contemporary mathematics for business and consumers 5th edition BD

contemporary mathematics for business and consumers 5th edition BD contemporary mathematics for business and consumers 5th edition BD contemporary mathematics for business and consumers 5th edition BD contemporary mathematics for business and consumers 5th edition BD contemporary mathematics for business and consumers 5th edition BD contemporary mathematics for business and consumers 5th edition BD contemporary mathematics for business and consumers 5th edition BD

Contemporary Mathematics for Business and Consumers 5th Edition Robert Brechner Miami-Dade College Contemporary Mathematics for Business and Consumers, Fifth Edition Robert Brechner VP/Editorial Director: Jack Calhoun VP/Editor-in-Chief: Alex von Rosenberg Sr Acquisitions Editor: Charles McCormick, Jr Developmental Editor: Katie Yanos Sr Marketing Manager: Bryant Chrzan Sr Content Project Manager: Tamborah Moore Manager, Editorial Media: John Barans Managing Technology Project Manager: Matt McKinney Technology Project Manager: Robin Browning Marketing Communications Manager: Libby Shipp Sr Manufacturing Coordinator: Diane Gibbons Production House: LEAP Publishing Services, Inc Compositor: Newgen © 2009, 2006 South-Western, a part of Cengage Learning ALL RIGHTS RESERVED No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher For product information and technology assistance, contact us at Cengage Learning Academic Resource Center, 1-800-423-0563 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com ExamView® and ExamView Pro® are registered trademarks of FSCreations, Inc Windows is a registered trademark of the Microsoft Corporation used herein under license Macintosh and Power Macintosh are registered trademarks of Apple Computer, Inc used herein under license Art Director: Stacy Jenkins Shirley Cover and Internal Designer: Joe Devine, Red Hangar Design © 2009 Cengage Learning All Rights Reserved Cengage Learning WebTutor™ is a trademark of Cengage Learning Cover Image: Getty Images Photography Manager: Deanna Ettinger Photo Researcher: Rose Alcorn Library of Congress Control Number: 2008921202 Package ISBN 13: 978-0-324-56849-3 Package ISBN 10: 0-324-56849-5 Book only ISBN 13: 978-0-324-56816-5 Book only ISBN 10: 0-324-56816-9 ISE Package ISBN 13: 978-0-324-66001-2 ISE Package ISBN 10: 0-324-66001-4 ISE Book only ISBN 13: 978-0-324-65995-5 ISE Book only ISBN 10: 0-324-65995-4 South-Western Cengage Learning 5191 Natorp Boulevard Mason, OH 45040 USA Cengage Learning products are represented in Canada by Nelson Education, Ltd For your course and learning solutions, visit academic.cengage.com Purchase any of our products at your local college store or at our preferred online store www.ichapters.com Printed in the United States of America 12 11 10 09 08 Robert Brechner T H R E A L L IF E A M L A E R S S E R E A L B U S IN Dear Student: rporation the profit margin of a co m Fro ers mb nu d un revolves aro u understand and Today’s world of business scapable The better yo ine it’s — ich dw san d t-foo the better to the mark-up on a fas functions and principles, th ma sic ba d an ers ng with numb feel comfortable worki ess world your success in the busin ize xim ma to be l u’l yo prepared tics for Business ntemporary Mathema Co d ate cre I nd ur in yo inviting, That’s why this book is math foundation in an lid so a th wi u yo e lik vide students y are important to and Consumers to pro iples, you’ll see why the nc pri the rn lea ly on t th l no career This is not a ma manageable way You’l and, ultimately, in your es urs co ess tool a sin as bu th er uses ma your success in oth ly a business book that tru It’s s ple am ex ess sin book that uses a few bu success to y rne to further your jou r There are and a good grade—easie s— ces suc s thi ke ma to re are ways s difference for you As with any journey, the t can make a tremendou tha ls too ng rni lea ble ua several important and val having your own tutorial that’s almost like nt de stu c mi na dy a is tware your book MathCue.Business sof cost with new books If al ion dit ad no at d ge it is packa want to order it right personal tutor Best of all, thCue.Business, you will Ma th wi CD rce sou Re nt engage.com does not include a Stude 4-9706 or visit academic.c -35 00 1-8 l cal py, co a away To purchase derstand the available to help you un s rce ou res d an ls too strate the nt of time Math The following pages illu ble—in the least amou ssi po de gra st be the t ge it With math principles—and to been since you studied it’s g lon w ho r tte ma idating, no d much better doesn’t have to be intim dent in mathematics an nfi co re mo e urs co s thi ve a little effort, you’ll lea your business career in ed equipped to succe urage you to contact me to your success, I enco t en itm mm co l na rso H or by email at As part of my pe number 1-888-284-MAT ee l-fr tol my ing us ts en with questions or comm bizmath@aol.com st wishes, Warmest regards and be Robert Brechner iv Contemporary Mathematics, 5e Real Business Real Math Real Life Life A d yn a m ic in tr o d u ct io n in to th e re a l w o rl d o f b u si n es s m a th em a ti cs ! With a unique step-by-step approach and real-life businessbased examples throughout, Contemporary Mathematics for Business and Consumers, 5e is designed to help you overcome math anxiety and confidently master key concepts and their practical applications This book provides a solid mathematical foundation to help you succeed in later business courses and your future career! GET THE GRADE WITH M ATH C UE B USINESS Created specifically to accompany this text, MathCue.Business software is a unique self-study tutorial that you can use at home or in the computer lab Consider it your personal, electronic tutor Step-by-step solutions provide the detail you need, and you’ll find it easy to pinpoint and review the specific topics that are the most challenging Take a look for yourself at what MathCue Business can for you MathCue.Business is available with new copies of the text If the Student Resource CD is not with your book, you can order it separately Call 1-800-354-9706 or visit academic.cengage.com v S ELF -S TUDY S TUDENT T UTORIAL Use MathCue.Business as a self-study tool and resource for drill and practice, informal tutoring, or complete, customized testing • In Tutorial Practice Mode, the software presents problems, evaluates answers, and gives immediate feedback In Test Mode, problem answers and results are given only when you finish the entire session • Each problem is accompanied by a step-by-step solution You can even get help starting a problem • If you have difficulty finishing a session in one sitting, you can back up your work and resume it later • Solution Finder – This unique feature allows you to enter your own basic math problems and receive step-by-step help Like a personal tutor, the software guides you through solving the problem with a complete step-by-step explanation • Links from within MathCue.Business provide direct access to the BizMath Videos vi Step into the Real Business World with the Strengths of Contemporary Mathematics, 5e IN B USINESS W ORLD — Useful and interesting connections to the real business world in in Many have useful information to help you manage M your own personal finance situations y In the Business World with THE The current FICA deductions and wage base are listed in the IRS publication Circular E, Employer’s Tax Guide This and other tax forms and publications can be obtained by calling the IRS at 1-800-TAX FORM or from their Web site, www.irs.gov change from whole numbers to decimal numbers mixed decimals Decimals written in conjunction with whole numbers For example, 2.44 is a mixed decimal dicare Learning Tip The place value ch Chapter to include the starting at the decimal p names of the places on t ten-thousandths, hundre To read or write dec it were a whole number, 0594 would be read as “ When reading numbers, remember th thatt decimals b d i l start t t with ith the th “tenths” place, whereas whole numbers start with the “ones” place Don’t forget that the word “and” is used to represent the decimal point L EARNING T IPS — Helpful mathematical hints, shortcuts, and reminders to enhance your understanding of the chapter material TRY IT EXERCISE SOLUTIONS FOR CHAPTER Numerical Form 1a 49,588 1b 804 1c 1,928,837 1d 900,015 Word Form Forty-nine thousand, five hundred eighty-eight Eight hundred four One million, nine hundred twenty-eight thousand, eight hundred thirt Nine hundred thousand, fifteen 1e 6,847,365,911 Six billion, eight hundred forty-seven million, three hundred sixty-fiv 1f 2,000,300,007 2a 51,700 3a Two billion, three hundred thousand, seven 2b 23,440 39,481 5,594 11,029 56,104 Verify: 11,029 5,594 39,481 56,104 2c 175,450,000 3b 6,948 330 7,946 89 5,583,991 18,606 5,617,917 2d 60,000 Verify: 18,606 5,583,991 89 7,946 330 6,948 5,617,917 2e 15,000,000 3c 183 228 281 545 438 1,157 2,832 m T RY I T E XERCISES with W ORKED - OUT S OLUTIONS provide you with immediate feedback as you evaluate your comprehension of each new topic F ORMULA R ECAP C HARTS — Lists of all-important formulas provide you with a quick reference for homework or test preparation A NSWERS TO O DD N UMBERED E XERCISES — Answers to all of the odd-numbered Section Review Exercises and Assessment Test questions (except Business Decisions) allow you to easily check your progress on class assignments or homework vii All the Math That’s Fit to Learn WWW C ONTEMPORARY M