Preface ix

About the Authors xi

**1 Linear Equations and Mathematical Concepts 1**

1.1 Solving Linear Equations 2

1.2 Equations of Lines and Their Graphs 7

1.3 Solving Systems of Linear Equations 15

1.4 The Numbers *𝜋 *and *e* 21

1.5 Exponential and Logarithmic Functions 24

1.6 Variation 32

1.7 Unit Conversions and Dimensional Analysis 38

**2 Mathematics of Finance 47**

2.1 Simple and Compound Interest 47

2.2 Ordinary Annuity 55

2.3 Amortization 59

2.4 Arithmetic and Geometric Sequences 63

**3 Matrix Algebra 71**

3.1 Matrices 72

3.2 Matrix Notation, Arithmetic, and Augmented Matrices 78

3.3 Gauss–Jordan Elimination 89

3.4 Matrix Inversion and Input–Output Analysis 100

**4 Linear Programming – Geometric Solutions 116**

Introduction 116

4.1 Graphing Linear Inequalities 117

4.2 Graphing Systems of Linear Inequalities 121

4.3 Geometric Solutions to Linear Programs 125

**5 Linear Programming – Simplex Method 136**

5.1 The Standard Maximization Problem (SMP) 137

5.2 Tableaus and Pivot Operations 142

5.3 Optimal Solutions and the Simplex Method 149

5.4 Dual Programs 161

5.5 Non-SMP Linear Programs 167

**6 Linear Programming – Application Models 182**

**7 Set and Probability Relationships 203**

7.1 Sets 204

7.2 Venn Diagrams 210

7.3 Tree Diagrams 216

7.4 Combinatorics 221

7.5 Mathematical Probability 231

7.6 Bayes’ Rule and Decision Trees 245

**8 Random Variables and Probability Distributions 259**

8.1 Random Variables 259

8.2 Bernoulli Trials and the Binomial Distribution 265

8.3 The Hypergeometric Distribution 273

8.4 The Poisson Distribution 279

**9 Markov Chains 285**

9.1 Transition Matrices and Diagrams 286

9.2 Transitions 291

9.3 Regular Markov Chains 295

9.4 Absorbing Markov Chains 304

**10 Mathematical Statistics 314**

10.1 Graphical Descriptions of Data 315

10.2 Measures of Central Tendency and Dispersion 323

10.3 The Uniform Distribution 331

10.4 The Normal Distribution 334

10.5 Normal Distribution Applications 348

10.6 Developing and Conducting a Survey 363

**11 Enrichment in Finite Mathematics 371**

11.1 Game Theory 372

11.2 Applications in Finance and Economics 385

11.3 Applications in Social and Life Sciences 394

11.4 Monte Carlo Method 403

11.5 Dynamic Programming 422

Answers to Odd Numbered Exercises 439

Using Technology 502

Glossary 506

Index 513