDAS.
4. Simplify ²(3×5²÷5) – (16−10) using
PEMDAS.
Laws of Indices(Exponents)
Index & Logarithm
Rules Apply to the Simplification of
Exponents
Index & Logarithm
Laws of Indices
Examples
Examples
Examples
Exercise
Q&A
Session

End