ATH COM Managing Your Personal Finances Quote UnQuote Here are some personal financial planning tips from The College Board, an organization that provides students, parents, and educators with education-oriented information and services; www.collegeboard.com • Why is there always so much month left at the end of the money? S h Ll d –Sarah Lloyd • A goal is a dream with a deadline Budget Credit • Pay bills on time • Check your credit rating annually • Don’t allow your total debt to exceed 20% of your annual income • Reserve consumer credit for major purchases • Pay off credit card balances at the end of each month –Unknown The Value of Education $100,000 $90,000 Median Annual Earnings • Develop a realistic budget—Live with it! • Review your expenses and personal balance sheet (page 15) periodically • Review your checking and savings account features every two to three years • Save to 10 percent of your income each month • Set short-, medium-, and long-term financial goals Monitor them $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 25 to 34 35 to 44 45 to 54 55 to 64 — Appearing every three chapters, a page of current news items, cartoons, famous business and inspirational quotes, career information, and many other interesting facts and figures related to business topics Age Taxes • Consult with experts well before April each year • Keep good records and a file system of tax-related items • If eligible, open an IRA/Keogh Fund it annually Grades 9–11 High school graduate Some college, no degree Associate degree Bachelor’s degree Master’s degree Doctoral degree Professional degree Additional Tools to Help You Succeed S TUDENT R ESOURCE CD This important resource includes MathCue Business self-study tutorial software, Excel templates, and Chapter 22, an extra chapter covering two important business topics—U.S and metric measurements and currency conversion This CD accompanies each new text or is available for purchase separately If the Student Resource CD is not with your book, call 1-800-354-9706 or visit academic.cengage.com B IZ M ATH TUTORIAL V IDEOS Available in the MathCue.Business software, these Flash videos focus on core topics of business math They utilize the three methods of learning: Define, Demonstrate, and Do Each segment focuses on a core topic to help you master the most critical skills necessary for success in the business math course ISBN-10: 0-324-65985-7 / ISBN-13: 978-0-324-65985-6 C ONTEMPORARY M ATHEMATICS , E W EB S ITE ACADEMIC CENGAGE COM / BMATH / BRECHNER This dedicated Web site provides comprehensive tutorial tools and business links for students You will find Performance Objectives from the book, interactive quizzes, flashcards, and other dynamic learning links that make business math come alive viii D edic at ion To my wife, Shari Joy I’ll love you forever and a day! A b out t he Aut hors Robert Brechner Robert Brechner is Professor, School of Business, at Miami-Dade College, the largest multicampus community college in the country For the past 42 years, he has taught Business Math, Principles of Business, Marketing, Advertising, Public Relations, Management and Personal Finance He has been Adjunct Professor at Florida Atlantic University, Boca Raton, International Fine Arts College, Miami and Florida International University School of Journalism and Mass Communications Bob holds a Bachelor of Science degree in Industrial Management from the Georgia Institute of Technology in Atlanta, Georgia He also has a Masters of Business Administration from Emory University in Atlanta He consults widely with industrial companies and has published numerous books covering a variety of business topics Bob lives in Coconut Grove, Florida with his wife, Shari Joy His passions include travel, photography, sailing, tennis, and running Bob encourages feedback and suggestions for future editions from those who use the text Students, as well as instructors, can contact him toll-free at 1-888-284-MATH or e-mail him at bizmath@aol.com George Bergeman, author of MathCue.Business The author of numerous software packages, George Bergeman has taught mathematics for more than 25 years His teaching career began at a small college in West Africa as a Peace Corps volunteer and continued at Northern Virginia Community College, one of the largest multi-campus colleges in the country Teaching awards include Faculty Member of the Year honors at his campus In an effort to enhance his instruction by incorporating computer support, George developed a small program for use in statistics classes Students and instructors responded positively, and in 1985 an expanded version was published along with an accompanying workbook Since then, George has developed a variety of software packages to accompany texts in statistics, calculus, developmental math, finite math, and a special favorite— Robert Brechner’s Contemporary Mathematics for Business and Consumers By drawing upon his teaching experiences and contact with students and faculty, he has endeavored to develop software that provides targeted, effective, and easy-to-use support for instruction George lives with his wife, Clarissa, near Washington, D.C., and they have one daughter, Jessica, who recently returned to the east coast after four years in San Francisco and a period of volunteer work in Brazil In his free time, he enjoys accompanying his wife and their dog, Anny, to dog shows, and he flies an ultralight airplane Brief Contents Chapter Chapter 13 Whole Numbers Consumer and Business Credit 440 Chapter Chapter 14 Fractions 33 Mortgages 489 Chapter Chapter 15 Decimals 67 Financial Statements and Ratios 523 Chapter Chapter 16 Checking Accounts 96 Inventory 579 Chapter Chapter 17 Using Equations to Solve Business Problems 132 Depreciation 623 Chapter Chapter 18 Percents and Their Applications in Business 166 Taxes 647 Chapter Chapter 19 Invoices, Trade Discounts, and Cash Discounts 204 Insurance 693 Chapter Chapter 20 Markup and Markdown 249 Investments 732 Chapter Chapter 21 Payroll 284 Business Statistics and Data Presentation 776 Chapter 10 Appendix A Simple Interest and Promissory Notes 328 Answers to Odd-Numbered Exercises A-1 Chapter 11 Index I-1 Compound Interest and Present Value 371 Chapter 12 Annuities 401 ix Appendix A / Answers to Odd-Numbered Exercises A-22 18 S E C T ION I I I Review Exercises $32,180, $5,150, $3,300, $23,730 $43,910, $10,300, $6,600, $27,010 $6,780, $5,150, $3,300, $50,980 $4,080, $7,550, $21,230, $9,900, $53,390 $31,407 11 $14,064 13 $10,596 15 $68,305.77 17 $103,705.50 19 refund, $651 21 refund, $1,438 23 $18,494.70, $70,460.30 25 $334,250,000, $620,750,000 18 CHAPTER ASSESSMENT TEST $1.17, $19.05 $6.62, $141.62 $1,184.63, $755, $19,489.63 7a $25.42 7b $471.30 9a $3.83, $2,221.40 9b $7.50, $4,350 9c $55,871.40 11 $52,101, $662.72 13 $82,615, $2,394.18 15 1.64%, $1.64, $16.40, 16.4 17a .07% 17b $.07 17c $.70 17d .7 19 $66,003, $10,300 , $9,900, $43,623 21 $44,351.96 23 $2,984 25 $61,273.25 27 owe, $228 29a $35,150 29b $23,400 29c $1,371 29d refund, $2,529 19 C H A P T ER INSURANCE 19 SEC T ION I 19 S E C T ION I I 19 S E C T ION I I I Review Exercises Review Exercises $79.50, $41.34, $20.67, $7.16 $842, $437.84, $218.92, $75.78 $270, $140.40, $70.20, $24.30 $1,125.25, $585.13, $292.57, $101.27 $4,900, $9,300, 17 years, 54 days 11 $5,495, $10,990, 21 years, 218 days 13a $5,240.40 13b $2,725.01 15 $14,325 cash value; $37,200 reduced paid-up ins.; 30 years, 206 days extended term Review Exercises $668.80, $174.30, $843.10 $451.50, $69.60, $521.10 $2,132.10, $438.90, $2,571 $89.60, $470.40 $134.17, $187.83 11 $75,000 13 $37,000 15 $150,000 17 $202.50 19 Aetna: $57,000, State Farm: $23,750, Liberty Mutual: $14,250 $343 $1,125 $625.60 $1,146.60 $1,412 11a Hart: $13,500, Black: $11,700, Garner: $4,140, Williams: $50,000, Morgan: $3,590, Bus: $12,230, Camper: $3,530, total: $98,690 11b Williams: $7,800, deductible: $250, total: $8,050 Appendix A / Answers to Odd-Numbered Exercises A-23 ASSESSMENT TEST CHAPTER $2,521.60, $1,311.23, $655.62, $226.94 $148.20, $77.06, $38.53, $13.34 $20,410 cash value, $40,820 reduced paid-up ins.; 21 years, 218 days extended term 7a $1,088 7b $97.92 7c $87.04 $512.000 11 $475, $672, $1,147 13 $173.33, $86.67 15 $6,057.69 17 $12,392 19 $153,000 21 $361.80 23 $564.40 25a Goya: $45,000, Truman: $50,000, Copeland: $5,000, Kelly: 0, Blake’s car: $3,650, total: $103,650 25b Truman: $18,000, Copeland: $11,000, Kelly: $11,000, deductible: $250, total: $40,250 INVESTMENTS Review Exercises C H A P T ER 20 SEC T ION I 20 S E C T ION I I 20 none, $.60 $5.00, 0, HPQ, $52.03, 21 $53.90, 3%, 0.6% 11 3.5%, 13 $1.31, 1.6% 15 $1.41, $.30 17 $6,585.15, $9,997.57, $3,412.42 19 $29,723.41, $26,310.56, ($3,412.85) 21 $.85 23a $27,000,000 23b $1.74 25a $29,658.56 25b $36,078.38 25c $6,419.82 Review Exercises 9.98%, $94.95 BAC.XQ, up $0.345 Citicorp 8.25%, 9.188% Baal/A-/A-, 5.26%, 11 $9.17, $876.67 13 $34.90, $7,959.20 15 $16.56, $11,433.10 17 $28.33, $4,429.32 19 $8.13, $6,262.41 21 $66.25, 7.3% 23 $75, 6% 25 $53.75, 6.4% Review Exercises 19 S E C T ION I I I 20 OAKVX, $26.43 Oak Associates Funds, BlkOakEmrg, $2.87 Delaware Invest B, CorPlsBd t, 2% Int Ret p, 29% $.53, 4.1% 11 $1.28, 5% 13 $15.54, 621.118 15 $10.68, 4,484.305 17 $1,530, $1,880, $395, 25.8% 19 $4,850, $6,120, $2,520, 52% 21a $.75 21b 6.1% 23 689.655 ASSESSMENT TEST none, $.36 $15, $.09 3M Company, 2,101,200 shares Honeywell Int’l Inc $33.9% $2.09, 3.3% 11 $8.98, $1.71 13 $15,665.20, $12,142.70, ($3,522.50) 15 $39,277.88, $44,975.31, $5,697.43 