BeerSmith is cheap and easy... I still prefer to do things by hand though honestly... unless you get heavy into all-grain, then it's nice to have some tools.
You're quick and easy answer was to add 1/5th of the hops. If you're following a recipe, not a big deal. If you still really want to understand why, here's where you can re-read in Palmer.
http://www.howtobrew.com/section1/chapter5-4.html
http://www.howtobrew.com/section1/chapter5-5.html
I arbitrarily picked .121 in my example but I would normally get this from the table in Chapter 5.5.
IBU = AAU x Utilization x 75 / batch size (in gallons).
Using the table, just match up your OG and the amount of time you plan to boil the hops to get the utilization. (i.e. 60 minutes and your beer is 1.040 OG, that would give you a u = .252). Not to confuse the subject, but you'll want to use your pre-boil OG with this table. If your recipe is 1.040 gravity and it's a 5 gallon batch, you're probably starting with 6 gallons (some of it will boil off in an hour). Well your gravity is going to be less than 1.040 when you add the hops because you have more water in your pot initially.
Keep reading the Palmer's book. It's all there, and it's where I got my start. The influences of these equations start to make more sense as you start brewing.