BUSINESS MATHEMATICS

Unit no 01:
INGREDIENTS OF MATHEMATICAL ECONOMICS.
DEFINATIONS
1. Variables:
A variable is something whose magnitude can changed or something that can take on different
values.
There are two type of variables:
a. Dependant variable
b. Independent variable
Types of variables:
Dependant variable Independent variable
the variable which define upon an other It is variable which can assume any values to its
variable to be constructed. own. It also have two types.
 Endogenous
 Exogenous
Types of Independent variables
Endogenous Exogenous
An endogenous variable is one whose value is An exogenous variable is one whose value is
influenced by another factor in the system. not influenced by another factor in the system.
Constants:
It is magnitude whose value does not change. When we constant with the variables it is known as
variables. Example: Y= Ax +Bx+c
X= variables ; A= coefficient ; C=constants
Parameter:
It is a constant that is a variable these are the constant which have same value within a given value
but may assumes the different value during some other problem and discussion.
 Examples: y=Ax+bx+c Z= dm+c
Equation:
It is a mathematical which shows that two things are equal. It consists of two expression one on each
side of an equal (=) sign.
Examples: 7x=8x
Types of equation
There are three types of equation.
 Definational equation
 Behavioral equation
 Conditional equation
Definm equation:
it is an equation that set up an identity between two alternative expression that have exactly the
same meanings.(profit) π=R-C
In this c represents the cost of production.
Behavioral equation:
It specify the manners in which a variable behaves in response to change an other variable.
Qd=a-BP inverse relation
d↑↑=P↓↓ opposite to each other
Qs=c+dP direct relation
Conditional equation:
A conditional equation is prerequistic for a particular descision.

4.5
4 Upward(Qs)= slope positive
3.5
3 Down word(Qd)= slope negative
2.5 Joining point is equilibrium state.
2
1.5
1
0.5
0
0 0.5 1 1.5 2 2.5

Identity equation:
The equation which satisfies all the values of known
L.H.S=R.H.S
(X+Y)2=X2+Y2+2XY
(2+3)2=22+32+2(2)(3)
25=4+9+12
25=25
Linear equation:
An equation whose highest power is 1 .
Standard form:
Y= f(x)=ax+b
(y is the function of x)
Y=a+bx
(Intercept a)( b is the slope)

3.5
x-axis= independent variable 3
y-axis=dependent variable 2.5
 Slope effect the value of upward falling 2
1.5 Y-Values
1
0.5
0
0 2 4
  Slope always found between the two conservative points.
y=2x+3
x= 1,2,3,0,-1,-2,-3
x=1 y=2(1)+3 y=5
x=2 y=2(2)+3 y=7
x=3 y=2(3)+3 y=9
x=0 y=2(4)+3 y=3
x=-1 y=2(-1)+3 y=1
x=-2 y=2(-2)+3 y=-1
x=-3 y=2(-3)+3 y=-3
10

0
-4 -3 -2 -1 0 1 2 3 4
-2

-4

Qd=16-2P
P=1,2,3,4
P=1 Qd=16-2(1) Qd=14
P=2 Qd=16-2(2) Qd=12
P=3 Qd=16-2(3) Qd=10
P=4 Qd=16-2(4) Qd=8
 Y-Values slope:
4.5 𝝋𝟐 − 𝝋𝟏
m2= ⁄𝒑𝟐 − 𝒑𝟏
4
m2= 10 − 12⁄3 − 2
3.5 m2=-2
3

2.5

2 Y-Values

1.5

0.5

0
0 5 10 15

Qs=-4+2P
P=1,2,3,4
P=1 Qs=-4+2(1) Qs=-2
P=2 Qs=-4+2(2) Qs=0
P=3 Qs=-4+2(3) Qs=2
P=4 Qs=-4+2(4) Qs=4

Y-Values
4.5
4 𝝋𝟐 − 𝝋𝟏
m2= ⁄𝒑𝟐 − 𝒑𝟏
3.5
3 m2= 2 − 0⁄3 − 2
2.5 m2=2
2 Y-Values
1.5
1
0.5
0
-4 -2 0 2 4 6

