1 Review and Applications of

Basic Mathematics
Exercise 1.1
a. 10 + 10 × 0 = 10 + 0 = 10
c. (10 + 10) × 0 = 20 × 0 = 0
e. 0 + 3 × 3 – 32 + 10 = 0 + 9 – 9 + 10 = 10
g. 0 + 3 × 3 – (32 + 10) = 0 + 9 – 19 = –10
22 - 4 4-4 0
i. 2
= 2
= =0
(4- 2) 2 4

1. 20  4  2  8  20  8  8  4
3. 20  4  2  8  16  2  8  32  8  24
5. 20  4  2  8  20  8  8  20

7. 54  36  4  22  54  9  4  49

9. 54  36  4  2 2  18  6 2  18  36  0.5

82  42 64  16 48
11.   6
4  2 3
2 3 8

13. 36  42  517  20 2  3 10 2  5 32  3 100  5  9  300  45  255
15. 20  8  5  7   3  9  20  40  21  9  81  9  9
17. $1001 0.06  365
45
  $1001 0.00739726  $100.74
$500 $500 $500
19.    $453.51
1  0.05 2
1.05 2
1.1025
 1  0.042  1  1.04 2  1
  $100
0.0816 
21. $100   $100    $204.00
  
 0.04   0.04   0.04 

Concept Questions (Section 1.2)

1. You must retain at least one more figure than you require in the answer. To achieve four-
figure accuracy in the answer, you must retain a minimum of five figures in the values
used in the calculations. B)
3. We want seven-figure accuracy in the answer. Therefore, values used in the calculations
must retain at least eight figures. C)

Chapter 1: Review and Applications of Basic Mathematics 1

Exercise 1.2
1
a. 10
= 0.10 = 10%
1
c. 4
= 0.25 = 25%
1
e. 1 2 = 1.50 = 150%
10
g. = 2.00 = 200%
5
i. 0.25 × 80 = 20
k. Money in Savings = 0.20 × $1000 = $200
Money in TFSA = 0.50 × $200 = $100
1. 7
8
 0.87500  87.500%

3. 47
20
 2.3500  235.00%
5.  35
25
  1.4000   140.00%
7. 25
1000
 0.025000  2.5000%

9. 2
2 100  2.0200  202.00%
11. 37.5
50
 0.75000  75.000%
13. 5
6
 0.83  83. 3%
15. 7 79  7.7  777.7%

17. 10
9
 11
.  1111
.%

19.  270
7
  0.0259   2.592%
21. 11.3845  11.38
23. 0.5545454  0.5545
25. 1.0023456  1.002
27. 40.09515  40.10
29. 1
6
 0.16667  16.667 %

31. 1
60
 0.016667  16667
. %

33. 250
365
 0.68493  68.493%

35. 0 .11
12
 0.0091667  0.91667%

37. 
$92 1  0.095  112
365

 $92  1.02915  $94.68

39. 
$454.76 1  0.105  12 
11  $454.76  0.903750  $410.99

0.18 3 0.21 2
41. $1447 (1 + 2
) (1 + 3
) = $1447 (1.295029) (1.1449) = $2145.44

2 Business Mathematics in Canada, 9/e

 $3490 $3490
43. = = $3384.52
1+ 0.125´ 365
91
1.031164
$650 (1+ 0.105
2 ) = $650 (1.0525) = $720.04
2 2
45.
$15,400 $15,400
47. = = $14,435.88
(1+ )
6
0.13
12
1.01083336
49. ̅̅̅̅ × $1527 = $509.00
0.33
51. 2.50 × $25 = $62.50
53. 0.005 × $30 = $0.15
55. 0.12 × (0.055 × $458,000) = $3022.80
57. Sales of in-store products = 0.36 × $102 300 = $36,828
HST collected on in-store products = 0.13 × $36,828 = $4787.64
$6600 (1+ 0.085´ 153
365 ) $6600 (1.035630)
59. = = $6648.46
1+ 0.125´ 365 82
1.028082
é (1+ 0.09 ) 7 -1ù æ 0.05369613 ö
61. $1000 ê 12
ú = $1000 ç ÷ = $7159.48
êë 0.09
12 úû è 0.0075 ø
$9500 $9500
63. = = $1830.07
( 4 ) -1
5 0.09733216
1+ 0.075
0.01875
0.075
4
65. Seats not sold to season-ticket holders = 100% – 67.5% = 32.5%
Number of seats not sold to season-ticket holders = 0.325 × 19289 = 6269 seats
Rounded to the nearest 100, 6300 seats were not sold to season-ticket holders.

