The Association of Business Executives Certificate

1.4IQM
IQM1207

Introduction to Quantitative Methods

morning 6 December 2007

1 Time allowed: 3 hours. 2 Answer any FOUR questions. 3 All questions carry 25 marks. Marks for subdivisions of questions are shown in brackets. 4 No books, dictionaries, notes or any other written materials are allowed in this examination. 5 Calculators, including scientific calculators, are allowed providing they are not programmable and cannot store or recall information. Electronic dictionaries and personal organisers are NOT allowed. Appropriate intermediate steps in the calculations must be shown. 6 Formulae are printed on pages 8 to 11 for the assistance of candidates. Their use is not compulsory. 7 Candidates who break ABE regulations, or commit any misconduct, will be disqualified from the examinations. 8 Question papers must not be removed from the Examination Hall.

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ABE 2007

T/500/3660

Answer any FOUR questions Q1 (a) Without the use of a calculator, find the value of the following, showing all steps in your calculations: 1 (i) 3 1 + 2 31 , 5 10 3 (ii) (iii) (iv)

( ) (51 3) 13, 8 4 4
( 3 3 )9 2 , 9

Convert each decimal value to a fraction and then evaluate: (0.01 0.1) ((0.1)2 0.001)

(8 marks)

(b)

Express 10.55454 (i) Correct to the nearest whole number, (ii) Correct to 3 decimal places, (iii) Correct to 4 significant figures, (iv) In standard form A 10n where 1 A

10 and n is an integer.

(4 marks)

(c)

Use a calculator to evaluate the following correct to 1 decimal place: (i) ((220)2 0.199) 48.99, (ii) (iii) (2.25 log 4.4) (3.84 ln 1.21), (5.5)1.2 (e1.45). Express 0.375 as a fraction in its simplest form. 13 Express as a percentage. 125 Write 42.775 103 in decimal form. Increase 476.2 by 18% and give the answer to the nearest whole number. (7 marks) (Total 25 marks) (6 marks)

(d)

(i) (ii) (iii) (iv)

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Q2

An office has to replace some office machinery in three years time which it is assumed will cost 9,000. (a) Calculate how much must be invested now, to buy this machinery in three years time, if the interest rate which can be earned on investments is 10%. (Interest earned each year will be re-invested and no money will be withdrawn.) Give your answer to the nearest . (5 marks) At the end of year 2, the forecast price of the machinery at the end of the third year was expected to increase by 8%. Calculate the value of the investment so far and therefore how much additional money must be invested at the beginning of the third year in order to pay the increased price. Give your answer to the nearest . (7 marks) Instead of investing all the money now as in part (a), an alternative plan would be to invest 3,000 at the beginning of each of the three years. Interest at 10% will be earned on each years investment and re-invested as in part (a). (i) (ii) What would be the value of this investment at the end of the third year? What surplus will result from using this plan after paying for the machinery at the increased price? (8 marks)

(b)

(c)

Give answers to the nearest . (d)

The office machinery depreciates from its assumed value of 9,000 over the next five years. Determine its new value at the end of year 5, using the: (i) straight line method with annual depreciation of 900, (ii) reducing balance method with a rate of 10% per year. Give answers to the nearest . (5 marks) (Total 25 marks)

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Q3

(a)

A sales assistant is paid a basic wage of 100 per week plus commission of 5% of the value of the goods sold. What will be the earnings in a week in which the assistant sells goods to the value of 1,890? (3 marks) A sales assistants yearly income is 12,500. After deducting a personal allowance of 5,035, tax is due on the remaining income at a rate of 17.5%. How much tax will be paid for the year? Give the answer to the nearest . (3 marks) The perimeter of a rectangular field of dimensions thirty-six metres by twenty-eight metres is to be fenced with fencing panels. Each panel is two metres long and costs 10. Posts must be erected at the junction of each panel with another and cost 7.50 each. A two metre wide gate which costs 75 is to be placed instead of one fencing panel. The posts are set inside the panels and take up no space on the perimeter. It takes thirty minutes to erect a panel together with a post and forty-five minutes to erect a post and to hang the gate on it. Labour costs 12.50 per hour. (i) (ii) (iii) (iv) What is the number of panels and posts required to surround the field? (4 marks) What is the total material cost of panels, posts and gate? What is the total labour cost to erect panels, posts and gate? What is the overall cost of fencing the field? Give each answer to (ii), (iii) and (iv) to the nearest . (v) Assuming that the work must be completed in one day, how many workers would be required if they each worked an 8-hour day? A worker cannot be employed for less than 8 hours. (3 marks) The field in part (c) is to be fertilised at a rate of 1.5 kgs per square metre with fertiliser which costs 90 per tonne. (1 tonne = 1000 kgs). Calculate the cost of the fertiliser required for the field. (4 marks) (Total 25 marks) (4 marks) (3 marks) (1 mark)