17a $13,000,000 17b $.71 19a $4,472.28 19b $3,346.85 19c ($1,125.43) 21 A3/A-/A, 5.2% 23 Merrill Lynch, down $3.385 25 Baal/A-/A-, up $0.029, 5.26% 27 $20.49, $4,074.95 29 $2.05, $9,410.50 31 $21.84, $4,969.20 33 $95, 9% 35 Harper Funds, Intl Ret p $75.62 37 $11.62, down $0.01 39 $.52, 5% 41 $7.05, 6,410.256 43 $1,340, $1,180, ($85), (6.3%) 45 $9,400, $12,820, $4,380, 46.6% 47 $9.04 49 33.6% 20 CHAPTER Appendix A / Answers to Odd-Numbered Exercises A-24 21 21 C H A P T ER BUSINESS STATISTICS AND DATA PRESENTATION SEC T ION I Review Exercises y 100,000 1,200,000 90,000 1,150,000 80,000 70,000 1,100,000 Sales ($) Sales ($) y 1,050,000 60,000 50,000 1,000,000 40,000 950,000 30,000 900,000 20,000 10,000 Jan Feb Mar Apr May June Jan x Feb Mar Apr May Month Month y Deluxe 140,000 Standard 120,000 Sales ($) 100,000 80,000 60,000 40,000 20,000 Jan Feb Mar Apr May June x Month 21 S E C T ION I I Review Exercises 5.8 $2.88 13c 425 13d 221 21 and 11 $3.66 13a 339.9 13b 343 June x Appendix A / Answers to Odd-Numbered Exercises 21 1a A-25 S E C T ION I I I Review Exercises Class Tally 0–99 100–199 200–299 300–399 400–499 500–599 600–699 |||| |||| |||| | |||| |||| ||| || | Frequency 1b Class Tally Frequency ( f ) Midpoint (m) f؋m 0–99 100–199 200–299 300–399 400–499 500–599 600–699 |||| |||| |||| | |||| |||| ||| || | 30 49.5 149.5 249.5 349.5 449.5 549.5 649.5 198.0 747.5 1,497.0 3,145.5 1,348.5 1,099.0 649.5 8,685.0 Mean ϭ 1c 8,685 ϭ 289.5 30 y Frequency 69 x 60 0– 59 0– 50 0– 39 40 0– 30 49 9 29 0– 19 20 0– 10 0– 99 Mileage ASSESSMENT TEST 1a CHAPTER 1b Sales ($000) Sales ($000) y 260 250 240 230 220 210 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 Apr y New York California May June July Month Aug Sep 260 250 240 230 220 210 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 Apr May June July Aug Month x New York California 21 Sep x Appendix A / Answers to Odd-Numbered Exercises A-26 3a desktop computers: 50%, notebook computers: 25%, software: 10%, printers: 12.5%, accessories: 2.5% 3b 5a range: 78, mode: 72 10% Software 25% Notebook computers 5b 12.5% Printers % Accessories 2.5 50% Desktop computers 5c Class 11–20 21–30 31–40 41–50 51–60 61–70 71–80 81–90 91–100 Mean ϭ Class Tally Frequency 11–20 21–30 31–40 41–50 51–60 61–70 71–80 81–90 91–100 | | | 1 10 10 || |||| |||| |||| |||| |||| |||| |||| | Tally Frequency ( f ) Midpoint (m) f؋m | | | 1 10 10 40 15.5 25.5 35.5 45.5 55.5 65.5 75.5 85.5 95.5 15.5 25.5 35.5 91.0 222.0 327.5 755.0 855.0 573.0 2,900.0 || |||| |||| |||| |||| |||| |||| |||| 2,900 ϭ 72.5 40 5d 14 5e y 10 Frequency 11–20 21–30 31–40 41–50 51–60 61–70 71–80 81–90 91–100 Scores in Groups x Index A A G Edwards, 774 Aamco Transmission, 612 Abbreviations for invoices, 206 Accelerated cost recovery system (ACRS), 628 Accelerated deprecation, 618 Accounting equation, 525 Accounting Trends and Techniques, 630 Accrued interest, 750 Ace Hardware, 163 Acid test ratio, 549 Actuaries, 694 Ad valorem tax, 655 Addends, Addition, of decimals, 73–74 of fractions, 41–51, 59–60 of mixed numbers, 44–45 of whole numbers, 7–9, 25 verification of, Add-on interest, 457 calculating the amount of the regular monthly payments of an installment loan by, 457–459 Adidas-Salomon, 575 Adjustable-rate mortgages (ARM), 490–501, 512–513 calculating the interest rate of, 500–501 defined, 491 Adjusted bank balance, 113 Adjusted checkbook balance, 113 Adjustment period, 500 Advance Auto Parts, 247 Advertising and display, 218 AFLAC, 695 Ahold USA, 192 Aircraft manufacturers, 425 Airports, 51 Albertson’s, 192 Alternative minimum tax (AMT), 692 American Express Card, 311 American Institute of Certified Public Accountants (AICPA), 620 American Stock Exchange (AMEX), 827 Amortization, 419–424, 430–431 defined, 419 Amortization payment calculating the amount of by table, 421–422 calculating by formula, 423–424 Amortization schedule, 494 of a mortgage, preparing a partial, 494–495 Amount, 7–8 determining in increase or decrease situations, 186–190 finding the new after a percent change, 186–188 finding the original before a percent change, 188–190 Amount financed, 456 Annual life insurance premiums, 697, 706 Annual percentage rate (APR), 441 calculating by formula, 463–464 of an installment loan, 459–464 tables, 460–462, 464–465 Annual percentage yield (APY), 380 calculating, 379–380 defined, 379 Annual premiums for motor vehicle insurance bodily injury and property damage rates, 716 collision and comprehensive rates, 716 Annual rate, 379 Annual stockholder’s meeting, 29, 525 Annuities certain, 402 Annuity, 401–431 complex, 402 contingent, 402 defined, 402 future value of, 402–409, 428–429 of $1.00 (Table), future value of an ordinary, 404–405 ordinary, 403 present value of, 411–417, 429–430 simple, 402 time line illustrating present and future value of, 402 Annuity due, 402–409 calculating the future value of by formula, 408–409 calculating the future value of by using tables, 406–407 calculating the present value of by formula, 416–417 calculating the present value of by using tables, 412–415 defined, 403 formula, 408 Apple, Inc., 574 APR See Annual percentage rate (APR) APY See Annual percentage yield (APY) Area rating, 706 Arithmetic mean, 797 calculating of ungrouped data, 797–798 ARM See Adjustable-rate mortgage (ARM) Assessed value, 655 Asset cost recovery systems, 628–634, 638–639 Asset turnover ratio, 550 Asset’s basis for depreciation, determining, 629–630 Assets, 524, 526 current, 526 intangible, 635 investments and other, 526 long-lived, 616 long-term, 616 on personal balance sheet, 14–15 tangible, 635 wasting, 633 Association of Insurance Commissioners, 715 Audi, 825 Automated teller machines (ATMs), 97, 121 Automatic bill paying, 97 Automobile insurance, average annual expenditures (1997– 2007), 718 AutoZone, 247 Average, 81, 797 Average collection period, 550 Average cost, 581 Average cost method, 585 pricing inventory by, 585–586 Average daily balance, 445 calculating finance charge and new balance by using, 445–447 Average inventory, 597 Average monthly balance, 97 B Back-end load, 757 Balance calculating new by using the average daily balance method, 445–447 calculating new by unpaid or previous month’s balance method, 443–445 Balance of business, calculating the new, 448–451 Balance sheet, 524–534, 560–561, 621 common-size, 529 components of, 526–529 defined, 524 horizontal analysis of, 531–534 personal, 14–15 preparing, 525–529 vertical analysis of, 529–530 Bank discount, 203, 350 and proceeds for simple discount notes, calculating, 350 Bank of America, 203, 338 Bank statement, 113 paper and electronic, 114 understanding of, 113 Bank statement reconciliation, 113–118, 123 defined, 113 form, 115 preparation of, 113–118 Bank teller, 112 Banker’s rule, 331 Banking institutions, 329 BankOne, 338 Banks, 338 Bar chart, 784 comparative, 784, 785 component, 784 reading and constructing, 784–790 standard, 784, 785 Base, 190 defined, 172 solving for, 177–179 Basis for depreciation, 629 determining the asset’s, 629–630 Baskin-Robbins, 802 Bayliner, 357 Beginning inventory, 538 Beneficiary, 695 Berkshire Hathaway, 164 I-1 Index I-2 Best Buy Co., Inc., 255, 519 Bicycle industry, U.S., 472 Billing cycle, 443 Bills of sale, 205 Biweekly pay periods, prorating annual salary on the basis of, 285–286 Blank endorsement, 103, 104 defined, 102 BMW, 825 Boat builders, 357 Bond(s), 746–752 calculating the cost of purchasing, 750–751 calculating the current yield for, 751–752 calculating the proceeds from the sale of, 750–751 callable, 746 convertible, 746 corporate, 391 defined, 746 junk, 749 municipal, 754 secured, 746 taxable or tax-free, 754 understanding, 746–749 unsecured, 746 Bond certificate, 747 Bond quotation table, reading of, 746–749 Bond rating, 749 Book inventory, 580 Book value, 526 defined, 616 Bottom line, 537, 540 Bounced check, 105 Brokers discount, 741–742 full-service, 741 Buck, Peter, 485 Budgetary demands in a community, calculating tax rate necessary to meet, 658–660 Buffett, Warren, 164 Business, calculating the new balance of, 448–451 Business credit, 440–478 Business interruption insurance, 714 Business presentations, 784 Business problems solving other involving percents, 183–190, 195–196 using equations to solve, 132–158 using the percentage formula to solve, 172–179, 195 Business statistics, 776–815 defined, 777 Business Week, 524, 777 Business-related word problems, using equations to solve, 144–151, 157–158 Buying, volume, 218 C Cadillac, 825 Cafeteria-style benefit program, 310 Calculated interest rate, 500 Calculators, business, 170, 184 financial, 340 fraction key, 36 % key, 170, 174 scientific, 170, 184, 340 Calendar, days-in-a-year, 231 Callable bonds, 746 Canceled policies, refunds due on, 707–709 Cancellation, 51 Capital, 527 working, 549 Capital gains, 763 Capital improvements programs, 747 Capital stock, 527 Capitalized cost, 487 reduction, 487 CardTrak.com, 153 Carpet and Rug Institute, 246 Carpet industry, U.S., 246 Carrier, 694 Carvel, 802 Cash discount period, 226 Cash discounts, 225–234, 240–241 calculating, 226–228 defined, 226 importance of, 226 Cash price, 456 Cash surrender option, 699 Cash value, 699 CCH Inc., 671 Census of Business, 777 Census of the United States, 777 Cessna Aircraft Company, 425, 473 Chain trade discount, 218 Channel of distribution, position or level in, 218 Charge accounts, 441–451, 476–477 CharlesSchwab, 774 Charts, 554 bar, 784–790 line, 779–784 pie, 790–793 Check, 99 defined, 98 endorsement of, 102–104 outstanding, 113 with stub, 