STRAIGHT LINE EQUATION

a. -3x +12 =21 d.( 5x + 3)/ 5 = (2x + 3)/ 3
solution: solution:
-3x =21-12 3(5x + 3) = 5 ( 2x + 3)
-3x=9 15x + 15 = 10x + 15
x=9/-3 15x – 10x = 15- 15
(x=-3) answer 5x = 0
 b. -2x+4 = x+6 X =0 answer
solution: 𝟏 𝟏
e. 𝟒𝒙+𝟏 ( 𝟐𝒙 + 𝟑) = 𝟏𝟎𝒙−𝟐 ( 𝟓𝒙 + 𝟔)
4-6 =x +2x
solution:
-2 = 3x
(10x – 2) ( 2x + 3) = (5x + 6) ( 4x + 1)
(-2/3 =x) answer
20x2 + 30x – 4x – 6 = 20x2 + 5x + 24x + 6
c. -2(4x + 3) = 6(x +12)
20x2 + 30x – 4x – 6 - 20x2 - 5x - 24x- 6 = 0
solution: -3x – 12 = 0
-8x – 6 = 6x +12
-3x = 12
-6 -12 =6x + 8x
x = 12/-3
-18 = 14x
x = -4 answer
-18/14 =x
-9/7 = x

TWO VARIABLE SYSTEM

4x + 5y = 335 _________(1) x + 2y = 8_____________(1)
9x + 14 y= 850 _________(2) -2x + 4y = -4 __________(2)
Solution: Solution:
By elimination method: Substitution method:
Multiplying eq( I ) 9 and eq (2) with 4 From equation 1:
36x + 45y = 3015 ________ (3) x + 2y = 8
36x + 56y = 3400 ________(4) x =- 2y + 8_______(3)
By eliminate eq ( 3) from eq (4) now putting the value of x in equation 2
36x + 45y _ ( 36x + 56y) = 3015– 3400 -2(-2y + 8) +4y = -4
36x + 45y _ 36x - 56y = - 385 4y – 16 + 4y = -4
-11 y = -385 8y = -4 + 16
Y = -385 / -11 Y = 12 / 8
Y= 35 Y= 3/ 2
Now putting the value of y in equation 1. Now putting the value of y in equation 3
4x + 5(35) = 335 x =- 2y + 8
4x + 175 = 335 x =- 2(3/ 2) + 8
4x = 335- 175 x= -2(3) + 8
4x = 160 x= -6 + 8
X = 160/4 x= 2
X= 40
Solution. Set :( x= 40 , y = 35 ) Solution. Set :( x=2 , y = 3/2)

Equillibrum condition of two market bulter and margarine with Pb and Pm.
-8Pb – 3Pm = 7 _________(1) Qd = 21 – 3p _________(1)
-Pb + 7Pm = 19 _________(2) Qs = -4 + 8p __________(2)
Solution: Solution :
By multiplying eq 2 by (8) and eq 1 with (-1) Elimination method:
8(Pb + 7Pm) = (19) 8 Now eliminate eq 1 from eq 2
8Pb - 56 Pm = -152_________ (3) Qs- Qd = -4 + 8p-(21 – 3p)
1(-8Pb – 3Pm) = (7)x1 0 = -4 + 8P + -21 + 3P
-8Pb – 3Pm = 7____________(4) 0= -25 + 11P
Elimination method: 25 = 11P
Now eliminate eq (3) from eq (4) 25/11 = p
8Pb – 3Pm-(8Pb - 56 Pm)= 7-(-152) Now putting the value of p in eq 1 & 2
8Pb – 3Pm-8Pb +56 Pm = 7 + 152 Qd = 21 – 3p Qs = -4 + 8p
53 Pm = 159 Qd = 21- (3)25/11 Qs = -4 + 8(25/11)
Pm = 159/53 1 1
Qd = (231 − 75) Qs = (-44 + 200)
11 11
Pm = 3 1 1
Now putting the value of Pm in eq 1: Qd = (156) Qs = (156)
11 11
-8Pb – 3Pm = 7
-8Pb – 3(3) = 7
-8Pb – 9 = 7
8Pb = 9 + 7
Pb = 16/8 1 1
Solution set: (Qd = (156), Qs = (156))
11 11
Pb = 2
Solution set: ( Pb = 2 , Pm = 3)

