sLa37677_fm_i-xvi 8/16/07 4:40 PM Page v Dedication Just for Matthew, Mia, Samuel, Gracie, Mabel, and Maggie Love PaPa Jeff sLa37677_fm_i-xvi 8/16/07 4:40 PM Page vii Note to Students ROADMAP TO How to use this book and the Total SlaterLearning System. SUCCESS Step 1: Each chapterbroken down into Learning Units. You should read one learning unit at a time. How do I know if I understand it? • Try the practice quiz. All the worked out solutions are provided. If you still have ques- tions, watch the author on your DVD (comes with your text) and work each problem out. • Need more practice? Try the extra practice quiz provided. Check figures are at the end of the chapter. Your instructor has worked out solutions if needed. • Go on to next Learning Unit in chapter. Step 2: Review the “ChapterOrganizer” at the end of the chapter. How do I know if I understand it? • Cover over the second or third column and see if you can explain the key points or the examples. Step 3: Do assigned problems at the end of the chapter (orAppendix A). These may include discussion questions, drill, word problems, challenge problems, video cases, as well as projects from the Business Math Scrapbook and Kiplinger’s magazine. Can I check my homework? • Appendix B has check figures for all the odd-numbered problems. Step 4: Take the Summary Practice Test. Can I check my progress? • Appendix B has check figures for all problems. What do I do if I do not match check figures? • Review the video tutorial on the student DVD—the author works out each problem. To aid you in studying the book, I have developed the following color code: Blue:Movement, cancellations, steps to solve, arrows, blueprints Gold:Formulas and steps Green:Tables and forms Red:Key items we are solving for If you have difficulty with any text examples, pay special attention to the red and the blue. These will help remind you what you are looking for as well as what the procedures are. Note to Students vii sLa37677_fm.qxd 3/11/08 4:04 PM Page viii viii Note to Students FEATURES Features students have told me have helped them the most. Blueprint Aid Boxes For the first eight chapters (not in Chapter 4), blueprint aid boxes are available to help you map out a plan to solve a word problem. I know that often the hardest thing to do in solving word problems is where to start. Use the blueprint as a model to get started. Business Math Handbook This reference guide contains all the tables found in the text. It makes homework,exams,etc. easier to deal with than flipping back and forth through the text. Chapter Organizer At the end of each chapter is a quick reference guide called the Chapter Organizer and Study Guide. Key points,formulas,and examples are provided. A list of vocabulary terms is also in- cluded, as well as Check Figures for Extra Practice Quizzes. All have page references. (A complete glossary is found at the end of the text.) Think of the chapter organizer as your set of notes and use it as a reference when doing homework problems,and to review before exams. DVD-ROM The DVD packaged with the text includes practice quizzes, links to Web sites listed in the Business Math Internet Resource Guide, the Excel®templates,PowerPoint,videocases,and tutorial videos—which cover all the Learning Unit Practice Quizzes and Summary Practice DVD Tests. The Business Math Visit the site at www.mhhe.com/slater9eand find the Internet Resource Guide with hot links, Web site tutorials,practice quizzes,and other study materials useful for the course. Video Cases There are seven video cases applying business math concepts to real companies such as Hotel Monaco,Louisville Slugger,American President Lines,Washburn Guitars,Online Banking, Buycostume.com, and Federal Signal Corporation. Video