106 writing in proper form, 100–102 Check register, 100, 106 defined, 98 using to record account transactions, 106–108 Check stub, 98 using to record account transactions, 106–108 with check, 100, 106 Checking accounts, 96–123 opening, 98–100 understanding and using, 97, 121–122 Chefs and cooks, 65 Circuit City Stores, Inc., 519 Circular E: Employer’s Tax Guide, 296, 297 Citibank credit card rate disclosure indexed to U.S prime rate, 450 Citicorp, 203, 338 Closed-end credit, 455–468, 477–478 Closing, 491 calculating the amount due at, 496–500 Closing costs, 497 understanding, 496–500 Closing statement, 497 Cobalt, 357 Coca-Cola Company, 82, 737 Coefficient, 134 Coinsurance clause, 709 Coinsurance, understanding, 709–710 Cole Haan, 575 Collision, 714 Combined wage bracket tables, 301 determining employee’s withholding using, 301–304 Commission, 289 draw against, 291–292 salary plus, 291 straight and incremental, 289–290 Common denominator, 41 Common divisors, 37 Common factors, 37 Common fraction, 34 Common multiple, 39 Common stock, 734 distributing dividends on, 733–737 Common-size balance sheet, 529 Common-size income statement, 541 Comparative bar chart, 785 defined, 784 Compensation due computing in the event of a loss, 709–710 computing following an accident, 718–719 Competition, 218 Complex annuity, 402 Complex fraction, 35 Component bar chart, 784 Compound amount, 373 calculating using the compound interest formula, 380–381 computing using compound interests tables, 375–378 manually calculating, 374–375 Compound interest, 371–395 computing using compound interests tables, 375–378 defined, 329, 372 earned on $100 at 12%, 379 formula, calculating compound amount by using, 380–381 future value of $1 at, 376 manually calculating, 374–375 present value and future value at, 373 present value of $1 at, 387 table, 376 table factors, creating for periods beyond the table, 378–379 time value of money, 393–394 Compounding continuous, 384–385 daily, 384–385 Compounding periods per year, 377 Comprehensive, 715 defined, 714 Condominium insurance, 708 Conservative investments, 733 Constant dollar plan, 745 Constants, 133 Construction workers, 37 Consumer credit, 440–478 Consumer Credit Protection Act, 441 Consumer Price Index (CPI), 439 Contingent annuities, 402 Continuous compounding, 384–385 Conventional loans, 490 Convertible bonds, 746 Corporate aircraft, 425 Corporate bond quotation table, 749 Corporate bonds, 391 Corporate income tax, calculating after taxes, 675–677 Corporate Tax Rate Schedule, 675, 676 Corporation ownership, 29 Cost calculating inventory rate at, 599–600 calculating percent markup based on, 252–253 calculating when selling price and percent markup based on cost are known, 254–255 calculating when selling price and percent markup based on selling price are known, 259–260 closing, 497 computing on a stock transaction, 741–743 markup based on, 250–255, 275 using the retailing equation to find, 250–252 Cost of goods sold, 538, 601 defined, 250 Cost ratio, 591 Cost recovery allowance, 628 Cost recovery percentage, 629 table MACRS, 630 Cost to retail price ratio, 591 Costco Wholesale, 192, 327, 453 Cotter & Company, 590 Coupon rate, 748 Coverage ratio, 709 Credit business, 440–478 calculating personal line of, 448–451 calculating the potential amount of available to a borrower, 506–508 closed-end, 455–468, 477–478 consumer, 440–478 given for partial payment, calculating net amount due with, 228–229 line of, 441–451, 476–477, 506–509, 514 Index online application for, 442 open-end, 441–451, 476–477 revolving, 443 Credit card rate disclosure indexed to U.S prime rate, Citibank, 450 Credit cards, 153, 441–451, 476–477 Credit limit, 506 Credit period, 226 Credit score, 578 Credit unions, 337 Creditor, 524 Credits (bank statement), 113 Cumulative preferred stock, 734–735 Current assets, 526 Current liabilities, 526 Current ratio, 549 Current yield, 739 calculating for a bond, 751–752 calculating for a stock, 739–740 CVS Pharmacy, 224, 327 D Daily compounding, 384–385 Dairy Queen, 164, 802 Data grouped, 804–807 interpretation and presentation, 777–793, 811–813 presentation, 776–815 trend analysis chart and graph of financial, 553–555 ungrouped, 797–801, 804 Date discount, 226, 230–234 due, 226, 333 invoice, 226 loan, 333 maturity, 333 net, 226, 230–234 Dating EOM, 232–233 extra, Ex, or X, 234 methods, terms of sale, 232–234 ordinary, 232 proximo, 232–233 ROG, 233–234 Days of a loan, calculating the number of, 333–334 Days-in-a-year calendar, 231 De Vere, 471 Debentures, 746 Debit card, 97 Debits, 113 Debt-to-assets ratio, 551 Decimal number system, 2–7, 25 defined, Decimal numbers, 68 and fundamental processes, 73–77, 88 place value chart, 69 reading and writing, 68–70 rounding to a specified place value, 71 understanding of, 68–73, 87 Decimal point, 2, 68 Decimals, 67–88 addition and subtraction of, 73–74 I-3 converting fractions to, 84–85 converting to fractions, 83–85 converting to percents, 167–169 defined, 68 division of, 75–77 repeating, 84 multiplication of, 74–75 Declining-balance, 621 calculating depreciation by, 621–622 Decrease determining amounts in, 186–190 determining the rate of, 183–186 Decreasing term, 696 Deductible, 714–715 Deductions, 296 mandatory, 296 voluntary, 296 Deed, 496 Del Monte, 171 Dell, Michael, 327 DeLuca, Fred, 485 Denominator(s), 34 adding fractions with different, 43–44 adding fractions with same, 43 common, 41 determining the least common, 42 subtracting fractions with different, 46 Department of Energy (DOE), 56 Department of Housing and Urban Development (HUD), 490 Depletion, 633 Deposit slip, 99 defined, 98 preparing, 104–105 Depositor, 98 Deposits, 98 Deposits in transit, 113 Depreciation, 526, 615–639 basis for, 629 declining-balance method, 621–622 defined, 616 modified accelerated cost recovery system (MACRS), 628–632 straight-line method, 617–618 sum-of-the-years’ digits method, 618–620 traditional methods used for financial statement reporting, 616–624, 637–638 units-of-production method, 623–624 Depreciation expense, 616 Depreciation pie, 620 Depreciation schedule, 617 Depreciation system, MACRS property classes, 629 Descriptive statistics, 777 Diamonds (DIAs), 827 Difference, 9–10 Differential piecework plan, 287 Discount, 748 bank, 350 cash, 225–234, 240–241 chain trade, 218 series trade, 218–222, 240 single equivalent discount, 221 single trade, 212–215, 239 timing of, 357–358 Discount broker, 741–742 Discount date, 226 determining by using various dating methods, 230–234 Discount period, 352 Discounted note, time line for, 352 Discounting a note, 352 before maturity, 352–353 Discounting, understanding, 349–354, 361–362 Discover Card, 311 Disney Enterprises, Inc., 172 Display, advertising and, 218 Distribution frequency, 804–807 position or level in the channel of, 218 Diversified portfolio, 733 Dividends, 18, 734 distributing on preferred and common stock, 733–737 Dividends in arrears, 734–735 Divisibility, rules of, 37 Division, 18 of decimals, 75–77 of mixed numbers, 53–54 of fractions, 51–54, 60–61 of whole numbers, 15, 18–21, 26 shortcut, 19, 77 verification of, 19 Division line, 34 Division sign, 19 Divisor, 18 common, 37 greatest common, 37 Dodge, 436 Dollar-cost averaging, 745 Double-declining balance, 621 Down payment, 455 Draft, 98 Draw against commission, 291–292 defined, 291 Drawing account, 291 Due date, 226, 333 Dun and Bradstreet, 548 E Earnings Form 7004-SM, Request for Earnings and Benefit Estimate Statement, 301 gross, 285 net, 285 retained, 527 Eckerd, 224 Economic Recovery Act of 1981, 628 Edward Jones, 774 Effective interest rate, 351 calculating, 379–380 Effective rate, 379 Efficiency ratios, 548, 550–551 defined, 550 Einstein, Albert, 439 Electronic funds transfer (EFTs), 97 Electronics Boutique, 152 Employee federal income tax withholding (FIT), calculating by the percentage method, 298–301 gross earnings and incentive pay plans, 285–292, 316–317 paycheck, computing FICA taxes withheld from, 296–298 payroll deductions, 296–304, 317 total withholding for federal income tax, social security, and Medicare, determining using the combined wage bracket tables, 301–304 Withholding Allowance Certificate, W-4, 298 Employer FICA tax for, 307–308 fringe benefit expenses, calculating, 310–311 payroll expenses, 307–312, 318 Ending inventory, 538 estimating the value of by gross profit method, 593–595 estimating the value of by the retail method, 591–593 Endorsement, 102 blank, 102, 103, 104 full, 102, 103, 104 restrictive, 102, 103, 104 space, 103 Endowment insurance, 696 Environmental Protection Agency, 148 EOM dating, 232–233 defined, 232 Equations, 133 key words and phrases for creating, 141 setting up and solving businessrelated word problems by using, 144–149 solving basic, 133–142, 156–157 solving for the unknown and proving the solution, 134–141 understanding the concept, terminology, and rules of, 133–134 using to solve business problems, 132–158 using to solve business-related word problems, 144–151, 157–158 writing from written statements, 141–142 Equifax, 452 Equities, 524 defined, 733 Equity, 527 owner’s, 524, 527, 528 stockholders’, 527, 528 Escrow account, 495 Estimate, Even division, 19 Exact interest, 331 Exchange Traded Funds (ETFs), 827 Excise taxes, 648–653, 680–681 calculating, 652–653 defined, 648 Index I-4 Exemptions, 298 Expenses, 537 operating, 250 Experian, 452 Expression, 133 writing from written statements, 141–142 Extended term insurance option, 699 External data, 777 Extra, Ex, or X dating, 