Qd = 100-2p _________(1)
Qs = 3p-50 __________(2)
Solution:
Qd = Qs
100-2p=3p-50
100 + 50 = 3P + 2p
150 = 5P
150/5 = P
30 = P
Now putting the value of p in eq 1 & 2
Qd = 100 – 2P Qs = 3P – 50
Qd = 100 – 2(30) Qs = 3(30)-50
Qd = 100 – 60 Qs = 90 – 50
Qd=40 Qs =40

if Rs 5 tax is applied on the firm:

Qs = 3(p-5) -50
Qs =3p – 15 – 50
Qs =3P – 65____(A)
Qd = Qs
100-2P= 3P – 65
100 + 65 = 3P + 2P
165 = 5P
165/5= P
33 = p
Now putting the P =33 in eq (1)
Qd = 100-2p
Qd= 100 – 2(33)
Qd= 100- 66
Qd= 44
Now putting p=33 in eq (A)
Qs =3P – 65
 Qs =3(33) – 65
Qs =99-65
Qs =34
If Rs 5 tax is composed on consumers:
Qd = 100 – 2(P + 5)
Qd = 100 – 2P- 10
Qd = 90 – 2P______(B)
Qd = Qs
90 – 2P=3P – 50
90 + 50 = 3P + 2P
140 = 5P
140 /5 = p
28= P
Now putting the value of p in eq (B)
Qd = 90 – 2(28)
Qd =90 – 56
Qd= 34

If Rs 5 tax applied on both consumers and firm

Qd of eq A = Qs of eq B
90 – 2P= 3P – 65
90 + 65 = 3P + 2P
155 = 5P
155/5= P
31 = P
Now putting the value of P in eq A & B
Qd = 90 – 2P Qs =3P – 65
Qd = 90 – 2(31) Qs =3(31)– 65
Qd = 90 – 62 Qs =93 – 65
Qd = 28 Qs =28

______________________________________________________________________________________
Qs = 6p -10 __________(2)
Solution:
Qd = Qs
51- 3p = 6P -10
51 + 10 = 6P + 3P
61= 9p
61/9=P
Now putting the value of p in eq 1 & 2
Qd = 51 – 3p Qs = 6P – 10
Qd = 51- (3)(61/9) Qs = 6(61/9) -10
Qd = 51 – 61/3 366−90
Qs = 9
153−61
Qd= 3 276
Qs = 9
Qd= 92/3 Qs= 92/3

3x – 4y = 13 ________(A) Qd = 30-2p _________(1)

2x + 3y = 3 Qs = 5P - 6 __________(2)
 Solution: Solution:
Multiply eq (A) by 2 and eq (B) by 3 Qd = Qs
3x(2x + 3y)= 3x3 ; 2x (3x – 4y) = 13 x 2 30-2p=5P – 6
6x + 9y = 9 ___(1) ; 6x – 8y = 26 _______(2) 30 + 6 = 5P + 2P
Elimination method: 36 = 7P
Now eliminate eq 1 from eq 2 P = 36/7
6x – 8y-(6x + 9y) = 26 – 9 Now putting the value of p in eq 1 &2
6x – 8y-6x - 9y = 17 Qd = 30-2p Qs = 5P – 6
-17y = 17 36 Qs = 5(36/7) – 6
Qd = 30-2( 7 )
Y = -1 180
72
Qd = 30-( ) Qs = 7 − 6
Now putting the value of y in eq 1 7 180−42
3x – 4y = 13 Qd = (
210−72
) Qs = 7
7 138
3x – 4(-1) = 13 Qd
138
=( 7 ) Qs = 7
3x + 4 = 13 Qs =19.71
3x = 13- 4 Qd = 19. 71
X= 9/3 →x= 3
Solution set : ( x= 3, y= -1 )
6x2 – 11x +3 = 0 2x ( x+6) + 5 = 0
Solution: Solution set:
Factorization method: 2x2 + 12x + 5= 0
6X2- 2x – 9x +3 = 0 Using quadratic formula:
2x (3 x-1) -3( 3x -1 ) = 0 −12 ± √(12)2 − 4(2)(5)
(3x-1 )(2x-1) = 0 𝑥=
2(2)
3x-1 = 0 2x – 1 = 0 −12 ± √144 − 40
3x = 1 2x= 1 𝑥=
(4)
x= 1/ 3 x= 1/2
−𝟏𝟐±√𝟏𝟎𝟒
Solution set ; { x= 1/3, ½ } 𝒙= Answer
𝟒