(b)

(c)

(vi)

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Q4

(a)

Solve the following equations: x x (i) + = 3, 2 4 5 (ii) x2 3x 10 = 0, (iii) 2x2 + 3x 10 = 0. (Correct to 2 decimal places) (9 marks)

(b)

The equation relating the cost y and the quantity purchased x for an item is linear of the form: y = mx + c where m and c are constants. It is known that 200 items cost 4 and 150 items cost 6. Find the values of m and c and use the equation to find the cost of 100 items. (10 marks) Solve the following equations: (If an answer is not exact, give it correct to 2 decimal places.) (i) 4x = 100, (ii) e2x = 10, (iii) log 3x = 3.

(c)

(6 marks) (Total 25 marks)

Q5

(a)

Find the equations of the straight lines L1, L2, L3 defined below: L1 passes through the points (2,1) and (6,3), L2 cuts the y-axis where y = 3 and has gradient 1 , 2 L3 cuts the x-axis where x = 3 and passes through the point (3,6). (i) (ii) (iii) Give each equation in the form y = mx + c. Draw the graph for each line on the same pair of axes from 6 to +6. Use the graph (or otherwise) to find the co-ordinates of the points of intersection for the three lines. (16 marks)

(b)

The sales S (in thousand of units) of a product after it has been on the market for t months is given by the equation: S = 100 (1 e0.1625t) (i) (ii) (iii) Construct a table of values for S for t = 0, 5, 10, 15, 20, 25. Give S values to the nearest whole number. Use the table to draw a graph of S against t. Estimate the value of S when t is very large. (9 marks) (Total 25 marks)

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Q6

The table below gives a breakdown of the use of four different types of fertiliser in UK agriculture for the years 1994, 1999 and 2004. 1994 Fertiliser Nitrogen (Straight) 553 618 430 291 357 590 378 206 247 Units: Thousand tonnes. (a) Re-write the given table and amend it to show: (i) the total quantity of fertiliser used in each year, (ii) the percentages of each fertiliser used in each year. 1999 2004

Nitrogen (Compounds) 413 Phosphate Potash 236 299

(6 marks)

(b)

Represent these data for each year using a suitable percentage component bar chart. (8 marks) Construct a percentage pie chart of radius 3 inches to represent these data for year 2004. State clearly the angles used for construction of the chart correct to 1 decimal place. (7 marks) Identify any changes that have occurred in the usage of these fertilisers between 1994 and 2004. (4 marks) (Total 25 marks)

(c)

(d)

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Q7

The following set of data represents the distribution of house prices in the north-east (NE) and south-west (SW) of a country. Random samples of 100 houses were selected in each region. Price range (000) 80 but under 100 100 but under 120 120 but under 140 140 but under 160 160 but under 180 180 but under 200 200 but under 220 220 but under 240 (a) (i) (ii) (i) No. of houses in NE No. of houses in SW 5 9 20 35 10 9 8 4 3 5 6 18 30 23 10 5

Draw a histogram to represent the data for the (NE) distribution. Calculate the mean, and standard deviation for the (NE) distribution.

(13 marks)

(b)

Represent graphically the cumulative frequency for the (SW) distribution. Use the curve to find the quartiles Q1, Q2, Q3 for the distribution. (10 marks) (2 marks) (Total 25 marks)

(c)

Comment on the shape of the two distributions.

