Why maths are key to our prosperity
Maths are everything. Maths are absolute. Maths are everywhere in our world in virtually every decision we make in our daily lives. Behind the scenes, maths calculations have become so mundane that we have become practically oblivious.
And, maths phobia remains a constant in today's society.
The ancients were maths-savvy geniuses. They laid the groundwork for us — did we know that?
The world is flat: no, said the ancient Greek Eratosthenes who calculated its true spherical shape. The Egyptians memorialised their dead with monstrous pyramids, built with hidden internal chambers by precision cut tonnage-weight stones slotted into place like a modern-day Rubik's cube. The Romans, constant conquerors in warmongering mode built roads, bridges, complex aqueducts (water pipes) with the first use of cement — skilled engineering feats have survived the test of thousands of years.
Trial and error?
No, maths! By hand, no computers, no calculators!
Practical, amusing, theoretical, ground-breaking — how did Elon Musk send his famous red Tesla into space perpetuity? Maths competency is absolutely vital for our world. You need maths knowledge to protect your own financial interests while establishing a successful career.
Let's walk through some of the thousands of practical applications you may encounter every day.
• Finance: interest, amortisation, savings rates, present and future value, rate of return, decimals, fractions, weights and measures, kilograms, pounds, geometry, cost and profit margins, investment vehicles, stock valuations, dividends, digital currency, currency translation, standard deviation, annuities, insurance: life, property, casualty, workers comp, risk and probability, business profitability models, inventory control, and thousands more computations.
• Mortgages: cost difference between amortised and straight-line mortgages, fixed and variable interest — which one is better for me, have my principal mortgage reduction payments been applied to principal only, not to interest?
• Credit cards — payments applied correctly, interest rate and penalty charges.
• Pensions: is my old age contributory pension calculated correctly for my number of years of contributions? How is my annuity payment calculated for my Bermuda National Pension Scheme distribution?
• Mutual funds: what is the investment rate of return after pension administration and portfolio management fees? How do I compare two mutual funds and their performance?
• Bank accounts: is compound interest calculated daily better than quarterly? My term deposit is held in euros — do I gain or lose when the euros value rises against Bermuda dollar?
• Cost of living grocery price comparisons: my protein choices, one is priced in ounces, the other in grams? Litres to ounces? Cost of individual servings per quality food consumption — chips compared to hamburger?
• Blockchain technology, still so new for most of us that we all need education on its applications.
• Mobile phones, internet, television, satellite efficient transmission. All calculated with advanced math. How does a cellular service calculate your daily minutes of use and charge accordingly?
• You want to invest in bitcoin. There are only a fixed number of bitcoins available. Your purchase of $3,000 will give you 0.30559 of 1 bitcoin (at the quoted price on Thursday at 11am), a percentage of one bitcoin stated in decimals.
• Business. You yearn to own your own business.
• Retail: my business space is 500 square feet; there are two salaried employees and me, rent, inventory, utilities, advertising, packaging, electronic equipment needed at a minimum. What do I have to charge for each item of clothing (at a minimum) in order to cover all costs, and still have a profit for me?
• Salon service: how many customers must we welcome in a day to cover costs and hopefully, a profit. What do we charge?
• Construction: how do I calculate amount of materials needed for load-bearing walls, carry beams, cement, subcontractors, labour, blueprint interpretation, interiors and hundreds of other items — some not even planned for? At a minimum, the project manager is dealing with hundreds of calculations — yes, many use construction computer technology, but the end result is only as good as the original input.
• Restaurant: how do I price a meal? How many do we have to serve each day — under portion control? How many servers can I afford? What percentage of the cost do I build in for food spoilage?
• Business risks and probability: statistics and catastrophe modelling are predominant in the large insurance sector. How do you calculate the odds of a hurricane? How do you price homeowner's insurance? How many people need insurance coverage? How many bereaved families need life insurance benefits?
Businesses all operate on some type of cost analysis pricing to cover operating costs and make a profit. But the contingency factor — the what-if factor — can be huge. What if it rains, what if no one likes the food, what if building supplies don't arrive on time, what if, and this is huge, the competition is cutting prices and I am losing customers. A business that does not run a what-if math projection model on a continuing basis may find it difficult to survive.
In recent weeks, the Minister of Education announced the results of the recent year Cambridge Checkpoint maths testing for P6 and M3 students for the 2016-17 school year. Regrettably and concerning, the results were a disappointing commentary on the maths abilities of our young people (https://goo.gl/Tw3BkW).
For those curious about Cambridge tests themselves, here is a link to 2016 prior primary year exam that may be similar to the tests provided to Bermuda. Take the test — see how well you can do. (https://goo.gl/UxKz2W )
Bermuda is home to some of the most sophisticated businesses in the world — mathematics is absolutely vital for global business success.
Where will enough qualified maths specialists of the future come from?
“But the reality is, if we do not educate our children to acceptable standards then there is no hope to change the paradigm of private school-educated children and expats reaping the economic spoils in the future!” — blog commentator.
• Martha Harris Myron CPA PFS JSM: Masters of Law — International Tax and Financial Services. Pondstraddler Life™ financial perspectives for Bermuda islanders with multinational families and international connections on the Great Atlantic Pond. Contact: firstname.lastname@example.org