234 F F.O.B., 205 F.O.B destination, 205 F.O.B shipping point, 205 Face value, 695 Fair Credit and Charge Card Disclosure Act, 441 Fair Isaac and Co., 452 Fair Isaac Corporation, 578 Fair Labor Standards Act, 286 Fair market value, 655 Fairchild Bridal Group, 182 Fast lube industry, 348 Federal Housing Administration (FHA), 490 Federal income tax (FIT), 298 determining employee’s withholding using the combined wage bracket tables, 301–304 Federal Insurance Contribution Act (FICA), 296 Federal reserve board, 459 Federal Reserve Bulletin, 777 Federal Unemployment Tax Act (FUTA), 309 Federal unemployment taxes (FUTA), computing, 309 FedEx Corporation, consolidated statements of income, 547 FedEx Express, 547 FedEx Freight, 547 FedEx Ground, 547 FedEx Kinko’s, 547 Office and Print Services, 154 Fee, nonsufficient fund, 113 FICA tax computing, 296–298 for employers, 307–308 FICO scores, 452, 578 Fila, 575 Finance charge, 441 calculating by the unpaid or previous month’s balance method, 443–445 calculating by using the average daily balance method, 445–447 calculating of, 448–451 Finance charge distribution, 466 Finance charge of an installment loan calculating by using the APR tables, 464–465 calculating the amount of, 456–457 Finance charge rebate, 465 calculating by using the sum-of-thedigits method, 465–468 Financial analysis, 524 Financial data, preparing a trend analysis chart and graph of, 553–555 Financial institutions, largest U.S., 203 Financial position, 524 Financial ratios, 523–564 and trend analysis, 547–555, 563–564 calculating, 548–552 defined, 547 Financial risk, 733 Financial statements, 523–564 defined, 524 personal, 15 traditional depreciation methods used for reporting, 616–624, 637–638 Fire insurance, 705 annual premiums, 706 premiums, calculating, 704–707 First-in, first-out (FIFO) method, 581, 582 defined, 581 pricing inventory by, 581–583 Fixed-rate mortgages, 490–501, 512–513 calculating the monthly payment and total interest paid on, 491–493 Flexible benefit program, 310 Flow of costs, 580 Flow of goods, 580 Food marketing facts and figures, 216 Food Marketing Institute, 216 Forbes, 524, 777 Ford, 436 Form 1040, U.S Individual Income Tax Return, 662, 672–673 Form 1040A, short form, 662 Form 1040ES, Quarterly Estimated Tax Payment Voucher, 311 Form 1040EZ, short form, 662 Form 2688, additional extension, 689 Form 7004-SM-Request for Earnings and Benefit Estimate Statement, 301 Formula, 133 adjustable-rate mortgages, 512 amortization, 423–424, 428 bonds, 764 calculating APR by, 463–464 cash discounts and terms of sale, 238 closed-end credit, 475 commission, 315 community tax rate, 680 compound interest, 380–381, 393 declining-balance method, 636 discounting a note before maturity, 358 efficiency ratios, 559 fixed-rate mortgages, 512 fringe benefits, 315 future value of an annuity, 408–409, 428 grouped data, 810 home equity loans and lines of credit, 512 hourly wages, 315 income tax, 680 inventory estimation—gross profit method, 605 inventory estimation—retail method, 604 inventory turnover—cost, 605 inventory turnover—retail, 605 inventory valuation—average cost method, 604 invoice, 238 leverage ratios, 559 life insurance, 721 liquidity ratios, 559 MACRS depreciation, 636 markdown, 274–275 markup, 274 maturity value, 332 mutual funds, 764 natural resource depletion, 636 open-end credit, 475 payroll deductions, 315 percentage, 172–179, 194, 195 perishables, 275 piecework, 315 present value, 389–390, 393 present value of an annuity, 416–417, 428 profitability ratios, 559 property insurance, 721–722 property tax, 680 purchasing U.S Treasury bills, 358 quarterly estimated tax, 315 rate of change, 194 sales and excise taxes, 679 simple discount notes, 358 simple interest, 329–330, 331–332, 339–345, 358, 360–361, 374 sinking fund, 422–423, 428 stocks, 764 straight-line method, 636 sum-of-the-years’ digits method, 636 target inventory, 605 trade discount—series, 238 trade discounts—single, 238 ungrouped data, 810 units-of-production method, 636 Fortune, 524, 777 Four Seasons, 471 Fractions, 33–61 addition and subtraction of, 41–51, 59–60 common or proper, 34 complex, 35 converting decimals to, 83–84 converting improper to whole or mixed numbers, 35–36 converting percents to, 169–170 converting to decimals, 83–85 defined, 34 division of, 53–54, 60–61 improper, 34 like, 39, 43 multiplication of, 51–52, 60–61 raising to higher terms, 39 reducing to lowest terms, 37–39 types of, 34–35 understanding and working with, 34–39, 58–59 unlike, 43–44 Frequency, 804 Frequency distribution, 804 constructing, 804–805 grouped data, 804–807, 814–815 preparing a histogram of, 806–807 relative, 810 Frequency table, 804 Fringe benefit expenses, calculating employer’s, 310–311 Fringe benefits, 307 Front-end load, 757 Fuel Economy Guide, 56 Full endorsement, 103, 104 defined, 102 Full-service brokers, 741 Fundamental processes, decimal numbers and, 73–77, 88 Funds, sinking, 419–424, 430–431 Future amount calculating present value of by using the present value formula, 389–390 calculating the present value of by using present value tables, 386–388 Future value (FV), 373 and present value at compound interest, 373 calculating using the compound interest formula, 380–381 computing using compound interests tables, 375–378 manually calculating, 374–375 of $1 at compound interest, 376 present value to, 386 Future value of an annuity, 428–429 defined, 403 ordinary and annuity due, 402–409 time line illustrating, 402 Future value of an annuity due, calculating by using tables, 406–407 Future value of an ordinary annuity calculating by formula, 408–409 calculating by using tables, 402–406 of $1.00 (Table), 404–405 G Gain (loss), computing on a stock transaction, 741–743 Game Stop, 152 Gap, 327 Gas pricing, fractions and, 38 Gas spectrum, 181 Index General Aviation Manufacturers Association, 425 Genworth Financial, 695 GI Bill of Rights, 490 GI Loan, 490 Goods perishable, 270, 277–278 seasonal, 268 staple, 268 Goods sold, cost of, 250 Google, 760 Grade point average (GPA), 801 Graph, 781 of financial data, 553–555 Greatest common divisor, 37 reducing fractions by, 38–39 Gross, 538 Gross earnings, 285 Gross margin, 538 Gross margin method, 593 Gross pay, 285 calculating by hourly wages, including regular and overtime rates, 286–287 calculating by straight and differential piecework schedules, 287–289 calculating by straight and incremental commission, salary plus commission, and drawing accounts, 289–292 Gross profit, 538 Gross profit margin, 551 Gross profit method, 593 estimating the value of ending inventory by, 593–595 Group insurance, 730 Grouped data, 804 calculating the mean of, 805–806 frequency distributions, 804–807, 814–815 Grouping symbols, 143–144 Gulfstream Aerospace Corporation, 425 H Haagen-Dazs, 802 Half-year convention, 629 Health care insurance, 700 Hill’s, 171 Hilton, 471 Hindu-Arabic number system, Histogram, 806 preparing a frequency distribution, 806–807 Holmes, Oliver Wendell, 648 Home Depot, 193, 327 Home equity lending, 507 Home equity line of credit, 506 Home equity loans, 506–509, 514 defined, 506 Home improvement, 398 Home-based business, 714 Homeowner’s insurance, average annual expenditure for (1997– 2007), 705 I-5 Honda, 436 Horizontal analysis of a balance sheet, 531–534 of an income statement, 542–545 Hotels.com, 23 Hourly rate, 286 Hourly wage, 286 Housing expense ratio, 508 calculating, 508–509 HSBC Holding, 203 Human resource managers, 315 Hyatt, 471 Hybrid cars, 436 I Iams, 171 Improper fraction, 34 converting mixed numbers to, 36–37 converting to whole or mixed numbers, 35–36 Incentive pay plans, employee’s gross earnings and, 285–292, 316–317 Income before taxes, 539 net, 539 source for school districts, property taxes, 656 taxable, 662 Income shortfall, 701 calculating the amount of life insurance needed to cover dependents’, 701 Income statement, 537–545, 547, 561–562, 621 common-size, 541 components, 538–540 defined, 537 horizontal analysis of, 542–545 preparing, 537–540 vertical analysis of, 541–542 Income tax, 539, 661–662, 682–684 defined, 662 reporting, IRS prescribed methods for, 628–634, 638–639 Increase determining amounts in, 186–190 determining the rate of, 183–186 Incremental commission, 289–290 defined, 289 Index numbers, 553 Index rate, 500 Industry Norms and Ratios, 548 Industry standards, calculating target inventories based on, 600–601 Infiniti, 825 Inflation, 427, 439 factor, 392 Information, 777 from a table, reading and interpreting, 778 statistical, 783 Initial interest rate, 500 Initial public offering (IPO), 742 Inspection, reducing fractions by, 37–38 Installment financing, 466 Installment loans, 455–468, 477–478 calculating the amount of the regular monthly payment by the add-on interest method, 457–459 calculating the annual percentage rate by APR tables and by formula, 459–464 calculating the finance charge and monthly payment by using the APR tables, 464–465 calculating the total deferred payment price and the amount of the finance charge of, 456–457 defined, 455 Insurance, 693–724 condominium, 708 defined, 694 endowment, 696 fire, 705 health care, 700 life, 695, 700, 722–723 limited payment life, 696 motor vehicle, 714–719, 724 nontraditional, 696–697 permanent, 696 property, 700, 704–712, 723–724 renter’s, 708 term, 696 whole life, 696 Insurance agents, 704 Insurance Information Institute, 696, 705 Insured, 695 Insurer, 694 Intangible assets, 635 Integer, Interest accrued, 750 compound, 329, 372–381 defined, 329 exact, 331 ordinary, 