Role of Mathematics in Business & Economics

1407 Words Jan 28th, 2013 6 Pages
Role Of Mathematics in Business & Economics

Introduction:
Mathematics have been one of the primary elements of business and economics since ancient times, when farmers had to count the animals in their possession and merchants had to have a clear picture of their goods' value. With the introduction of money as the universal legal tender, all goods acquired a numerical value, making math calculations even more important. Furthermore, in the competitive global market environment of today, businesses have to take advantage of every opportunity for profit, making frequent statistical market analyses a necessity.
Business Mathematics:
Business mathematics is mathematics used by commercial enterprises to record and manage business
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Tax Records
Basic math skills make it easier to file and maintain tax records, a necessity for individuals and businesses alike. And taxes like sales tax, property taxes, unemployment tax and social security taxes must be monitored. Without basic math skills, it is easy to make a mistake; errors in figuring taxes will likely lead to an audit, a complicated procedure, or a loss of significant amounts of revenue.
Payroll
Math is important when dealing with payroll systems. It allows you to calculate percentage raises, figure cost-of-living increases, or calculate how much an employee owes into his or her health savings accounts or insurance premiums.
Other Decisions Math is important when making even general business decisions, like whether to expand into a new branch, whether you can afford to hire another employee, or if you can market a product nationally. Knowledge of basic math makes interest calculations, markups and markdowns, credit lines and mortgage calculations less tedious and time-consuming, saving you and your customers time and money.
The Use of Mathematics in Business & Economics:

The types of math used in economics are primarily algebra, calculus and statistics. Algebra is used to make computations such as total cost and total revenue. Calculus is used to find the derivatives of utility curves, profit maximization curves and growth models. Statistics allows economists to make forecasts