clips are included on the student DVD. Some background case information and assignment problems incorporating informa- tion on the companies are included at the end of Chapters 6,7,8,9,11,16,and 21. Compounding/Present A set of color overlays are inserted in Chapter 13. These color graphics are intended to demon- Value Overlays strate for students the concepts of present value and future value and,even more important,the basic relationship between the two. Business Math At the end of each chapter you will find clippings from The Wall Street Journaland various Scrapbook other publications. These articles will give you a chance to use the theory pro vided in the chapter to apply to the real world. It allows you to put your math skills to work. Group activity: Personal In each chapter you can debate a business math issue based on a Kiplinger’s Personal Finance Finance, a Kiplinger magazine article that is presented. This is great for critical thinking,as well as improving your Approach writing skills. Spreadsheet Templates Excel®templates are available for selected end-of-chapter problems. You can run these tem- plates as is or enter your own data. The templates also include an interest table feature that en- ables you to input any percentage rate and any terms. The program will then generate table values for you. Cumulative Reviews At the end of Chapters 8 and 13 are w ord problems that test your retention of b usiness math concepts and procedures. Check figures for all cumulative review problems are in Appendix B. sLa37677_fm_i-xvi 8/16/07 4:40 PM Page ix Acknowledgments Academic Experts, Contributors Anthony Aiken Doug Dorsey Ken Koerber Dana Richardson Justin Barclay Acie Earl Jennifer Lopez Denver Riffe Cheryl Bartlett Rick Elder Bruce MacLean David Risch Ben Bean Marsha Faircloth Lynda Mattes Joel Sacramento George Bernard Tony Franco Jon Matthews Naim Saiti Don Boyer Bob Grenowski Loretta McAdam Ellen Sawyer Gilbert Cohen Victor Hall Jean McArthur Tim Samolis Laura Coliton Frank Harber Sharon Meyer Marguerite Savage Judy Connell James Hardman Norma Montague Warren Smock Ronald Cooley Helen Harris Christine Moreno Ray Sparks Kathleen Crall Ron Holm Fran Okoren William Tusang Patrick Cunningham William Hubert Roy Peterson Jennifer Wilbanks John Davis Christy Isakson Cindy Phipps Andrea Williams Tamra Davis Elizabeth Klooster Anthony Ponder Beryl Wright James DeMeuse Libby Kurtz Joseph Reihling Denise Wooten Company/Applications Chapter1 Chapter4 USAToday, The Wall Street Journal— Portion, base, rate Home Depot—Problem solving Bank of America—Personal finance The New York Times, The Washington Girl Scouts—Reading, writing, and Continental, Amazon—E-checks rounding numbers J.P. Morgan Chase—Online banking Post—Portion, base, rate McDonald’s—Rounding eBay—Online banking Chicago Tribune, Houston Chronicle— Portion, base, rate Tootsie Roll—Rounding all the way PayPal—Online banking UPS—Portion, base, rate Toyota, Honda, Saturn—Rounding PNC Financial—Online banking Hershey—Subtraction of Visa, Mastercard—Electronic Chapter7 whole numbers bill paying Google, Overstock, AOL—Online Chapter2 Volkswagon—Banking application retailers Randall Scott Cycle, Condor Golf— M&M’s/Mars—Fractions Chapter5 Discounts and multiplication Calvin Klein, Burberry—Unknown Lighting Galleries of Sarasota— Wal-Mart—Type of fractions Stanley Consultants—Workforce Discounts TiVo—Subraction of fractions Snickers—Solving for the Unknown DHL, UPS—Freight M&M’s/Mars—Multiplying and Disney—Solving for the Unknown FedEx—Freight dividing fractions American Quarter Coach—Personal Comcast, AT&T, Time Warner— Target, MinuteClinic, RediClinic— finance Personal finance Healthcare Yacht Smart—Personal finance Exotic Car Share—Fractional