67. Portion of commission retained = 0.60  4.8% = 2.88%

Income is 2.88% of sales =0.0288 × $5,225,000 = $150,480
That is, $150,480 = 0.0288  Sales
Stan’s commission was $150,480.
69. Sodium intake from other foods = 100% – 35% = 65%
0.65 × 2300 mg = 1495 mg = 1.495 grams

Exercise 1.3
$58,800
1. Regular weekly earnings = = $1130.77
52
$1130.77
Equivalent hourly rate = = $32.31
35
Overtime hourly rate = 1.5($32.31) = $48.47
Gross pay for 39-hour week = $1130.77 + 4($48.47) = $1324.65

Chapter 1: Review and Applications of Basic Mathematics 3

 $54,600
3. Regular biweekly earnings = = $2100.00
26
$2100.00
Equivalent hourly wage = = $26.25
2  40
Hasad worked 3 hours of overtime in the first week and 6.5 hours in the second week.
Gross pay = $2100.00 + 9.5(1.5)$26.25 = $2474.06

5. Regular hours worked = 7.5 + 7.5 + 6 + 6 + 7.5 = 34.5

Overtime hours worked = 4.5 +1 + 1.5 =7
Gross earnings = 34.5($17.70) + 7(1.5)($17.70) = $796.50
7. Output in excess of quota = 4 + 6 + 7 + 8 + 10 = 35 shirts
Total pay = 40($7.50) + 35($3.00) = $405.00

9. October earnings = (# renewals)  $20 + (# new policies)  $35 + 0.055(Total premiums)

= 126($20) + 37($35) + 0.055($14,375 + $47,880)
= $7239.03
11. Estimated earnings from Supreme Audio & Video = $2000 + 0.04($55,000) = $4200
Estimated earnings from Buy-Right = $1500 + 0.03($25,000) + 0.06($55,000 – $25,000)
= $4050
13. Gross earnings = 0.033($50,000) + 0.044($50,000) + 0.055 ($40,000)
= $6050.00
15. a. Earnings = 0.05($20,000) + 0.075($20,000) + 0.10($14,880) = $3988.00
b. For the same earnings from a single straight commission rate,
Commission rate  $54,880 = $3988.00
$3988
Commission rate =  100% = 7.267%
$54,880

17. Commission earned in August = $3296.97 – $1500.00 = $1796.97

Hence,
Sales subject to commission = ($151,342 – $100,000) = $51,342
$1796.97
Commission rate =  100% = 3.50%
$51,342

19. Required monthly commission = $4000 – $2000 = $2000

Commission income on first $50,000 of monthly sales is
0.03($50,000 – $25,000) = $750
The combined commission and bonus rate on sales exceeding $50,000 is 3% + 3% = 6%.
Hence,
0.06(Sales exceeding $50,000) = $2000 – $750
$1250
Sales exceeding $50,000 = = $20,833.33
0.06
Required monthly sales = $70,833.33

4 Business Mathematics in Canada, 9/e

Concept Questions (Section 1.4)
1. You should calculate a weighted average when some of the values being averaged are
more important or occur more frequently than other values.
3. If you invest the same amount of money in each investment, each rate of return has the
same importance. The portfolio’s rate of return will then equal the simple average of the
individual rates of return.

