Formula Review

Business Math I

Review Order of Operation

1. Perform all operations inside parentheses first. 2. Perform all operations with exponents. 3. Perform all operations involving multiplication and division from left to right. 4. Perform all operations involving addition and subtraction from left to right.

Exercise

Using Formula
Find the value of p in the formula = R=0.05, T = 3
when

I = 30,

Using Formula
Find the value of PV using the formula = when (1+) FV = $2400, R = 0.02, N = 3

Practice
Evaluate each formula. You will be using these formulas in later chapters. Round the answers to two decimal places if necessary.

Account Register
In order to keep your checking account accurate, you need to keep an accurate recording of all of the transactions. This can be done by using the account register that comes with your checkbook.

Credit Transaction
There are two types of transactions that are commonly associated with a checking account. When you put money into your checking account or collect interest on the money that you have in your account, the transaction is called a credit transaction.

Debit Transaction and Balance

When you write a check or take money out of your account, the transaction is called a debit transaction. The amount of money that you currently have in your checking account is called the balance. When you complete a credit transaction, you add the amount of the transaction to your balance. When

you complete a debit transaction, you subtract the amount of the transaction
from the current balance.

On July 1, you deposit your payroll check in the amount of $872.43 into your checking account. Previously the balance was $375.60. During the week, you write the following checks:

Date Check No. Payee

7/1 7/2 7/3 7/4 7/5 130 131 132 133 Bobs Auto Corner Grocery Health Club Deposit

Amount
$18.79 $83.15 $40.00 $100.00

Jones Hardware $127.65

Record the balance, check number, and date in the appropriate columns. When the transaction is a credit transaction, add the amount to the balance. When the transaction is a debit transaction, subtract the amount from the balance.
Number Date 7/1 130 131 132 133 7/1 7/3 7/4 7/4 7/5 Transaction Deposit Bobs Auto Corner Grocery Jones Hardware Health Club Deposit $18.79 $83.15 $127.65 $40.00 $100.00 Debit Credit $872.43 Balance $375.60 $1248.03 $1229.24 $1146.09 $1018.44 $978.44 $1078.44

Reconciling a Bank Statement

Every month the bank sends a statement of the transactions to its checking account customers. The purpose of this statement is to enable you to make sure that your account is balanced. If it is not balanced, then you must reconcile any differences in the statement and in your account register.