Chapter8 ownership Chapter6 Disney, Payless Shoe Source—Licensing Chapter3 Capital One Financial—Cost of ATMs Levi-Strauss, Target—Markup McDonald’s—Currency application Ford—Percents H&M, GAP, French Connection, Dell, Apple, Gateway—Percents Wal-Mart—Sourcing M&M’s/Mars—Fractional decimal conversion HP, NEC, Sony, IBM—Percents John Hancock—Long-term care Apple—Decimal applications in M&M’s/Mars—Percent, percent Bennigan’s—Markup increase and decrease foreign currency Chapter9 Kellogg—Converting decimals to Cingular, T-Mobile—Cost of phone calls percents Delta Airlines—Paycuts Burberry, Tiffany—Currency Wal-Mart—Percent increase, decrease Fed Express—Independent contractors application Acknowledgments ix sLa37677_fm_i-xvi 8/16/07 4:40 PM Page x x Acknowledgments Chapter10 Chapter15 Chapter20 Federal Deposit Insurance Company— Bank for International Settlements— Mavlife Financial Co.—Long-term care Liability Home price appreciation Home Depot, Lowes—Renting a truck J.P. Morgan Chase, Citigroup—Late Credit Suisse First Boston—Monthly AccuQuote.com—Cost of insurance Payment charges payments Allstate, Amica Mutual—Cost of Bank of America—Late payment charges Lending Tree, Inc.—Cost of refinancing insurance Data Trac—Cheaper loans Chapter16 Progressive, Youdecide.com—Cost of Digital Equipment Corp.—Cheaper loans insurance Coach, Inc.—Net income Pentagon Federal Credit Union— Kodak—Accounting errors Chapter21 Cheaper loans H. J. Heinz Co.—Profit/Sales CCH Inc.—Sale of stocks Chapter11 L. G. Electronics, Phillips Electronics— Home Depot—Stock quotations Bank of Internet, Citibank, E-Loan, Impairment Goodyear—Bonds Prosper.com—Borrowing online Samsung—Impairment Putnam Investments—Mutual funds Saks Inc.—Notes Wal-Mart, Target—Profit margin Google—PE ratio Small Business Administration—Line Chapter17 Viacom Inc., CBS Corporation— of credit Corporate strategy U.S. Treasury—Buying treasuries online Land Rover—Depreciation Kelley Blue Book—Resale value Chapter22 Chapter12 BMWof North America—Tax breaks American Institute of Certified Public American Express, Bank of America— Accountants—Median Saving cash Chapter18 Federal Reserve—Retirement Bankrate.com—Interest rates Wal-Mart—Inventory identification Wal-Mart, Sam’s Club—Live graphs, ODWLogistics, Inc.—Outsourcing pie charts Chapter13 Ryerson Tull—LIFO, FIFO Apple, Microsoft—Corporate Dunkin’Donuts—Investing your savings Global Sources Ltd.—Just-in-time reporting State Lotteries—Annuities inventory Target, Kmart, Costco—Number D3 Financial Counselors—Roth reporting Chapter19 Chapter14 Exxon Mobil, General Motors, GE, Hillerich & Bradsby Co.—Bartering Ford—Number reporting Land Rover—APR Deloitte & Touche USA—Bartering Boston Globe—Monthly payments sLa37677_fm_i-xvi 8/21/07 10:48 PM Page xi Contents Kiplinger’s Personal FinanceMagazine Subscription Form xv CHAPTER 1 Whole Numbers; How to Dissect and Solve Word Problems 1 LU 1–1 Reading, Writing, and Rounding Whole Numbers 2 LU 1–2 Adding and Subtracting Whole Numbers 8 LU 1–3 Multiplying and Dividing Whole Numbers 12 CHAPTER 2 Fractions 33 LU 2–1 Types of Fractions and Conversion Procedures 35 LU 2–2 Adding and Subtracting Fractions 40 LU 2–3 Multiplying and Dividing Fractions 46 CHAPTER 3 Decimals 64 LU 3–1 Rounding Decimals; Fraction and Decimal Conversions 65 LU 3–2 Adding, Subtracting, Multiplying, and Dividing Decimals 71 CHAPTER 4 Banking 88 LU 4–1 The Checking Account 89 LU 4–2 Bank Statement and Reconciliation Process; Trends in Online Banking 93 CHAPTER 5 Solving for the Unknown: A How-to Approach for Solving Equations 113 LU 5–1 Solving Equations for the Unknown 114 LU 5–2 Solving Word Problems for the Unknown 120 CHAPTER 6 Percents and Their Applications 137 LU 6–1 Conversions 138 LU 6–2 