Exercise 1.4
1. Weight each number of TV sets per household by the number of homes with that number
of TVs. The weighted average number of TVs per household in the survey sample is
(4  4)  (22  3)  (83  2)  (140  1)  (5  0)
= 1.53
254
Based on the survey, we estimate the average number of TVs per household to be 1.53.
3. We should weight each "goals against" figure by the number of games in which that
number was scored.
10  21  32  43  74  26  110
GAA = = 3.50
20
5. Babe Ruth’s weighted average slugging percentage is

714 (4)+136 (3)+506(2)+2873(1)+4170(0) 7149

8399
× 100 = 8399 × 100 = 0.85117 × 100 = 85.12%

7. The weighted average interest rate that will be charged on the new $57,500 balance is
$37 ,500(8%) + $20 ,000(7%)
= 7.65%
$57 ,500
9. Weight each score by the number of students who obtained that score. The weighted
average score is
210  69  98  77  36  25  13
= 7.53
30
11. Note that the age of receivables (rather than the dollar amount of receivables) is to be
averaged. The relative importance of each of the three age classifications is determined
by the dollar amount in each category. Hence, the weighting factors are the respective
dollar amounts of receivables. The (weighted) average age of accounts receivable is
$12,570 30   $6850 60   $1325 90  $907,350
 = 43.74 days
$12,570  $6850  $1325 $20,745

13. a. The weighted average cost of units purchased during the year is
300$10.86   1000$10.47   500$10.97 
= $10.67
1800
b. The weighted average cost of the beginning inventory and units purchased during the
year is
156$10.55   1800$10.674 
= $10.66
1956

Chapter 1: Review and Applications of Basic Mathematics 5

 c. Value of ending inventory = 239  Weighted average cost
= 239($10.66)
= $2547.74
Menu Menu price % of total
category
15. Each (as as
“Menu price % of
a%input cost)should
of cost” revenue
be weighted by the fraction of revenue obtained from the respect
Appetizers 300 10
Entrees 200 50
Desserts 225 15
Beverage 250 25

a. The weighted average menu price (as % of input cost) is

0.10300%  0.50200%  0.15225%  0.25250%

= 226.25% of input costs
0.10  0.50  0.15  0.25
On average, Menu prices = 2.2625(Input costs)

b. We can find the average input cost as a percentage of revenue (menu prices) by
rearranging the equation in part a:
Menu prices
= 0.44199(Menu prices)
2.2625
On average, input costs are 44.20% of revenue.

17. We want the average number of people No. of Number of

working over the course of the year. Period months employees
The given figures for the number of Jan. 1 to Mar. 31 3 14
employees added or laid off at various Apr. 1 to Apr. 30 1 14 + 7 = 21
times are used to determine the May 1 to May 31 1 21 + 8 = 29
cumulative number of people June 1 to Aug. 31 3 29 + 11 = 40
employed. Sept. 1 to Sept. 30 1 40 – 6 = 34
Each number in the third column Oct. 1 to Dec. 31 3 34 – 14 = 20
must be weighted by the number of
months in the second column. The average number employed was
314   121  129   340  134   320 
= 25.50
12

No. of Number of shares

19. Each number of shares in the
Period months outstanding (millions)
third column must be weighted
by the number of months in the Jan. 1 to Feb. 28 2 5
second column. The (weighted) Mar. 1 to May 31 3 5+1=6
average number of shares June 1 to Oct. 31 5 6 + 0.5 = 6.5
outstanding was Nov. 1 to Dec. 31 2 6.5 + 0.75 = 7.25

25  36  56.5  27.25 1million = 6.25 million = 6,250,000

12

6 Business Mathematics in Canada, 9/e

Exercise 1.5
1. GST Remittance
Quarter Sales – Purchases (Refund)
1 $155,365 $7768.25
2 (340,305) (17,015.25)
3 408,648 20,432.40
4 164,818 8240.90

3. The GST charged in each case will be

0.05($39,500) = $1975.00
a. With no PST in Alberta, the total amount paid will be
$39,500 + $1975.00 = $41,475.00
b. PST in Saskatchewan = 0.05($39,500) = $1975.00
Total amount = $39,500 + $1975.00 + $1975.00 = $43,450.00
c. PST in Quebec = 0.09975($39,500) = $3940.13
Total amount = $39,500 + $1975.00 + $3940.13 = $45,415.13
5. a. The HST reported for a $39.45 (pre-tax) item is 0.13($39.45) = $5.13.
b. The HST inclusive price is $39.45 + $5.13 = $44.58. If $50 cash is paid, change will be
based on the rounded price of $44.60. Therefore, change will be $50 - $44.60 = $5.40.

