The Association of Business Executives

Certificate



Introduction to Quantitative Methods
June 2011
Suggested Answers




1.4 IQM
Q1.

(a)
(i)
3
1
1
8
3
1
2
1
2
|
.
|

\
|
=
3
4
8
11
2
5

|
.
|

\
|
=
3
4
8
11
8
20

|
.
|

\
|

=
3
4
8
9
=
24
36
=
2
1
1

(ii)
2
4
2
64
36
|
.
|

\
|
=
16
4
8
6
=
4
16
8
6
=
32
96
= 3


(b)
(i) ln 5.98 = 1.78842 = 1.79

(ii) e
0.58
= 1.78603 = 1.79


(c)
(i) 1.061208 10
2


(ii) 106.1


(d)
(i)
4
6
=
2
3
=
2
1
1

(ii)
4
6
=
1
100
4
6
= 150%

(iii)
4
6
= 1.5


(e) Petrol cost = 20 . 1
15
285
= 22.80


Q2.

(a)
(i) 000 , 500
12 8 5
5

+ +
= 100,000
(ii) 000 , 40
12 8 5
8

+ +
= 12,800
(iii)
1
100
8
5
= 62.5%
(iv)
1
100
000 , 500
12 8 5
12
000 , 40
12 8 5
12

|
.
|

\
|

+ +
|
.
|

\
|

+ +
= 8%

(v) Freddie would increase his investment by 60% (i.e. 60,000):

= (5 1.6):8:12 = 8:8:12 = 2:2:3


(b)
(i) US$ 500 converted into Yen = 500 78.1 = 39,050 Yen

Less amount spent: = 39,050 8,690 = 30,360 Yen

Yen converted back into US$: =
5 . 82
360 , 30
= US$ 368

(ii) US$ 500 converted into Yen = 500 78.1 0.975 = 38,073.75 Yen

Less amount spent: = 38,073.75 8,690 = 29,383.75 Yen

Yen converted back into US$: = 975 . 0
5 . 82
29,383.75
= US$ 347.26

Reduction in US$ Dollars: = 368.00 - 347.26 = US$ 20.74

= US$ 21


Q3.

(a) Total interest received on investment = 6,600 5,000 = 1,600

Annual simple interest received = 5,000
100
4
= 200

Number of years investment made =
200
600 , 1
= 8 years


(b)
(i) Total annually compounded interest earned:

= 20,000
10
100
0 . 6
1 |
.
|

\
|
+ 20,000
= 15,817

(ii) Total quarterly compounded interest earned:

= 20,000
4 10
4
0 . 6
100
1

|
|
.
|

\
|
+ 20,000
= 16,280


(c)
(i) Initial cost: 200,000

Depreciation: 18,000 4 = 72,000

Value of machine after four years: 200,000 72,000 = 128,000

(ii) The value at the end of each year is 90% of the value at the beginning of the year:

Value at the end of year 1: 200,000.00 91% = 182,000.00

Value at the end of year 2: 182,000.00 91% = 165,620.00

Value at the end of year 3: 165,620.00 91% = 150,714.20

Value at the end of year 4: 150,714.20 91% = 137,149.92

= 137,150
Q4.

(a)
(i) 4x + 2(x y) = 4x + 2x 2y

= 6x 2y

(ii) a(b c) b(c a) = ab ac bc + ab

= 2ab ac bc

= 2ab c(a + b)


(b)
(i) ( )( ) c b a c b a + + 3 2 2 = ( ) ( ) ( ) ( ) ( ) ( ) 2 1 1 2 3 1 2 1 2 + +

= ( ) ( ) ( ) ( ) 2 1 1 6 2 2 + +

= ( ) ( ) 4 10

= 40

(ii)
a c
b a
4 6
3
+

=
( )
( ) ( ) 1 4 2 6
1 3 1
+



=
( )
( ) ( ) 4 12
3 1
+



=
16
4


= 25 . 0

= 0.5


(c)
(i)
4
x
+
2
x
=
10
6

4
x
+
4
2x
=
10
6


4
3x
=
10
6

x =
3
4
10
6


x =
30
24

x =
5
4
or 0.8





(ii) 9x
2
+ 12x + 4 = 0, using factorisation:

(3x + 2)(3x + 2) = 0
either:
3x + 2 = 0 or 3x + 2 = 0
so:
3x = 2 or 3x = 2

x = 0.667 or x = 0.667

(iii) 5x
2
8x + 2 = 0, using the quadratic formula

5 2
) 2 5 4 ( 8 ) 8 (
2

= x
so:
10
40 64 8
= x

10
24 8
= x


10
89898 . 4 8
= x
so:
x = 1.29 or x = 0.31

Q5.