x2 + 2x -1 = y
Solution:
X= -3, -2, -1, 0, 1, 2, 3
X= -3 X= -2 X= -1 X= 0
(3)2-+2 (-3) -1 = y (-2)2+2 (-2) -1 = y (-1)2+ 2 (-1) -1 = y (0)2+2 (0) -1 = y
(9) - 6 -1 = y (4) - 4 -1 = y (1)- 2 -1 = y (0)- 0 -1 = y
9 -7= y 4 - 4 -1 = y -2 = y 0-0-1 = y
2= y -1=y -1= y
X= 1 x= 2 X= 3
(1)2+2 (1) -1 = y (2)2+2 (2) -1 = y (3)2+ 2 (3) -1 = y
(1) + 2 -1 = y (4)+2 (2) -1 = y (9) + 6 -1 = y
1 +2 -1 = y 4+ 4 -1 = y 9 +5= y
2=y 7= y 14= y
 Y-Values
8

3
Y-Values
2

0
-4 -3 -2 -1 0 1 2 3
-1

-2

-3

QUADRATIC EQUATIONS:
Yx2 + bx + c = 0
0= 2x2 +-7x + 6 Qd = 3- p2
Solution: Qs = 6p -4
Factorization method Solution:
2x2 -7x + 6=0 Qd = Qs
2
2x -4x – 3x +6 = 0 3- p2 = 6p -4
2x ( x-2) -3( x -2)=0 p2 = 6p -4-3
(x-2) (2x -3) =0 p2 = 6p -7
2
x-2 = 0 2x-3 = 0 p -6p + 7 = 0
x-2= 0 2x= 3 let: a= 1 , b= -6 , c=- 7
x= 2 X= 3/2 −(−6) ± √−62 − 4(1)(7)
Using quadratic formula: 𝑝=
2(1)
Let: a=2, b= -7, c= 6 (6) ± √36 + (28)
−(−7) ± √−72 − 4(2)(6) 𝑝=
𝑥= 2
2(2) (6) ± √64
7 ± √49 − 48 x=
2
𝑥= (6) ± 8
2(2) p=
7 ± √(1) 2
𝑥= (6) + 8 (6) − 8
4 p= p=
7±1 2 2
𝑥= 14 −2
4 p= p=
7+1 7−1 2 2
X= 4 X= 4 p= 7 p= 1
 X= 8/4 X= 6/4 Now putting the value of p=7, p=1 for Qd
X= 2 X= 3/2 Qd = 3- p2 Qd = 3- p2
2
Solution set: {2, 3/2} Qd = 3- (7) Qd = 3- (1)2
Qd = 3- 49 Qd = 3- (1)
Qd = -46 Qd = 2

Now putting the value of p=7, p=1 for Qs

Qs = 6p -4 Qs = 6p -4
Qs = 6(7) -4 Qs = 6(1) -4
Qs = 42-7 Qs = 6-4
Qs = 35 Qs = 2

EXPONENTIAL FUNCTION
Definition: This is a function in which independent variable has been representing in terms of
power.
Simple exponential equation: y = 𝑒 𝑥
y = 2𝑥
x= -2, -1, 0, 1, 2…….
Natural exponential equation: y = 𝑒 𝑥
e= 2.17
Rules:
a>1 Increasing
(1/2,1/3) 0<a<1 Decreasing
Properties
 ax . a y= ax+y
 1/ax = a-x
 ax/ a y = ax-y
 (ax)y = (axy)
 ax . bx= (ab)x
 ax /bx = (a/b)x
a4x . a5y a2x/ a 3x (ax)4y
solution: Solution Solution
a4x . a5y a2x.a -3x (a)4xy
a4x+5y a2x-3x (a)4xy answer
4x+5y -x
a answer a answer
LOGARITHIM FUNCTION
Log e = n
Log a= simple logarithim
ay = x → y= logax
(10)2= 100 → l0g10= 100 = 2
PROPERTIES
 xy x
loga = loga + loga y