331, 343 simple, 329 understanding and computing simple, 329–335 Interest rate of an adjustable-rate mortgage, calculating, 500–501 Interest-bearing promissory note, 349 Interest-rate cap, 500 Internal company sources, 777 Internal Revenue Service See IRS International Dairy Queen (IDQ), 164 Inventory, 579–608 beginning, 538 calculating target based on industry standards, 600–601 defined, 580 ending, 538, 591–595 Inventory estimation, 591–595, 607 Inventory turnover, 550, 597 and targets, 597–601, 607–608 Inventory turnover rate calculating at cost, 599–600 calculating at retail, 598–599 Inventory valuation, 580–587, 605–606 Inventory pricing by FIFO method, 581–583 LIFO method, 583–585 lower-of-cost-or-market (LCM) rule, 586–587 using the average cost method, 585–586 Invert, 53 Investment side fund, 697 Investment trusts, 755 Investments, 732–767 calculating the return on, 760–761 conservative, 733 other assets and, 526 return on, 552 Invoice, 205–210, 239 defined, 205 extending and totaling, 208–210 reading and understanding the parts of, 205–208 terminology and abbreviations of, 206 Invoice date, 226 Invoice format, 206 Invoice subtotal, 208 Invoice total, 208 IRS, 285, 581 audits, 663 Circular E: Employer’s Tax Guide, 296, 297 Form 1040 ES, Quarterly Estimated Tax Payment Voucher, 311 Form 4868, extension, 689 prescribed methods for income tax reporting, 628–634, 638–639 Publication 15-A: Employer’s Supplemental Tax Guide, 301 publication: 1040 Forms and Instructions, 662 iShares, 827 iTunes, 80 J Jiffy Lube International, 348 Johnson, Earvin “Magic”, 203 JP Morgan Chase, 203, 338 Junk bonds, 749 K KB Toys, 152 Kellogg Company and subsidiaries, consolidated balance sheets, 536 Keystone markup, 257 Keystoning, 257 Kilometer, 78 Kmart, 152 Knowns, 133 Kroger, 192, 193, 327 L L.L Bean, 327 Lapse, 699 Index I-6 Last-in, first-out (LIFO) method, 581, 584 defined, 583 pricing inventory by, 583–585 Lease vs purchase, 487 Least common denominators (LCDs), 42 Lending ratio guidelines, 508–509 Level-payment plan, 494 Leverage ratios, 548 defined, 551 Lexus, 436, 825 LF, LLC, 41 Liabilities, 524 and owner’s equity, 526–527 current, 526 long-term, 527 on personal balance sheet, 14–15 Liability, 714 Life insurance, 694–702, 722–723 calculating the amount needed to cover dependents’ income shortfall, 701–702 defined, 695 types of, 696–697 understanding, 695–699 Life insurance companies, top 10 by revenue, 695 Life insurance premium factors, 698 Like fractions, 39 defined, 43 subtraction of, 45 Limited payment life insurance, 696 Lincoln, 825 Line chart, 779 multiple, 780 reading and constructing, 779–784 single, 780 Lines of credit, 441–451, 476–477, 506–509, 514 calculating personal, 448–451 defined, 448 Link2Gov Corporation, 311 Liquidity of investments, 733 Liquidity ratios, 548, 549–560 defined, 549 List price, 212 Load, 757 Loan date, 333 Loans calculating the maturity value of, 332–333 calculating the number of days of, 333–334 conventional, 490 determining the maturity date of, 334–335 GI, 490 home equity, 506–509, 514 installment, 455–468, 477–478 involving partial payments before maturity, calculating, 343–345 secured, 442 unsecured, 442 with terms of days, calculating simple interest for by using the exact interest and ordinary interest methods, 330–332 with terms of years or months, computing simple interest for, 329–330 Long Drug Stores, 224 Long-lived assets, 616 Long-term assets, 616 Long-term liabilities, 527 Loss, computing compensation due in the event of, 709–710 determining each company’s share when liability is divided among multiple carriers, 710–712 net, 539 profit or, 537 Lowe’s, 41, 193, 327 Lower-of-cost-or-market (LCM) rule, 581 defined, 586 pricing inventory by, 586–587 M MACRS See Modified accelerated cost recovery system (MACRS) Magic Triangle for remembering percentage formulas, 173 simple interest formula, 339 solving for principal, 339–340 solving for rate, 340–341 solving for time, 342 Mandatory deductions, 296 Margin, 250, 500, 538 Markdown, 264 computing the final selling price after a series of, 268–269 determining the amount of, 265–266 determining the sale price after, 266–267 finding the original price before, 267–268 multiple operations, and perishable goods, 264–270, 277–278 Markdown cancellation, 265 Markdown percent, determining the amount of, 265–266 Market share of pet foods and treats, U.S., 171 Marketing Research Association, 55 MarketResearch.com, 825 Markon, 250 Markup(s), 249–264 computing the final selling price after a series of, 268–269 defined, 250 keystone, 257 percent, 252–253, 258, 260–262 using the retailing equation to find amount of, 250–252 Markup based on cost, 250–255, 275 defined, 252 Markup based on selling price, 258–262, 277 defined, 258 Markup table, 252 Marriott International, Inc., 182, 471 Mars, 171 Mass Mutual Life Insurance, 695 MasterCard, 203, 311, 357 Mathematical symbols, 135 Maturity calculating loans involving partial payments before, 343–345 discounting notes before, 352–353 Maturity date, 333 of a loan, determining, 334–335 Maturity value, 332 formula, 332 of a loan, calculating, 332–333 Mean, 797 calculating of grouped data, 805–806 Measures of central tendency and dispersion, ungrouped data, 797–801, 813–814 Median, 798 determine, 798–799 Medical measurements, 79 Medicare, determining employee’s withholding using the combined wage bracket tables, 301–304 Medicare tax, 296 Mercedes Benz, 825 Merrill Lynch, 774 MetLife, 695 Micrometer, 73 Micron, 73 Minuend, 11 Minus sign, 9–10 Mixed decimals, 68 Mixed number, 35 addition of, 44–45 converting improper fractions to, 35–36 converting to improper fractions, 36–37 division of, 53–54 multiplication of, 52–53 subtraction of, 46–47 Mode, 799 determining, 799–800 Modified accelerated cost recovery system (MACRS), 616 calculating depreciation by, 628–632 cost recovery percentage table, 630 defined, 628 property classes general depreciation system, 629 Money, 777 Money business, 131 Money factor, 487 Monthly credit card statement, 444 Monthly Labor Review, 777 Monthly pay periods, prorating annual salary on the basis of, 285–286 Monthly payment of an installment loan calculating by using the APR tables, 464–465 calculating the amount of by the add-on interest method, 457–459 Monthly payments historical mortgage rates and, 491 to amortize principal and interest per $1000 financed, 492 Monthly PITI of a mortgage loan, calculating, 495–496 Months, simple interest formula, 329 Moody’s Investors Service, 749, 777 Morgan Stanley, 774 Mortgage brokers, 511 Mortgage discount points, 491 Mortgage loan, calculating the monthly PITI of, 495–496 Mortgage rates and monthly payments, historical, 491 Mortgage shopping worksheet, 497–498 Mortgages, 419, 489–514 adjustable-rate, 490–501, 512–513 defined, 455, 490 fixed-rate, 490–501, 512–513 Motor vehicle insurance, 714–719, 724 annual premiums for bodily injury and property damage rates, 716 annual premiums for collision and comprehensive rates, 716 defined, 714 understanding, 714–718 Movie theaters, 644 Multiple carriers, 710 determining each company’s share of loss when liability is divided among, 710–712 Multiple line chart, 780 Multiplicand, 16 Multiplication, 16 of decimals, 74–75 of fractions, 51–54, 60–61 of mixed numbers, 52–53 of whole numbers, 15, 16–18, 26 shortcut, 16, 75 Multiplier, 16 Municipal bonds, 754 Municipal solid waste, 148 Mutual Fund Quotation Table, 756 reading, 755–757 Mutual funds, 755–761, 766–767 calculating the net asset value of, 758–759 calculating the number of shares purchased of, 759–760 defined, 755 understanding, 755–757 N Nasdaq-100 Index Tracking Stock (QQQQ), 827 National Association of Chain Drug Stores (NACDS), 224 Index National Association of Home Builders, 64 National Association of Insurance Commissioners, 718 National Bicycle Dealers Association, 472 National Distribution of FICO Scores, 578 National Housing Act of 1934, 490 National Marine Manufacturers Association, 357 National Restaurant Association, 85 National Retail Federation, 664 National Sporting Goods Association, 472 Natural resources, 633 calculating the periodic depletion cost of, 633–634 Nestle Purina, 171 Net, 538 Net amount, 226 Net amount due, calculating, 226–228 calculating with credit given for partial payment, 228–229 Net asset value (NAV), 757 of a mutual fund, calculating, 758–759 Net date, 226 determining by using various dating methods, 230–234 Net earnings, 285 Net income, 539, 582 Net income tax, calculating after taxes, 675–677 Net loss, 539 Net pay, 285 Net price, 213 calculating by using a series of trade discounts, 219 calculating by using the net price factor, complement method, 213–214 of a series of trade discounts, calculating by using the net price factor, complement method, 219–220 Net price factor, 213 Net profit, 539 Net profit margin, 552 Net sales, 601 Net worth, 526, 527 on personal balance sheet, 14–15 New Balance, 575 New York Life Insurance, 695 New York Stock Exchange, 737 Newspaper circulation, 153 Nike, 575 Nokia, 32 Nominal rate, 379 Nonforfeiture options, 699 calculating the value of various, 699–701 defined, 699 Nonsufficient fund (NSF) fee, 113 Nontraditional insurance, 696–697 I-7 No-par value stock, 734 Northwestern Mutual, 695 Notes, discounting before maturity, 352–353 Numbers decimal, 68 mixed, 35 prime, 42 rounded, whole, 1–26 Numerator, 34 Nuptial numbers, 182 O O’Reilly Automotive, 247 Odd lot, 742 Odd pricing, 251 Offer price, 757 Official Payments Corporation, 311, 679 Old