Mill rate 16.8629

7. Property tax =  Assessed value =  $227,000  $3827.88
1000 1000

15.0294 4.6423
9. Total taxes =  $143,000   $467,000
1000 1000
= $2149.204 + $2167.954
= $4317.16

Mill rate increase

11. a. Tax increase =  Assessed value
1000
Mill rate increase
$2,430,000 =  $6,780,000,000
1000
$2430
Mill rate increase =  1000 = 0.3584
$6,780,000
Next year’s mill rate = 7.1253 + 0.3584 = 7.4837
b. Next year's assessment = 1.05($6.78 billion) = $7.119 billion
Next year’s budget = Current year's taxes + $2,430,000
7.1253
=  $6.78 billion + $2,430,000
1000
= $50,739,534
Next year’s school mill rate applied to next year’s assessment must generate
enough tax revenue to meet next year’s budget. That is,
New mill rate
$50,739,534=  $7.119 billion
1000

Chapter 1: Review and Applications of Basic Mathematics 7

 $50,739,534
New mill rate = = 7.1273
$7,119,000

Review Problems
1. a. 2  3  20  2  2   8  3  20  2  8 = 25 – 20  10 = 25 – 2 = 23
3 2 3 2

b. 4 2  3  2   10  4  5  = 4(2  9 – 8) ÷ (10 – 20)

2 3 2 2

= 4  102 ÷ (– 10)
= – 40
 5
c. $213.85 1  0.095   = $213.85(1 – 0.039583) = $205.39
 12 
$2315 $2315
d. = = $2275.40
1  0.0825  365
77 1.0174041
2
 0.105 
e. $325.75 1    $325.75(1.053189) = $343.08
 4 
$710 $710
f.  = $619.94
1  0.0925
2
3 1.145266

 231  $476.50 $476.50

g. $885.75 1  0.0775   = $885.75(1.049048) –
 365  1  0.0775  49 1.010404
365
= $929.194 – $471.593
= $457.60

æ 0.0825 ö
3
$682 $682
h. $859 ç1+ ÷ + = $859(1.020767) +
è 12 ø (1+ 12 )
0.0825
2
1.013797
= $876.839 + $672.718
= $1549.56

3. 0.62 × $99 = $61.38

̅̅̅̅ = $1.00
5. 0.0075 × $ 133.33

7. Actual profit = 0.90 × $23,400 = $21,060

$56,600
9. a. Gross biweekly earnings = = $2176.92
26
$2176.92
Equivalent hourly wage = = $29.03
2  37.5
b. Total remuneration = $2176.92 + 4.5(1.5)$29.03 = $2372.87

8 Business Mathematics in Canada, 9/e

11. Total hours worked = 41 hours
Overtime hours worked = 1.5 (on Wednesday) + 0.5 (on Friday) = 2 hours
Regular hours worked = 41 – 2 (hrs of overtime) – 3 (hrs on stat holiday) = 36 hours
Regular earnings = 36($42.50) = $1530.00
Overtime pay = 2(1.5)$42.50 = $127.50
Holiday pay = 7.5($42.50) = $318.75
Holiday premium = 3(2)$42.50 = $255.00
Gross earnings = $2231.25

13. Commission earnings = Commission rate (Sales – $40,000)

$3188.35 – $1000 = Commission rate ($88,630 – $40,000)
$2188.35
Commission rate =  100% = 4.50%
$48,630

22 (5%)+18(2%)+32 (−9%)+ 28(−2%)

15. Average change in revenue for the year = 22+18+32+28
−198%
= = –1.98%
100

17. Rate of return on entire portfolio

= Weighted average rate of return
$5000 30%   20,000  3%  $8000  15%   $25,000 13%   $4500 45% 
=
$5000  $20,000  $8000  $25,000  $4500
= 7.96%

19. No. of Number of

Period months employees
July 1 to Aug. 31 2 7
Sept. 1 to Oct. 31 2 7+ 6 = 13
Nov. 1 to Nov. 30 1 13 + 18 = 31
Dec. 1 to Feb. 28 3 31 + 23 = 54
Mar. 1 to Mar. 31 1 54 – 11 = 43
Apr. 1 to Apr. 30 1 43 – 20 = 23
May 1 to June 30 2 23 – 16 = 7
The (weighted) average number of employees was
47  213  131  354  143  123
 26.1
12

Chapter 1: Review and Applications of Basic Mathematics 9