 logax/y= logax - logay

 logaxn= n logax
 1

𝑛
loga √𝑥 = 𝑛 logax
RULES OF NATURAL LOGARITHUM

 eln (a) = a
 lnea= a
 ln e= 1
 ln 1 = 0
Y= (6.25) (80) = 50,000 Y= 200/50 = 4
Solution: Solution:
Taking log on both sides Taking log on both sides
Log y = log(6.25x80) Log y = log(200/5)
Using 1st law of log Using 2nd law of log
Log y = log 6.25 + log 80 Log y = log200-log 5
Log y =2.79 + 1.903 Log y=2.301-1.698
Log y= 4. 698 Log y=0.603
Y= anti-log ( 4.698) Y= Anti-log ( 0.603)
Y= 49.88 Y= 4.0

𝟑
𝒚 = √𝟐𝟕 5ex-2= 120 6ln x= 19.2
Solution: Solution: Solution
Taking log on both sides ex-2= 120/5 lnx= 19.2/6
Log y = log(27) 1/3 ex-2= 24 lnx = 3.2
Using log 3rd law taking log on both sides elnx = e3.2
Log y = 1/3 (log 27) log ex-2= log ( 24) x= 24.53 answer
Log y = 1/3(1.431) using 3rd law of log
Log y = 2.93 (x+2) log e= 3.17
Y= Anti-log ( 2.93) Putting the value of log e
Y= 0.47 Answer (x+2) (1)= 3.17
(x+2) = 3.17
x= 3.17 - 2
x= 1.17 answer
PRODUCTIONAL FUNCTION
Q= KL
K= capital , L= labour
 4

3
Y-
2
Value of Q is on the x-axis Valu
Fixed cost + variable cost = total cost 1 es
F.C + V.C = T.C 0
0 5

FOUR FACTORS OF PRODUCTION

 Land → rent
 Labour → wages
 Capital → revenue
 Organization → enterprenur
0.4 0.5
Q = 1000k L Log 2 x= 4
Solution: Solution :
Taking log on the both sides 24= x
Log Q= log(1000k0.4 L 0.5) 16 = x Answer
Log Q= log(1000)+log(k0.4)+log( L 0.5) _______________
Using 3rd law of lagarithim ln (x+1) = 7
Log Q= log(1000k)+0.4log k+0.5logL solution:
Log Q= 3 + 0.4(1.903) + 0.5( 2.34) taking e as a base
Log Q= 4.93 e ln(x+1) = e7
Q = Anti –log ( 4.93 ) (x+1) = e7
Q = 85113.80 answer X= e7 – 1
X=1095.633Answer
Log x49 = 2
Solution:
X2= 49
X2= 72
X= 7 Answer
e5x = 4
solution:
taking ln on both sides
ln e5x= ln 4
5x= 1.384
x= 1.384/5
x= 0.2772 Answer

COMPOUND AMOUNT AND COMPOUND INTEREST

Definition: Exponent function are involved in compound interest where by the interest earned by
the invested amount of money or principle amount is reinvested so that it also earns the interest
1-e the interest is converted or compound or the principle.
Example:
Suppose that $100 is invested at the rate of 5% compound annually. At the end of the value of
investment is the original principle $ 100, plus the interest on the principle [$105(0.05)]n
100 + 100)0.05 = $105
For the second year:
105 + 105( 0.05) = $110.25
Thus the each year the principle increases by 5%. The $110.25 represent the original principle, plus
all receive interest, it is called the accumulated or compound amount.
5000 for 20 years at 5% compound annually: 1000 interest for 10 year at 6% compounded
Solution: annually
P = 5000 Solution:
i= 5% → 0.05 P= $1000
Using formula: i=6% →0.06
S = p ( 1 + i) n using formula
S= 5000( 1 + 0.05) 20 S = p ( 1 + i) n
S= 5000( 1.05) 20 S = 1000( 1 + 0.06) 10
S= 13266.48 S= $1790
Compound interest = compound amount – orig Compound interest = compound amount – orig
Compound interest = 13266.48 - 5000 Compound interest = 1790- 1000
Compound interest= 8266.48 Compound interest = 790