Age, Survivors, and Disability Insurance (OASDI), 296 Online banking, 97 Online credit application, 442 Online sales, 327 Open-end credit, 441–451, 476–477 defined, 441 Operating expenses, 250 total, 539 Operating statement, 537 Opinion and market research industry, 55 Opportunity cost, 130, 465, 487 Orbitcast.com, 223 Ordinary annuity, 402–409 calculating the future value of by formula, 408–409 calculating the future value of by using tables, 402–406 calculating the present value of by formula, 416–417 calculating the present value of by using tables, 411–412 defined, 403 formula, 408 of $1.00, future value of, 404–405 of $1.00, present value of, 414–415 Ordinary dating, 232 Ordinary interest, 343 defined, 331 Original basis, 616 Original price, finding before a markdown, 267–268 Outsourcing, 286 Outstanding checks, 113 Outstanding shares, 742 Overall cap, 500 Overdraft protection, 203 Overhead, 250 Overtime, 286 Owner’s equity, 527, 528 defined, 524 liabilities and, 526–527 Ownership rights, 699 Ownership share, 733 P Par value, 734 Parentheses, 138 rule, 138 Partial payment, 228 calculating net amount due with credit given for, 228–229 time line, 343 Pay gross, 285, 286–289 net, 285 take-home, 285 Payee, 98 Pay-for-radio business, 223 Payments, tax, 674 Payoff, calculating the amount of when a loan is paid off early by using the sum-ofthe-digits method, 465–468 Payor, 98 Payroll, 284–318 employee’s deductions, 296–304, 317 Payroll deductions mandatory, 297 married, paid weekly, 302 single, paid monthly, 303 Pennzoil-Quaker State Co., 348 Penske Truck Leasing, 626 Pepsi, 82 Percent change finding the new amount after, 186–188 finding the original amount before, 188–190 Percent markup based on cost, converting to percent markup based on selling price, 260–261 based on selling price, converting to percent markup based on cost, 261–262 calculating based on cost, 252–253 calculating based on selling price, 258 Percent method, calculating sales tax by, 650–651 Percent sign, 167 Percentage, 173 Percentage formula Magic Triangle for remembering, 173 solving for principal, 339–340 solving for rate, 340–341 solving for time, 342 using to solve business problems, 172–179, 195 Percentage method, 298 amount for one withholding allowance, 299 calculating an employee’s federal income tax withholding (FIT) by, 298–301 of withholding, tables for, 300 Percentage points, 190 understanding and solving problems involving, 190 Percents and their applications in business, 166–196 converting to decimals, 167–169 converting to fractions, 169–170 defined, 167 solving other business problems involving, 183–190, 195–196 understanding and converting, 167–172, 194 Periodic cap, 500 Periodic depletion cost of natural resources, calculating, 633–634 Periodic inventory system, 580 Perishable goods, 277–278 calculating the selling price of, 270 defined, 270 Perks, 310 Permanent insurance, 696 Perpetual inventory system, 580 Perquisites, 310 Personal finances, 95 Personal financial statements, 15 Personal lines of credit, calculating, 448–451 Personal property, 655 Pete’s Super Submarines, 485 Pharmacy and drug store industry, 224 PhoneCharge, Inc., 679 Pie chart, 791 defined, 790 reading and constructing, 790–793 Piecework, 287 PITI, 495 of a mortgage loan, calculating the monthly, 495–496 Place value chart for whole numbers, Place value system, Plus sign, 7–8 Policy, 695 Policyholder, 695 Pools, 733 Portion, 190 defined, 172 solving for, 174–175 Preferred stock, 734 distributing dividends on, 733–734 Premium, 695, 748 annual fire insurance, 706 calculating, 697–699 calculating fire insurance, 704–707 calculating for short-term policies, 707–709 calculating for various types of policies, 695–699 calculating motor vehicle insurance, 714–718 Premium factor, 698 Index I-8 Present amount, 373 Present value (PV), 371–395 defined, 373 Present value and future value at compound interest, 373 Present value formula, calculating present value of a future amount by using, 389–390 Present value of $1 at compound interest, 387 Present value of a future amount calculating by using present value tables, 386–388 calculating by using the present value formula, 389–390 Present value of an annuity, 411–417, 429–430 defined, 411 time line illustrating, 402 Present value of an annuity due calculating by formula, 416–417 calculating by using tables, 412–415 Present value of an ordinary annuity calculating by formula, 416–417 calculating by using tables, 411–412 of $1.00 (Table), 414–415 Present value table, 387 calculating the present value of a future amount by using, 386–388 Present value table factors, creating for periods beyond the table, 388–389 Present value to future value, 386 Price cash, 456 purchase, 456 Price-earnings (PE) ratio, 740 of a stock, determining, 740–741 Prime number, 42 Principal, 329 solving for, 339–340 Principal Financial, 695 Private mortgage insurance (PMI), 490 Proceeds, 350, 741 computing on a stock transaction, 741–743 Product, 16 Profit, 538 net, 539 Profit and loss statement, 537 Profit or loss, 537 Profitability ratios, 548, 551–552 defined, 551 Promissory note, 349 interest-bearing, 349 understanding, 349–354, 361–362 Proper fraction, 34 Property appraiser, 655 Property class, 629 Property insurance, 700, 704–712, 723–724 defined, 704 short-rate schedule, 707 understanding, 704–707 Property tax, 655–660, 681–682 calculating the amount of, 655–658 defined, 655 Property, plant, and equipment, 526 Proportion, 150 Prox, 232 Proximo, 232 dating, 232–233 Proxy statement, 525 Prudential Financial, 695 Public relations (PR), 796 Public Storage, 626 Publication 15-A: Employer’s Supplemental Tax Guide, 301 Publicly held corporation, 734 Purchase price, 456 Purchase vs lease, 487 Q Qualifying ratios, 508 Quarterly estimated tax, calculating for self-employed persons, 311–312 Quarterly Estimated Tax Payment Voucher, Form 1040 ES, 311 Quick ratio, 549 Quotient, 18 R Radio Shack, 519 Raise to higher terms, 39 Ramada, 471 Range, 800 determining, 800–801 Rate, 172, 329 coupon, 748 solving for, 175–177, 340–341 U.S prime, 448 Rate of change formula, 183, 190 Rate of increase or decrease, determining, 183–186 Rating factor discounts, 717 Rating factors, 715 Ratio, 149, 548 acid test, 549 and proportion problems, understanding and solving, 149–151 asset turnover, 550 calculating financial, 548–552 cost, 591 cost to retail, 591 coverage, 709 current, 549 debt-to-assets, 551 efficiency, 548, 550–551 financial, 523–564 housing expense, 508 lending guidelines, 508–509 leverage, 548, 551 liquidity, 548, 549–560 price-earnings, 740 profitability, 548, 551–552 qualifying, 508 quick, 549 working capital, 549 Raytheon, 425 Real estate, 655 defined, 490 Real property, 655 Rebate fraction, 466 Reciprocals, 53 Recording studios industry, 484 Redcats USA, 327 Reduce to lowest terms, 37 Reduced paid-up insurance option, 699 Reebok, 575 Refund due on canceled policies, 707–709 regular, 708–709 short-rate, 707–708 Regular refund, 708–709 Relative frequency distribution, 810 Remainder, 9–10, 19 Renter’s insurance, 708 Repeating decimal, 84 Res summa, 74 Residual value, 487 defined, 616 Restrictive endorsement, 103, 104 defined, 102 Retail advertisers, 193 Retail, calculating inventory rate at, 598–599 Retail method, 591 estimating the value of ending inventory by, 591–593 Retail store managers, 211 Retailers, top U.S., 327 Retailing, 327 Retailing equation, 250 understanding and using to find cost, amount of markup, and selling price of an item, 250–252 Retained earnings, 527 Return on investment (ROI), 552, 760 calculating, 760–761 Return on investments, 733 Returned item, 113 Revenue, 538 defined, 537 from taxes, 648 top 10 life insurance companies by, 695 Revolving credit, 443 Risk financial, 733 shared, 694 vs return, 733 Rite Aid, 224 ROG dating, 233–234 defined, 233 Root, 134 Round lot, 742 Rounded numbers, Rounding all the way, Rounding whole numbers, 4–6 Royal Bank of Scotland, 203 Rule of 72, 375 Rule of 78, 465 Rules of divisibility, 37 Ryder, 626 S S corporation, 676 S&P 500, 827 Safety of investments, 733 Safeway, 192, 193, 327 Salary, 285 prorating annual, on the basis of weekly, biweekly, semimonthly, and monthly pay periods, 285–286 Salary plus commission, 291 Sale price, 265 determining after a markdown, 266–267 Sale, terms of, 225–234, 240–241 Sales charge and sales change percents of a mutual fund, calculating, 757–758 Sales report, 778 Sales tax brackets, 649 Sales tax rate, 648 Sales tax tables, determining sales tax by, 649–650 Sales taxes, 648–653, 680–681 calculating amount of when total purchase price is known, 651–652 calculating by the percent method, 650–651 defined, 648 determining by sales tax tables, 649–650 Salvage value, 616 Sam’s Club, 453 Satellite Radio, 223 Scientific measurements, 79 Scrap value, 616 Sea Ray, 357 Sears, 193, 327 Seasonal goods, 268 Second mortgages, home equity loans and lines of credit, 506–509, 514 Section 179 deductions, 630 table, 630 Secured bonds, 746 Secured loan, 442 Securities and Exchange Commission’s Investor Information Service, 757 Self-employed person calculating quarterly estimated tax for, 311–312 tax responsibility, 307–312, 318 Self-Employment Contribution Act (SECA), 308 Self-employment tax, 307–308 Selling price calculating amount of when total purchase price is known, 651–652 calculating percent markup based on, 258 Index calculating when cost and percent markup based on cost are known, 253–254 calculating when cost and percent markup based on selling price are