(a)
(i) Line A: x = 1, y = 2 and c = 2

Thus: 2 = (m 1) 2 m = (2) 2 m = 4

y = 4x 2

(ii) Line B: x = 1, y = 0 and m = 3

Thus: 0 = (3 (1)) + c c = (3) 0 c = 3

y = 3x + 3

(iii) Line C: x = 3, y = 4 and x = 1, y = 2

Thus: m =
) 1 ( 3
2 4

=
4
2
= 0.5

4 = (0.5 3) + c c = (1.5) 4 c = 2.5

y = 0.5x + 2.5



(b) Let: x = cost of bananas per kg
y = cost of apples per kg
then:
11x + 6y = 17.30 (i)
6x + 11y = 13.30 (ii)

to eliminate x, multiply by:

6 66x + 36y = 103.80 (i)
11 66x + 121y = 146.30 (ii)

subtract (i) from (ii):

85y = 42.50 so y = 0.50

substituting for y in (i) we get:

11x + (6 0.50) = 17.30

11x + 3 = 17.30

x =
11
3 30 . 17
so x = 1.30

Therefore: the cost of bananas is 1.30 per kg
the cost of apples is 0.50 per kg.


(c) Using the rule: log (p q) = log p + log q:

log (x) + log (x2) = log (x (x - 2))

= log (x
2
- 2x)

Q6.

(a)
(i) mode = 5 hours

(ii) median =
2
7 6 +
= 6.5 hours

(iii) mean =
12
84
= 7 hours

(iv) range = 12 3 = 9 hours

(v) standard deviation =
2
12
84
12
680
|
.
|

\
|
( )
2
7 67 . 56

= 67 . 7 = 2.77 hours


(b)
Stem and leaf diagram to show weight in grams of 18 airmail letters


21 6
22 4, 5
23 2, 2, 2, 8, 9
24 1, 1, 4, 6
25 5, 6, 7, 7
26 4, 6


Key 216 means 21.6 g


(c) Scatter diagrams are used as a visual aid to examine potential relationships between
two sets of (quantitative) variables, rather than simply providing a visual summary of
one (or more) set of variables.

Specifically, scatter diagrams are the appropriate method of presenting data when you
want to examine the relationship between two continuous variables, such as the
relationship that may exist between sales revenue and the level of advertising
expenditure.
Q7.

(a)
(i) Qualitative
(ii) Quantitative
(iii) Quantitative
(iv) Quantitative
(v) Qualitative
(vi) Qualitative

(b)
(i)
Examination marks Frequency
31 to 40 2
41 to 50 12
51 to 60 23
61 to 70 10
71 to 80 7
81 to 90 4
91 to 100 2


(ii)
0
5
10
15
20
25
41 51 61 71 81 91 100
Frequency
Examination marks
Histogram of examination marks
awarded to business studies students
65.6


(iii) From the histogram, the most likely value of the mode is 65.6 marks

(iv) Measures of dispersion include: standard deviation and range

(v) The distribution of the students examination marks is not normally distributed as
the histogram is positively skewed.
Q8.

(a)
(i) P(scoring < 4) =
6 6
3

=
36
3
=
12
1
or 8.3%

(ii) Expected profit = (100 1) (100
12
1
5) = 58


(b)
(i) P(X < 960) = P(Z <
80
1000 960
)

= P(Z < 0.5)

= 0.3085 = 30.85%


(ii) P(X > 1124) = P(Z >
80
1000 1124
)

= P(Z > 1.55)

= 0.0606 = 6.06%

(iii)
P(X < 960)


P(X > 1124)