20,000 invested for 5 years at 3% compounded $700 for 15 years at 7% compound

annually. semiannually.
P= 20, 000 Solution:
i= 3% → 0.03 P= $700
using formula i= 7 % → 0.07
S = p ( 1 + i) n using formula:
S= 20000( 1 + 0.03)5 S = p ( 1 + i/m) nxm
S= $23185.48 S = 700 ( 1 + 0.07/2) 15x2
Compound interest = compound amount – orig S= $164.75
Compound interest =$23185.48 -20, 000 Compound interest = compound amount – orig
Compound interest=3185.98 Compound interest =$164.75 - $700
Compound interest=1264.75

$ 4000 for 12 years at 7.5% compounded $6000invested for 2years at 8% compounded

semiannually quarterly
Solution: Solution .
P= $4000 P= $6000
 i= 7.5% →0.075 i= 8% → 0.08
using formula: using formula:
S = p ( 1 + i/m) nxm S = p ( 1 + i/m) nxm
S = 4000 ( 1 + 0.075/2) 12x2 S= 6000( 1 + 0.08/4)2x4
S= 4000(2.4194) S= 6000( 1.1716)
S= $9677.75 S= 7029.95

$ 5000 for 2 years at 9% compounded

monthly.
solution
P= $5000
i= 9% →0.09
using formula:
S = p ( 1 + i/m) nxm
S = 5000 ( 1 + 0.09/12) 2x12
s= 5000 ( 1.1964)24
s= 5982.06

$ 8000 for 3years at 6% compounded monthly.

Daily Annually Qauartaly
P= $8000 P= $8000 P=$8000
i= 6% →0.06 i=6% →0.06 i= 6 % → 0.07
using formula: using formula using formula:
nxm
S = p ( 1 + i/m) S = p ( 1 + i) n S = p ( 1 + i/m) nxm
3x365
S = 8000 ( 1 + 0.06/365) S = 8000( 1 + 0.06) 3 S = 8000 ( 1 + 0.06/4) 3x4
s= 8000 (1.1971 )1095 S= 8000(1.1910)3 S=8000(1.1015)12
s= 9577.59 s= 9528.12 S= 9564.94

$900 is placed in saving if account earn interest 900 at A certificate is deposit is

account that earns interest at 4.5%annually after 5 year. purschased for $6500 held for
4.5% semiannually. Solution: 3 years if the it earns 2%
Solution: P= $900 compound quarterly.
P= $900 i=6% →0.045 P= $600
i= 4.5% →0.045 using formula i= 4.5% →0.02
using formula: S = p ( 1 + i) n using formula:
nxm
S = p ( 1 + i/m) S = 8000( 1 + 0.045) 5 S = p ( 1 + 0.02/4) 3x4
S = 900 ( 1 + 0.045/2) 5x2 S= 8000(1.246)5 S = 6500 ( 1 + 0.02/4) 3x4
10
S= 900(1.0255) s= 1121.56 S= 6900.90
S= 1124.28 Com interest = Camount – orig Com interest = 6900.90 -6500
Com interest = 1124.28-900 Com interest =$1121.56 - 900 Com interest = 400.90
Com interest = 224.28 Compound interest=221.56
$500 at 5% for 6 years compounded.
Annually Continuously
P= $500 S= Pein
 i=6% →0.05 S= 100e0.05x6
using formula S= 100(2.718)0.3
S = p ( 1 + i) n S= 100x1.3498
S = 1000( 1 + 0.05) 6 S= 134.98
S= $134.01 Com interest = Camount – orig
Com interest = Camount – orig Com interest =$1121.56 - 900
Com interest =$1121.56 - 900 Compound interest=221.56
Compound interest=221.56

S= 100(e)0.3
Solution:
Taking log on both sides
lnS= ln 100(e)0.3
lnS= ln 100+ln(e)0.3
lnS= ln 100+ln(e)0.e
lnS= 4.6015+ 0.3
ln S= 4.905
s= Anti-ln ( 4.905)
s= 80352.61

$100 at 10% for 2 year compound.