Q8

(a)

A lifetime test on a large sample of long-life electric light bulbs was carried out. The lifetimes were found to be distributed normally with a mean of 1,900 hours and a standard deviation of 50 hours. (i) What percentage of these bulbs could be expected to have a lifetime of: (A) less than 1,850 hours? (B) more than 1,980 hours ? (C) between 1,800 and 1,950 hours? Between what upper and lower limits would the central 80% of the lifetimes for the bulbs lie? (15 marks)

(ii)

(b)

Three men and four women are available to tackle a specific task which requires two people. If two people are chosen at random for the task, find the probability that there will be: (i) no men, (ii) one man, (iii) two men. (10 marks) (Total 25 marks) End of Question Paper

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INTRODUCTION TO QUANTITATIVE METHODS FORMULAE FOR BUSINESS MATHEMATICS AND STATISTICS INTEREST The formula for calculating compound interest: r A = P 1 + 100
n

where: A = Accrued amount P = Original principal r = Rate of interest (for a particular time period, usually annual) n = Number of time periods. DEPRECIATION

Straight-line method: Cost of asset Annual depreciation = Useful life (Cost of asset) (Value at end of useful life) or Annual depreciation = Useful life

Reducing balance method: D = B (1 i ) n where: D = Depreciated value at the end of the n th time period B = Original value at beginning of time period i = Depreciation rate (as a proportion) n = Number of time periods (normally years)

STRAIGHT LINE A linear function is one for which, when the relationship is plotted on a graph, a straight line is obtained. The expression of a linear function, and hence the formula of a straight line, takes the following form: y = mx + c Note that: c = the y intercept (the point where the line crosses the y axis) m = the gradient (or slope) of the line

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QUADRATIC EQUATION A quadratic equation of the form ax 2 + bx + c = 0 can be solved using the following formula: x= b b 2 4ac 2a

RULES FOR LOGARITHMS 1. log(p q) = log p + log q. 2. p log = log p log q. q

3. log pn = n log p. 4. If y = axn then n = (log y log a) log x PROBABILITY

Probability rules: Probability limits: Total probability rule: For complementary events: For two mutually exclusive events: For independent events: 0 P(A) 1. P(A) + P(A ) = 1 P(A and B) = 0 P(A) = P(A |B) and/or P(B) = P(B |A).

P = 1 (for all outcomes).

Multiplication rules: For independent events: For dependent events: P(A and B) = P(A)P(B). P(A and B) = P(A)P(B |A).

Additional rules: For mutually exclusive events: For mutually non-exclusive events: P(A or B) = P(A) + P(B). P(A or B) = P(A) + P(B) P(A and B).

Conditional rules: P(A and B) P(A|B) = P(B) P(A and B) and P(B |A) = . P(A)

Expected value of variables x with associated probabilities P(x) is E(x) = xP(x)

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STATISTICAL MEASURES

Mean for ungrouped data: =

x x and x = n N

where N is population size and n is sample size.

Mean for grouped data: = mf/N and x = mf/n where m is the midpoint and f is the frequency of a class.

Median for ungrouped data: n + 1 = Value of the th term in a ranked data set. 2

Range = Largest value Smallest value. Standard deviation for ungrouped data:

( x )
N N

and s =

( x )
n n 1

where and s are the population and sample standard deviation respectively.

Standard deviation for grouped data:

( mf ) m f
2

and s =

( mf ) m f
2

n 1

Pearsons measure of skewness: Mean Mode 3(Mean Median) Psk = or Standard deviation Standard deviation

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STANDARD NORMAL DISTRIBUTION The table of values of the standard normal distribution set out below provides a means of determining the probability of an observation (x ) lying within specified standard deviations () of the mean of the distribution ( ).

AREAS IN TAIL OF THE STANDARD NORMAL DISTRIBUTION

(x ) - .00 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 .5000 .4602 .4207 .3821 .3446 .3085 .2743 .2420 .2119 .1841 .1587 .1357 .1151 .0968 .0808 .0668 .0548 .0446 .0359 .0287 .02275 .01786 .01390 .01072 .00820 .00621 .00466 .00347 .00256 .00187 .00135

.01 .4960 .4562 .4168 .3783 .3409 .3050 .2709 .2389 .2090 .1814 .1562 .1335 .1131 .0951 .0793 .0655 .0537 .0436 .0351 .0281 .02222 .01743 .01355 .01044 .00798 .00604 .00453 .00336 .00248 .00181

.02 .4920 .4522 .4129 .3745 .3372 .3015 .2676 .2358 .2061 .1788 .1539 .1314 .1112 .0934 .0778 .0643 .0526 .0427 .0344 .0274 .02169 .01700 .01321 .01017 .00776 .00587 .00440 .00326 .00240 .00175