Application of Percents—Portion Formula 144 Video Case: American President Lines 169 CHAPTER 7 Discounts: Trade and Cash 170 LU 7–1 Trade Discounts—Single and Chain (Includes Discussion of Freight) 171 LU 7–2 Cash Discounts, Credit Terms, and Partial Payments 179 Video Case: Hillerich & Bradsby Company “Louisville Slugger” 202 CHAPTER 8 Markups and Markdowns; Perishables and Breakeven Analysis 203 LU 8–1 Markups Based on Cost (100%) 205 LU 8–2 Markups Based on Selling Price (100%) 210 LU 8–3 Markdowns and Perishables 216 LU 8–4 Breakeven Analysis 219 Video Case: Hotel Monaco Chicago 233 Cumulative Review: A Word Problem Approach—Chapters 6, 7, 8 234 CHAPTER 9 Payroll 235 LU 9–1 Calculating Various Types of Employees’ Gross Pay 236 LU 9–2 Computing Payroll Deductions for Employees’ Pay; Employers’ Responsibilities 240 Video Case: Washburn Guitars 257 Contents xi sLa37677_fm_i-xvi 8/21/07 10:48 PM Page xii xii Contents CHAPTER 10 Simple Interest 258 LU 10–1 Calculation of Simple Interest and Maturity Value 259 LU 10–2 Finding Unknown in Simple Interest Formula 262 LU 10–3 U.S. Rule—Making Partial Note Payments before Due Date 264 CHAPTER 11 Promissory Notes, Simple Discount Notes, and the Discount Process 278 LU 11–1 Structure of Promissory Notes; the Simple Discount Note 279 LU 11–2 Discounting an Interest-Bearing Note before Maturity 282 Video Case: Online Banking 294 CHAPTER 12 Compound Interest and Present Value 295 LU 12–1 Compound Interest (Future Value)—The Big Picture 296 LU 12–2 Present Value—The Big Picture 303 CHAPTER 13 Annuities and Sinking Funds 316 LU 13–1 Annuities: Ordinary Annuity and Annuity Due (Find Future Value) 317 LU 13–2 Present Value of an Ordinary Annuity (Find Present Value) 323 LU 13–3 Sinking Funds (Find Periodic Payments) 326 Cumulative Review: A Word Problem Approach—Chapters 10, 11, 12, 13 339 CHAPTER 14 Installment Buying, Rule of 78, and Revolving Charge Credit Cards 341 LU 14–1 Cost of Installment Buying 342 LU 14–2 Paying Off Installment Loans before Due Date 347 LU 14–3 Revolving Charge Credit Cards 350 CHAPTER 15 The Cost of Home Ownership 365 LU 15–1 Types of Mortgages and the Monthly Mortgage Payment 367 LU 15–2 Amortization Schedule—Breaking Down the Monthly Payment 370 CHAPTER 16 How to Read, Analyze, and Interpret Financial Reports 382 LU 16–1 Balance Sheet—Report As of a Particular Date 383 LU 16–2 Income Statement—Report for a Specific Period of Time 389 LU 16–3 Trend and Ratio Analysis 394 Video Case: Buycostumes.com 410 CHAPTER 17 Depreciation 412 LU 17–1 Concept of Depreciation and the Straight-Line Method 413 LU 17–2 Units-of-Production Method 415 LU 17–3 Declining-Balance Method 417 LU 17–4 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS 418 CHAPTER 18 Inventory and Overhead 429 LU 18–1 Assigning Costs to Ending Inventory—Specific Identification; Weighted Average; FIFO; LIFO 431 LU 18–2 Retail Method; Gross Profit Method; Inventory Turnover; Distribution of Overhead 436 sLa37677_fm_i-xvi 8/21/07 10:48 PM Page xiii Contents xiii CHAPTER 19 Sales, Excise, and Property Taxes 453 LU 19–1 Sales and Excise Taxes 454 LU 19–2 Property Tax 456 CHAPTER 20 Life, Fire, and Auto Insurance 466 LU 20–1 Life Insurance 467 LU 20–2 Fire Insurance 472 LU 20–3 Auto Insurance 475 CHAPTER 21 Stocks, Bonds, and Mutual Funds 490 LU 21–1 Stocks 491 LU 21–2 Bonds 495 LU 21–3 Mutual Funds 497 Video Case: Federal Signal Corporation 509 CHAPTER 22 Business Statistics 510 LU 22–1 Mean, Median, and Mode 511 LU 22–2 Frequency Distributions and Graphs 514 LU 22–3 Measures of Dispersion (Optional) 520 APPENDIX A: Additional Homework by Learning Unit A APPENDIX B: Check Figures B APPENDIX C: Glossary C APPENDIX D: Metric System D Index IN sLa37677_fm_i-xvi 8/16/07 4:40 PM Page xiv