Annually Quarterly Continuously
P= $100 P= $100 P= $100
i=10% →0.10 i=10% →0.10 i=10% →0.10
using formula using formula: using formula:
S = p ( 1 + i) n S = p ( 1 + i/m) nxm s= pein
S = 100( 1 + 0.1) 2 S = 100 ( 1 + 0.1/4) 2x4 s= 100e0.1x2
S= 100(1.1)2 S= 100(1.1)8 s= 100e0.2
S= 121 S= 100(1.2184) s= 100(2.718)0.2
S= 121.84 s= 122.13

PERMUTATION AND FACTORIAL

FACTORIAL:
Definition ;Let n be a positive integers than the product n(n-1)(n-2)…… 3, 2, 1=n!
Example :
1!= 1
2!= 2.1= 2
3!= 3.2.1= 6
4!= 4.3.2.1= 24
(n+ 2) = (n+2)(n+ 1) (n-1) (n-2)

PERMUTATION:
Definition : permutation means that each if possible ways in which a set or number of things can be
ordered or arrange.
Example: A, B, C
Arangment: AB, AC, BA, BC, CA, CB
BASIC PRINCIPLES OF ACCOUNTING
Suppose A, B are two events. First event A can occur in P different ways. B occur in q different ways.
The product of two event is p.q.
Example: A.B.C
A B C
3 2 1
Defination: an ordered selection of of objects without repitation taken from n distinct is called a
permutation. Of n objects take r at a time the number of such permutation is denoted by npr.

A, B, C, D, E
n=20
r= 4
𝑛!
npr==
(𝑛−𝑟)!
5!
npr=
(5−3)!
5!
npr= (2)!
npr= 120/2
npr=60
6p3=120 6p6=720 6p3. 6p4=120x24 8p5/5p2=336
2880
Q: if the club has 20 members . the officers of the president, vice resident, secretary treasures are
to be filled and no members may serve in more than 1 office. How many different states are
possible.
n=20
r= 4
20p4= 116280
AB, C, B,C PANAMA
Solution: Solution:
n=5 n=5
A= 2! A= 3!
C= 2! N= 1!
B= 1! M= 1!
𝟓! 𝟓!
npr=𝟐!𝟐!𝟏! npr=𝟑!𝟏!𝟏!

npr =120/4 npr =120/6

npr =30 npr =20

MISSISSIPI PAKISTAN
Solution Solution:
 n=10 A= 2!
S= 4! P=1!
I= 4! K=1!
P= 1! I= 1!
M= 1! S=1!
𝟏𝟎! T=1!
npr =𝟒!𝟒!𝟏!𝟏!
N=1!
𝟖!
npr r= 362880/576 npr =𝟐!1!1!1!1!1!1!

npr=6300 npr= 40320/576

npr= 2016

SIMPLE INTEREST:
Definition: it is a quick and easy method of calculating the interest charged on a loan. It is
determined by multiplying the daily interest rate by the principle and by the number of days that
ellapse between payment.
Lander or creditor:
It is the person or institution that makes the fund available to those who need it.
Barrower: It is the power or ins.
Factors: There are three factor.
 Principal
 Interest rate
 Time or term of the investment
Formula:
I= Pit
P= principal I= interest t= term i= rate
Present values:
The principal “P” that must so invested at the periodic rate of “I”/”r”(interest rate ) periods so that
the compound amount “S” in given by
S= (1+ i)n
S= P(1+ i) n
Solution:
s= pein
𝒔
p= (𝟏+𝒊)𝒏
s= pein
p= s/ ein
-in
p= se (present value)
 How much interest is changed when $ 10,000 Find the present value of $1000 due to after 3
is borrowed for 2 years with an interest rate of years if the interest rate is 9% compound
3% monthly.
Solution: Solution:
I= Pit P= $1000
I= (10000)(0.03)(2) n= 3
I= $600 i=0.09

COMBINATION
Definition: The selection of r object without regard to the order and without repeating selecting
from the n distinct of object is called the combination of objects taken r at a time. The number of
such combination is denoted by ncr.
6c4 100c100
Solution: Solution:
6! 100!
6c4 = (6−4)!4! 100c100 = (100−100)!100!