.03 .4880 .4483 .4090 .3707 .3336 .2981 .2643 .2327 .2033 .1762 .1515 .1292 .1093 .0918 .0764 .0630 .0516 .0418 .0336 .0268 .02118 .01659 .01287 .00990 .00755 .00570 .00427 .00317 .00233 .00169

.04 .4840 .4443 .4052 .3669 .3300 .2946 .2611 .2296 .2005 .1736 .1492 .1271 .1075 .0901 .0749 .0618 .0505 .0409 .0329 .0262 .02068 .01618 .01255 .00964 .00734 .00554 .00415 .00307 .00226 .00164

.05 .4801 .4404 .4013 .3632 .3264 .2912 .2578 .2266 .1977 .1711 .1469 .1251 .1056 .0885 .0735 .0606 .0495 .0401 .0322 .0256 .02018 .01578 .01222 .00939 .00714 .00539 .00402 .00298 .00219 .00159

.06 .4761 .4364 .3874 .3594 .3228 .2877 .2546 .2236 .1949 .1685 .1446 .1230 .1038 .0869 .0721 .0594 .0485 .0392 .0314 .0250 .01970 .01539 .01191 .00914 .00695 .00523 .00391 .00289 .00212 .00154

.07 .4721 .4325 .3936 .3557 .3192 .2843 .2514 .2206 .1922 .1660 .1423 .1210 .1020 .0853 .0708 .0582 .0475 .0384 .0307 .0244 .01923 .01500 .01160 .00889 .00676 .00508 .00379 .00280 .00205 .00149

.08 .4681 .4286 .3897 .3520 .3156 .2810 .2483 .2177 .1894 .1635 .1401 .1190 .1003 .0838 .0694 .0571 .0465 .0375 .0301 .0239 .01876 .01463 .01130 .00866 .00657 .00494 .00368 .00272 .00199 .00144

.09 .4641 .4247 .3859 .3483 .3121 .2776 .2451 .2148 .1867 .1611 .1379 .1170 .0985 .0823 .0681 .0559 .0455 .0367 .0294 .0233 .01831 .01426 .01101 .00842 .00639 .00480 .00357 .00264 .00193 .00139

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Certificate Introduction to Quantitative Methods Examiners Suggested Answers 1 1 1 16 21 10 3 5 + 2 10 3 3 = 5 + 10 3 = (ii) 53 10 2 = 17 10 3 3

Q1

(a)

(i)

1 3 3 41 3 4 5 8 4 14 = 8 4 7 = 35 4 1 =2 8 7 2

(iii)

9 33 9 2 =
2

(3 3 ) 81 = 0
3

(iv)

(0.01 0.1) (0.1)

0.001

2 1 1 1 1 = 100 10 10 1000 1 10 1 1000 = =1 100 1 100 1

(b)

(i) (ii) (iii) (iv) (i) (ii) (iii) (i)

11 10.555 10.55 1.055454 101 440.7217 = 440.7 (1 d.p.) 0.071868 = 0.1 (1 d.p.) 32.97328 = 33.0 (1 d.p.) 0.375 = 375 15 3 = = 1000 40 8

(c)

(d)

(ii)

13 100 = 10.4% 125 42.775 103= 0.042775 476.2 118 = 561.916 = 562 100

(iii)

(iv)

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Q2

(a)

A= 9000 = P= =

P (1 + R)n P(1 + 0.1)3 9000 = (1.1)3 = 6761.83 6762

(b)

New price at end of year 3 = 9000 1.08 = 9720 Extra amount required at end of year 3 = 9720 9000 = 720 Additional amount to be invested = P Then 720 = P(1.1) P = 654.54

655

(c)

(i) (ii)

Value of new investment = 3000(1.1)3 + 3000(1.1)2 = 3000(1.1) = 10923 Surplus = 10923 9720 Surplus = 1203 Value = 9000 (5 900) = 4500, Value = 9000(1 0.1)5 = 5314.

