Business Mathematics and Statistics
Business Mathematics and Statistics checks speed and accuracy on percentages, interest, averages and dispersion - the arithmetic sitting behind every ratio you will compute in accounting papers.
Rules worth memorising
- Percentage change = (new − old) ÷ old × 100; a rise from 40 to 50 is 25%, not 10%.
- SI = P × R × T ÷ 100. CI = P[(1 + R/100)^T − 1].
- Mean = sum ÷ count. Median = middle value of an ordered list; with an even count, average the two middle values. Mode = most frequent value.
- Standard deviation measures spread around the mean; a low SD signals consistent data.
- An index number compares a current period with a base period set at 100.
Worked example
₹10,000 at 10% for two years: SI = 10,000 × 10 × 2 ÷ 100 = ₹2,000. CI = 10,000 × (1.10)² − 10,000 = 12,100 − 10,000 = ₹2,100. The ₹100 gap is interest earned on the first year's interest. For the data 4, 7, 9, 12, 18 the mean is 10 and the median is 9; for 4, 7, 9, 12 the median is (7 + 9) ÷ 2 = 8.
Traps that cost marks
- Reporting a percentage-point change as a percentage change.
- Forgetting to arrange the data in order before locating the median.
- Mixing simple and compound interest within a single year - in year one they are identical.