6! 100!
6c4 = (2)!4! 100c100 = (0)!100!
100c100 = 1
6c4 = 720/48
6c4 = 15

5p3. 4c2 4p2- 5c3

Solution: Solution:
=60.6 =12 -10
= 360 =2

100c99
Solution:
100!
100c99 = (100−99)!99!

100!
100c100 = (1)!199!

100!
100c100 = 99!

100!
100c100 = 99!
100c100 = 100
 How many ways the 5 number comity be In a horse race a horse is said to finish in the
formed from a group of 19 people. money if it finishes in first, second or third
Solution: place for an eight horse race in how many
19! ways can be the horse finishes in the money
19C5= = (19−5)!5!
Solution:
19! 8c3
19c5 = (4)!5! Solution:
1.2164𝑥 1017 8!
19c5 = 18.7178𝑥 1017𝑥 (𝟏𝟐𝟎) 8c3 = (8−3)!3!

1.2164𝑥 1017−10 6!
19c5 = 1046.136 8c3 = (5)!3!
19c5 = 11628 6c4 = 40320/720
6c4 = 56

(a+b)5 (q+p)4
Solution: Solution:
=5c0 . a5-0 b0+5c1 . a5-1 b1+5c2 . a5-2 b2+5c3 . a5-3 =4c0 . q4-0 p0+4c1 . p4-1 q1+4c2 . p4-2 q2+4c3 . p4-3
b3+5c4 . a5-4 b4+5c5 . a5-5 b5 q3+4c4 . p4-4 q4
= a5 + a4 b1+ a3 b2+ a2 b3+ a b4+ b5 = q4 + q3 p1+ q2 p2+ q3 p1+ p4

(x+1)5 (3x-y)3
Solution: Solution:
=5c0 . x5-0 10+5c1 . x5-1 11+5c2 . x5-2 12+5c3 . x5-3 =3c0 . x3-0 y0+3c1 . x3-1 y1+3c2 . x3-2 y2+3c3 . x3-3 y3
13+5c4 . x5-4 14+5c5 . x5-5 15 =3x3 + 9 x2 y+ 9xy2+3y3

\\BIONOMIAL THEOREM
Definition: it is used to expand (a + b) n where n is a positive integer.
(𝑎 + 𝑏)𝑛 = ∑𝑛𝑟=0 ncr 𝑏𝑟 𝑎𝑛−𝑟
Example:
(a+b) =2c0 . a b +2c1 . a2-1 b1+2c2 . a2-2 b2
2 2-0 0

=a2 + 2 ab+ by2

BIONOMIAL SERIES (MACLURIN SERIES)

Definition: If “k “ is the real number and /x/ <1 then.
𝑘𝑥 𝑘(𝑘 − 1)𝑥 2
(1 + 𝑥)𝑘 = 1 + + +⋯
1! 2!
(1 + x2)-1 (1 + x)2
(−1)𝑥 2 (−1)(−1 − 1)𝑥 2
2 (2)𝑥 2(2 − 1)𝑥 2
(1 + 𝑥)𝑘 = 1 + + (1 + 𝑥)𝑘 = 1 + + +⋯
1! 2! 1! 2!
2
+. (2)(1)𝑥
2 (1 + 𝑥)𝑘 = 1 + 2𝑥 + +⋯
𝑘
(−1)(−2)𝑥 2!
(1 + 𝑥) = 1 − 𝑥 + +⋯ 2𝑥 2
2! (1 + 𝑥)𝑘
= 1 + 2𝑥 + +⋯
𝑘
2𝑥 2 2!
(1 + 𝑥) = 1 − 𝑥 + +⋯
2!
(1 + 𝑥)𝑘 = 1 + 𝑥 + 𝑥 2 + ⋯
(1 + 𝑥)𝑘 = 1 − 𝑥 + 2𝑥 2 + ⋯