A Penny Saved is a Penny Earned

Todd Majestic, Brian Bisignani, Kelly Shattuck, Jackie Southard To begin this project, we sampled 152 pennies. We recorded the date of production of each penny. With this data, we were able to create four models to make predictions about the probability of selecting a penny from a given year and the life expectancy of a penny. Model 1: We assumed that pennies never die and that the mintage of pennies remains constant each year. In this model, the probability of selecting a penny is the same for each year. Using the years 1909 to 2008, we found that the probability for each year is 1/100. Then, by adding the square of the differences between the observed probabilities and our model probabilities, we arrived at an error of 0.0217828. The closer this value is to zero, the better the model. Model 2: For this model, we assumed that pennies never die and the mintage for each year is not constant. We used the mintage data given. To calculate the probability for each year, we used the mintage for that year divided by the total number of pennies minted from 1909 to 2008. Calculating the error in the same manner as our first model, we came up with an error value of 0.010324. This model appeared to be better than the first because our error value is closer to zero. Model 3: This model assumed that pennies do die and the mintage remains constant from year to year. We let be the probability that a penny lives for one year and 1 is the probability that it will die. So, (1 ) is the probability that a penny will live one year and die the next year. To find a value for we chose a random year, in our case 1970. Using the observed probability for this year, we solved the equation 1 = 0.013158 for . Then, each probability was found by finding 2007 k (1 ) where k is the year minted. 2008 k m0 We found this formula by simplifying the formula . Since (1 + + ... + 2008 k )m0 1 (1 + + ... + n ) sums to as n goes to infinity 1 2008 k m0 2008 k = = 2008 k (1 ) 2008 k 1 . We calculated the error as before and (1 + + ... + ) m0 1 changed until the error was minimized. Using a of 0.957, we came up with an error value of 0.007678817. This is better than both of the previous models. Model 4: For our final model, we assumed that pennies do die and that mintage is not constant from year to year. So, we used the mintage data and our value of . The 2008 k mk equation for this model is 2008 2008 k . Then, we calculated the error as before and came mk
k =1909

up with a value of 0.007485822. This was the closest to zero and therefore our best model.

Question 1: What is the average lifespan of a penny? Since the probability of a penny living from year to year doesnt depend on the mintage data, we only used our value of to calculate the average lifespan of a penny. 1(1 ) is the number of pennies that die in the first year, 2 (1 ) is the number of pennies that die in the second year, etc. So, 1(1 ) + 2 (1 ) + 32 (1 ) + ... will give us the average life expectancy of a penny. Using our data, we came up with a life expectancy of 21.62248947 years. Question 2: In a sample of 150 pennies, what is the oldest penny we should expect? This probability will depend on the mintage and the . We first found the cumulative probability for each year. That is, the probability that a penny chosen will be from that year or later. We used the probability from our model for the year 2007. To find 2006s probability, we added 2007 and 2006. To find 2005 we added 2007, 2006, and 2005, and so on. Since we want to know the probability out of 150 pennies, we raised this data to the 150th power. To find the probability for a specific year, we took the cumulative probability for that year and subtracted the probabilities from all years after that year. For example, to find the probability that a penny chosen is from 1970, we took the cumulative probability for the year 1970 and subtracted the cumulative probability from 1971. The largest probability was in the year 1943, 0.070605381. Our probabilities show that if we choose 150 pennies, we should expect that the oldest penny is from the year 1943 or later.