known, 259 computing the final after a series of markups and markdowns, 268–269 markup based on, 258–262, 277 Selling price of an item, using the retailing equation to find, 250–252 Selling price of perishable goods, calculating, 270 Semimonthly pay periods, prorating annual salary on the basis of, 285–286 Series trade discount, 218 Service sector businesses, 12 Servicemen’s Readjustment Act, 490 Settlement statement, 497 7-Eleven, 121 Shared, risk, 694 Shareholder, 734 Shares calculating the number purchased of a mutual fund, 759–760 defined, 733 outstanding, 742 Sheraton, 471 Shipping terms, 205, 209 Shopping centers, top U.S., 257 Shortcut, 174, 447 division, 19, 77 multiplication, 16–17, 75 Short-rate, 707 refund, 707–708 Short-term policy, 707 calculating premiums for, 707–709 Simmons, Russell, 203 Simple annuity, 402 Simple discount notes, 350 calculating bank discount and proceeds for, 350 calculating true or effective rate of interest for, 351–352 Simple interest, 329 calculating for loans with terms of days by using the exact interest and ordinary interest methods, 330–332 computing for loans with terms of years or months, 329–330 understanding and computing, 329–335, 359–360 Simple interest formula, 374 days, 331–332 using, 339–345, 360–361 years or months, 329–330 Single equivalent discount, 221 Single line chart, 780 Sinking fund payment calculating the amount of by table, 420 calculating by formula, 422–423 Sinking funds, 419–424, 430–431 defined, 419 I-9 Sirius Satellite Radio, Inc., 223 Skier’s Choice, 357 Small Business Administration (SBA), 714 Smith Barney, 774 Social Security Administration, 301 Form 7004-SM-Request for Earnings and Benefit Estimate Statement, 301 Social Security tax (OASDI), 296 determining employee’s withholding using the combined wage bracket tables, 301–304 Solar Energy, 470 Solar Home.org, 470 Solution, 134 Solve an equation, 133 SPDRs, 827 Special depreciation allowance, 630–632 Specialty retailer, 255 Specific identification method, 580 Speculative investments, 733 Spread, 500 Standard & Poor’s, 749, 777 Standard bar chart, 785 defined, 784 Staple goods, 268 Starbucks, 557, 558 State Unemployment Tax Act (SUTA), 309 State unemployment taxes (SUTA), computing, 309 Statistical Abstract of the United States, 777 Statistical inference, 777 Statistical information, 783 Stock certificate, 734 defined, 733 Stock exchanges, 741–742 Stock Quotation Table, 737–739 Stock turnover, 597 Stockbroker’s commission, 741 Stockholders, 29 annual meeting of, 525 defined, 741–742 Stockholders’ equity, 527, 528 Stocks, 733–743, 765–766 calculating current yield for, 739–740 capital, 527 common, 734 defined, 733 determining the price-earnings ratio of, 740–741 distributing dividends on preferred and common, 733–737 preferred, 734 understanding, 733–737 Straight commission, 289–290 defined, 289 Straight piecework plan, 287 Straight-line depreciation method, 617 calculating depreciation by, 617–618 Structural class rating, 706 Subtraction, of decimals, 73–74 of fractions, 41–51, 59–60 of mixed numbers, 45–47 of whole numbers, 7, 9–11, 25 verification of, 10–11 Subtrahend, 9–10 Subway, 485 Sum, 7–8 Summa, 74 Sum-of-the-digits method, 465 calculating depreciation by, 618–620 calculating the finance charge rebate and the amount of the payoff when a loan is paid off early, 465–468 Sum-of-the-years’ digits, 618 Sums, 74 SunTrust Bank, 203, 338 Supermarkets, top U.S., 192 Survey of Current Business, 777 T Table(s), 554 annual percentage rate (APR), 460–462 combined wage bracket, 301 compound interest, 376 defined, 778 for percentage method of withholding, 300 future value of an ordinary annuity of $1.00, 404–405 present value, 387 present value of an ordinary annuity of $1.00, 414–415 reading and interpreting information from, 778–779 withholding, 302, 303 Take-home pay, 285 Tangible assets, 635 Target, 152, 193, 327, 453 Target average inventory, 600 Tax assessor, 655 Tax Computation Worksheet, 670 defined, 665 using to calculate tax liability, 671–673 Tax credits, 674 Tax liability using the Tax Computation Worksheet to calculate, 671–673 using the Tax Table to determine, 665–670 Tax owed, calculating an individual’s amount of, 674–675 Tax Policy Center, 692 Tax rate, calculating to meet budgetary demands in a community, 658–660 Tax Reform Act of 1984, 628 Tax Reform Act of 1986, 628 Tax return, 662 calculating, 674–675 Tax Table, 666–669 defined, 665 using to determine tax liability, 665–670 Taxable bonds, 754 Taxable income, 662 calculating for individuals, 662–664 Taxation, 648 Taxes, 647–684 ad valorem, 655 excise, 648–653, 680–681 income, 539, 661–662, 682–684 income before, 539 other, 674 property, 655–660, 681–682 revenue from, 648 sales, 648–653, 680–681 Tax-free bonds, 754 Teaser rate, 500 Telemarketers, 322 Term, decreasing, 696 Term insurance, 696 Terminology for invoices, 206 Terms, 133 Terms of sale, 225–234, 240–241 dating methods, 232–234 defined, 225 time line, 227 Textron, Inc., 473 The College Board, 95 The Pep Boys-Manny, Moe and Jack, 247 The Survey of Current Business, 548, 601 Theme parks, 93 TIAA-CREF, 695 Time, 329 solving for, 341–342 Time line for discounted note, 352 for terms of sale, 227 illustrating present and future value of an annuity, 402 partial payment, 343 Time value of money, 372–381 compound interest, 393–394 defined, 373 Times sign, 16 Timeshare, 471 Title, 496 Tolstoy, Leo, 439 Total, 7–8 Total cost, 616 Total deferred payment price of an installment loan, calculating of, 456–457 Total obligations, 508 ratio of a borrower, 508–509 Toy Industry, 152 Toy Industry Association, 152 Toyota, 24, 436 Toys R Us, 152 Index I-10 Trade discount rate, calculating when list price and net price are known, 214–215 Trade discounts, 212 calculating the amount of by using a single equivalent discount, 221–222 series, 218–222, 240 single, 212–215, 239 Trade-in, 456 Trade-in value, 616 Traditional depreciation methods used for financial statement reporting, 616–624, 637–638 Transpose, 134 TransUnion, 452 Travel agents, 180 Treasury Inflation-Protected Securities (TIPS), 439 Trend analysis, 553 financial ratios and, 563–564 Trend analysis chart of financial data, 553–555 Tropical storm force wind speed probabilities, 184 True interest rate, 351 True or effective rate of interest for a simple discount note, calculating, 351–352 True Value Company, 590 Truth in Lending Act, 441, 456 Truth in Savings Law, 380 Two-part process, 168 U.S Environmental Protection Agency (EPA), 56 U.S Postal Service, 13, 199 U.S prime rate, 448 U.S rule, 343 U.S Treasury bills, 353 purchasing of, 353–354 U.S Treasury Inflation-Indexed Securities, 439 UBS, 774 U-Haul International, 626 Underwriter, 694 Uneven division, 19 Ungrouped data, 804 measures of central tendency and dispersion, 797–801, 813–814 Units-of-production, 623 calculating depreciation by, 623–624 Universal life, 697 Unknowns, 133 Unlike fractions, 43–44 subtraction of, 46 Unpaid or previous month’s balance method, calculating finance charge and new balance by, 443–445 Unsecured bonds, 746 Unsecured loan, 442 Unum Group, 695 USA, 575 Useful life, 616 Usher, 203 U V U.S Bancore, 203, 338 U.S Commerce Department, 601 U.S Department of Agriculture (USDA), 802 U.S Department of Commerce, 548 Variable life, 697 Variable/universal life, 697 Variables, 133 Vcoms, 121 Verification of addition, division, 19 multiplication, 17–18 subtraction, 10–11 Vertical analysis, 529 of a balance sheet, preparing, 529–530 of an income statement, 541–542 Veterans Affairs (VA) mortgage, 490 Victoria’s Secret, 327 Video gaming, 272 Vipers (VIPERs), 827 Visa, 203 Volume buying, 218 Voluntary deductions, 296 W W-4, Employee’s Withholding Allowance Certificate, 298 Wachovia, 203, 338, 774 Wage base, 296 reaching the limit, 297–298 Wages, 286 Walgreen’s, 224, 327 Wall Street Journal Online, The, 737, 756 Wall Street Journal, The, 448, 524, 755, 777 borrowing benchmarks chart, 449 Wal-Mart, 152, 193, 327, 453 Wal-Mart Supercenters, 192 Washington Mutual, 203, 338 Wasting assets, 633 Weekly pay periods, prorating annual salary on the basis of, 285–286 Weighted average method, 585 Wellcraft, 357 Wells Fargo, 203, 338 Whole life insurance, 696 Whole numbers, 1–26 addition of, 7–9, 25 converting improper fractions to, 35–36 defined, division of, 15, 18–21, 26 multiplication of, 15, 16–18, 26 place value chart, reading and writing, 2–4 rounding, 4–6 subtraction of, 7, 9–11, 25 Withholding allowances, 298 percentage method amount for one, 299 Withholding tables married, paid weekly, 302 single, paid monthly, 303 Withholdings, 296 tables for percentage method of, 300 Word problems, 8–9 using equations to solve businessrelated, 144–151, 157–158 Working capital, 549 Working capital ratio, 549 Written statements, writing expressions and equations from, 141–142 X X-axis, 779 XM Satellite Radio, Inc., 223 Y Y-axis, 779 Years, simple interest formula, 329 Z Zappos.com, 327 .. .Contemporary Mathematics for Business and Consumers 5th Edition Robert Brechner Miami-Dade College Contemporary Mathematics for Business and Consumers, Fifth Edition Robert Brechner... approach and real-life businessbased examples throughout, Contemporary Mathematics for Business and Consumers, 5e is designed to help you overcome math anxiety and confidently master key concepts and. .. math, finite math, and a special favorite— Robert Brechner’s Contemporary Mathematics for Business and Consumers By drawing upon his teaching experiences and contact with students and faculty, he