(d)

(i) (ii)

Q3

(a)

Earnings = 100 + 5 1890 100 =194.50 Tax = 12500 5035 17.5 100 = 1306 (i) Total number of panels = ((36 + 36 + 28 + 28) Note: (minus one for gate) Number of posts = 64 Material costs: Panels = 63 10 = 630 Posts = 64 7.50 = 480 Gate = 1 75 = 75 Total = 1185 Labour costs: Panels + Posts = 63 0.5 12.50 = 393.75 Gate + Post = 1 0.75 12.50 = 9.375 Total = 403 Overall cost = 1588 Total time = (63 0.5) + (1 0.75) = 32.25hrs Number of workers = 32.25 8 = 4.03125 i.e. 5 workers required. Cost of fertiliser = (36 28) 1.5 (90 /1000) = 136.08 2) 1 = 64 1 = 63

(b)

(c)

(ii)

(iii)

(iv) (v)

(vi)

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Q4

(a)

(i)

x x 3 + = 2 4 5 ( 20) 10x + 5x = 12 15x = 12, x = 12 4 = = 0.8 15 5

(ii)

x2 3x 10 = 0 (x 5)(x + 2) = 0 x = 5 or x = 2 x= = 3 9 4 2 10 4

(iii)

( )( )

3 89 = 1.61 or 3.11 4

(b)

y = mx + c 4 = 200m + c and 6 = 150m + c Subtract: then 2 = 50m, 4 = 200(0.04) + c, Equation is y = 0.04x + 12 When x = 100 then price = 8 m = 2 = 0.04 50

c = 4 + 8 = 12

(c)

(i) (ii) (iii)

4x = 100, e2x = 10, log 3x = 3,

x = log100 2x = In10, 3x = 10 ,
3

log4 = 3.32 x = 1.15 x = 333.33

Q5

(a)

(i)

L1:

y 1 x 2 = 3 1 6 2

y 1 x 2 , = 2 8

8y + 8 = 2x + 4, 8y = 2x + 12, 1 3 y = x+ 4 2 L2: y 3 = L3: 1 x, 2 y= 1 x +3 2 y = x + 3

y 0 y x 3 x 3 , , = = 6 0 3 3 6 6

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(ii)

(iii) (b)

Points of intersection: L1L2:(2,2), L2L3:(0,3), L1L3:(2,1).

S = 100 (1 e0.1625 t) t= S= 0 0 5 56 10 80 15 91 20 96 25 98

When t is very large S will be approximately 100.

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Q6

(a) 94 Nitrogen (s) Nitrogen (c) Phosphate Potash Total (i) (ii) (b) 553 413 236 299 1501 total percentages % 37 28 16 20 100 99 618 430 291 357 1696 % 36 25 17 21 100 04 590 378 206 247 1421 % 42 27 14 17 100

(c)

Pie chart angles: N(s) = 149.5 degrees N(c) = 95.8 degrees Ph = 52.2 degrees Po = 62.6 degrees

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(d)

Overall, total use of fertilisers fell between 1992 to 2004 although use increased during the initial years 1994 to 1999. For Nitrogen (s) and (c), totals rose then fell but % of overall total fell then rose. For Phosphate and Potash, totals rose then fell and % of overall total rose then fell. (Other relevant points acceptable).

Q7

(a)

(i)

fx = 15300

2 fx = 2453200

Mean = 153,000 SD(n 1) = 33,511 Or SD (n) = 33,680 (b) Price range 80 < 100 100 < 120 120 < 140 140 < 160 160 < 180 180 < 200 200 < 220 220 < 240 F(SW) 3 5 6 18 30 23 10 5 cf 3 8 14 32 62 85 95 100

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Q1 = 152,000, Q2 = 172,000, Q3 = 191,000 (c) NE positive skew, SW negative skew (both nearly symmetrical) X

Q8

(a) (i)

Let X = lifetime of bulbs, (A) (B) (C) P(X P(X

= 1900,

= 50,

Z= 16% 5%

1850) = P(Z 1980) = P(Z X

1) = 0.1587 1.6) = 0.0548

P(1800

1950) = P(2 < Z < 1) = 1 (0.02275 + 0.1587) = 0.81855 82%

(ii)

Let limits be a and b. Then P(a P (1.28 Z

b) = 0.8 and 1.28) = 0.8

So, a = 1900 (1.28 50) = 1836 hours and b = 1900 + (1.28 50 ) = 1964 hours (b) (i) P(no men) = P (W first and W second) = (ii) 4 3 12 2 = = 7 6 42 7

P(one man) = P ( M first and W second or W first and M second) 3 4 4 3 24 4 = + = = 7 6 7 6 42 7

(iii)

P(two men) = P( M first and M second ) = 3 2 6 1 = = 7 6 42 7

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