What You Need to Know About Business Math

What Business Math Is and Why It's Important

You can't manage personal finances or run a business without a basic understanding of business math.
You can't manage personal finances or run a business without a basic understanding of business math. Michael Blann, Digital Vision, Getty Images

What Is Business Math?

Put quite simply, Business Math deals with Money! Who can't benefit from having a better understanding of money and finance? Everyone can! Business math is for the individual who wants to fully understand everything about personal finance and it's also for the business person who wants to learn about business finance. You simply can't take business without taking math, business and math go hand in hand.

Some passionate business math enthusiasts will tell you, if you don't take any other math or if you don't like math, you still need business math and because it deals with money, you might just like it. Everyone needs to manage money on some level which is what makes business math important for everyone to take.

What Will I Take in Business Math?

Topics in business math are many and include, but are not limited to:
Interest rates
Mortgage Finance and Amortization
Investment and Wealth Management
Taxes and Tax Laws
Markups and Markdowns
Financial Statements
Future and Present Values
Simple and Compound Interest

What Math Do I Need to Take Business Math?

If you decide that business math is for you or that you need business math for your career goal, you will benefit from having an understanding of the following topics along with the ability to solve word problems:

  • Fractions, Decimals and Percents (use the four operations with fractions, convert between fractions and decimals and percents, calculate percents of a number with and without a calculator, convert and simplify fractions, reduce and convert fractions
  • Whole Numbers (to a million, read, write, round and estimate numbers) and Integers (understand how to use the four operations with integers
  • Basic Equations in Early Algebra (solve equations involving more than 1 unknown term, solve proportions, solve equations using more than one operation, use the problem solving plan
  • Be Able to Use a Variety of Formulas
  • Understand and Work with the Mean, Median and the Mode
  • Read Charts and Graphs

Business Math Summary

Business math is not just for the business owner or for personal finance. Business math is also important for the real estate profession, they need to know how to financially close a deal, and to understand mortgages, calculate commission rates, taxes and fees and use a variety of formulas effectively. Wealth managers and advisers, bankers, investment consultants, stock brokers, accountants and tax consultants all need to understand the financial transactions for investment purposes along with having an understanding about growth or loss over time. Business owners need to understand payroll applications and deductions. Then there's goods and services. Whether it's buying or selling, an understanding of discounts, markups, overhead, profits, revenues and costs are all an essential components of the math needed to manage inventory whether it be goods and services or property, which also needs to be financially managed.

Having a background in math opens opportunities and the job prospects are promising. Now is the time to embark on business math.