The Mathematics of Money

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“Money is the root of all evil” so the old adage goes. Whether we agree with that sentiment or not, we have to admit that if money is an evil, it is a necessary one.

Love it or hate it, money plays a central role in the world and in our lives, both professional and personal. We all have to earn livings and pay bills, and to accomplish our goals, whatever they may be, reality requires us to manage the financing of those goals.

Sadly, though, financial matters are often poorly understood, and many otherwise promising ventures fail as a result of financial misunderstandings or misjudgments.

A talented chef can open an outstanding restaurant, first rate in every way, only to see the doors closed as a result of financial shortcomings.

An inventor with a terrific new product can nonetheless fail to bring it to market because of inadequate financing.

An entrepreneur with an outstanding vision for a business can still fail to profit from it if savvier competition captures the same market with an inferior product but better management of the dollars and cents. And, on a more personal level, statistics continually show that “financial problems” are one of the most commonly cited causes of divorce in the United States. Of course, nothing in this book can guarantee you a top-rated restaurant, world-changing new product, successful business, or happy marriage. Yet, it is true that a reasonable understanding of money matters can certainly be a big help in achieving whatever it is you want to achieve in this life. It is also true that mathematics is a tool essential to this understanding.

The goal of this book is to equip you with a solid understanding of the basic mathematical skills necessary to navigate the world of money. Now, unfortunately (from my point of view at least), while not everyone would agree that money is root of all evil, it is not hard to find people who believe that mathematics is. Of course, while some students come to a business math course with positive feelings toward the subject, certainly many more start off with less than warm and cozy feelings.

Whichever camp you fall into, it is important to approach this book and the course it is being used for with an open mind. Yes, this is mathematics, but it is mathematics being put to a specific use. You may not fall in love with it, but you may find that studying math in the context of business and finance makes skills that once seemed painfully abstract do fall together in a way that makes sense.

Those who do not master money are mastered by it. Even if the material may occasionally be frustrating, hang in there! There is a payoff for the effort, and whether it comes easily or not, it will come if you stick with it

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