# business and the mathematical formula

One challenge we face on a daily basis in business is calculating decision-making information when we only know part of the information. We may need to know how much we need to determine how changes in our sales will affect our bottom line. If we know our Fixed Costs (FC), our Variable Costs per unit (VCu), our Price per unit (P), and the number of Units (U) sold, then we can use a mathematical equation to determine our Net Income (NI). In this case the formula is:

NI = [U * (P-VCu)] - FC

Find another problem we may need to solve in business and the mathematical formula that represents the solution that a classmate has not already used.

What is the formula and what are the variables?

Why do we need to use this shorthand so much in business?

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#### Solution Preview

In business another very much used formula is on compounding interest on the principle invested for a period of time and number of times compounding interest accrued. Let us see some examples of calculating total compounded amount, as following: (start from simple solution to complex cases)

Example1: If a person invests $P for 1 year with compounding rate of interest of r per year, ...

#### Solution Summary

Business and the mathematical formulas are applied clearly.