University of Mumbai, Maharashtra (Mumbai University), Finance Semester 2, Business Mathematics Syllabus

Business Mathematics

1 Elementary Financial Mathematics
• Simple and Compound Interest: Interest compounded once a year, more than
once a year, continuous, nominal and effective rate of interest
• Annuity-Present and future value-sinking funds
• Depreciation of Assets: Equated Monthly Installments (EMI)- using flat
interest rate and reducing balance method.
• Functions:Algebraic functions and the functions used in business and
economics, Break Even and Equilibrium point.
• Permutation and Combination: (Simple problems to be solved with the
calculator only)

2 Matrices and Determinants
• Matrices: Some important definitions and some important results. Matrix
operation (Addition, scalar multiplication , matrix multiplication, transpose of
a matrix)
• Determinants of a matrix of order two or three: properties and results of
Determinants
• Solving a system of linear equations using Cramer’s rule
• Inverse of a Matrix (up to order three) using ad-joint of a matrix and matrix
inversion method
• Case study: Input Output Analysis

3 Derivatives and Applications of Derivatives
• Introduction and Concept: Derivatives of constant function, logarithmic
functions, polynomial and exponential function
• Rules of derivatives: addition, multiplication, quotient
• Second order derivatives
• Application of Derivatives: Maxima, Minima, Average Cost and Marginal Cost.
Total revenue, Marginal revenue, Average revenue. Average and Marginal
profit. Price elasticity of demand

4 Numerical Analysis [Interpolation]
• Introduction and concept: Finite differences – forward difference operator –
Newton’s forward difference formula with simple examples
• Backward Difference Operator. Newton’s backward interpolation formula with
simple examples