Additional Mathematics Project Work 2 2013

Content Page
No. 1. 2. 3. 4. 5. 6. 7. 8. 9. Contents Acknowledgement Objectives Introduction Part 1 Part 2 Part 3 Part 4 Reflection Reference Page No. 2 3 4-6 7-13 14-17 18-27 28-30 31 32

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Additional Mathematics Project Work 2 2013

Acknowledgement
First and foremost, I would like to thank the principle of Sekolah Menengah Kebangsaan Sultan Sulaiman Shah, Puan Hajah Siti Zaleha binti Harun for giving me the permission to do this Additional Mathematics Project Work. Secondly, I would also like to show my gratitude towards the endless guidance and support given by my Additional Mathematics subject teacher, Puan Rashidah throughout the process of doing this project work. She taught me and my friends patiently on ways to accomplish this project work. Apart from that, I would like to acknowledge and range my earnest appreciation to my parents for giving me supports in every ways, such as money, to buy anything that are related to this project work and their advises, which is the most needed for this project. Lastly, a special thank you to all my friends for aiding me in solving some of the calculations. They were helpful to share information and ideas in order to get this project work done. And especially to God, who made all things possible. Thank you, everyone.

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Additional Mathematics Project Work 2 2013

Objectives

The aims of carrying out this project work are: To apply and adapt a variety of problem-solving strategies to solve problems To improve thinking skills To promote effective mathematical communication To develop mathematical knowledge through problem-solving in a way that increases students interest & confidence To use language of mathematics to express mathematical ideas precisely To provide learning environment that stimulates and enhances effective learning. To develop positive attitude towards mathematics

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Additional Mathematics Project Work 2 2013

Introduction
History of early price indices No clear consensus has emerged on who created the first price index. The earliest reported research in this area came from Welsh poet Henry Rice Vaughan who examined price level change in his 1675 book A Discourse of Coin and Coinage. Vaughan wanted to separate the inflationary impact of the influx of precious metals brought by Spain from the New World from the effect due tocurrency debasement. Vaughan compared labor statutes from his own time to similar statutes dating back to Edward III. These statutes set wages for certain tasks and provided a good record of the change in wage levels. Vaughan reasoned that the market for basic labor did not fluctuate much with time and that a basic laborers salary would probably buy the same amount of goods in different time periods, so that a laborer's salary acted as a basket of goods. Vaughan's analysis indicated that price levels in England had risen six to eightfold over the preceding century. While Vaughan can be considered a forerunner of price index research, his analysis did not actually involve calculating an index.In 1707 Englishman William Fleetwood created perhaps the first true price index. An Oxford student asked Fleetwood to help show how prices had changed. The student stood to lose his fellowship since a fifteenth century stipulation barred students with annual incomes over five pounds from receiving a fellowship. Fleetwood, who already had an interest in price change, had collected a large amount of price data going back hundreds of years. Fleetwood proposed an index consisting of averaged price relatives and used his methods to show that the value of five pounds had changed greatly over the course of 260 years. He argued on behalf of the Oxford students and published his findings anonymously in a volume entitled Chronicon Preciosum.

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Additional Mathematics Project Work 2 2013 Index number theory

Price index formulas can be evaluated based on their relation to economic concepts (like cost of living) or on their mathematical properties. Several different tests of such properties have been proposed in index number theory literature. W.E. Diewert summarized past research in a list of nine such tests for a price index , where and and are vectors give quantities for

giving prices for a base period and a reference period while these periods.[5] 1. Identity test:

The identity test basically means that if prices remain the same and quantities remain in the same proportion to each other (each quantity of an item is multiplied by the same factor of either be one. 2. Proportionality test: , for the first period, or , for the later period) then the index value will

If each price in the original period increases by a factor then the index should increase by the factor . 3. Invariance to changes in scale test:

The price index should not change if the prices in both periods are increased by a factor and the quantities in both periods are increased by another factor. In other words, the magnitude of the values of quantities and prices should not affect the price index. 4. Commensurability test: The index should not be affected by the choice of units used to measure prices and quantities.

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Additional Mathematics Project Work 2 2013 5. Symmetric treatment of time (or, in parity measures, symmetric treatment of place):

Reversing the order of the time periods should produce a reciprocal index value. If the index is calculated from the most recent time period to the earlier time period, it should be the reciprocal of the index found going from the earlier period to the more recent. 6. Symmetric treatment of commodities: All commodities should have a symmetric effect on the index. Different permutations of the same set of vectors should not change the index. 7. Monotonicity test:

A price index for lower later prices should be lower than a price index with higher later period prices. 8. Mean value test: The overall price relative implied by the price index should be between the smallest and largest price relatives for all commodities. 9. Circularity test:

Given three ordered periods price index for periods and and

, the price index for periods

and

times the

should be equivalent to the price index for periods

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Additional Mathematics Project Work 2 2013

PART 1
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PRICE INDEX

A price index (plural: price indices or price indexes) is a normalized average (typically a weighted average) of prices for a given class of goods or services in a given region, during a given interval of time. It is a statistic designed to help to compare how these prices, taken as a whole, differ between time periods or geographical locations. Price indexes have several potential uses. For particularly broad indices, the index can be said to measure the economy's price level or a cost of living. More narrow price indices can help producers with business plans and pricing. Sometimes, they can be useful in helping to guide investment. Some notable price indices include:

Consumer price index Producer price index GDP deflator

WEIGHTAGE The assignment of a quota (as of members of a legislature) to a particular segment of the population as a special favor or concession in a proportion above that allowable on a strictly numerical basis. It is a value given to each item to show the relative importance of each item in a certain condition.

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COMPOSITE INDEX
A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time. Also known simply as a "composite". Usually, a composite index has a large number of factors which are averaged together to form a product representative of an overall market or sector. These indexes are useful tools for

measuring and tracking price level changes to an entire stock market or sector. Therefore, they provide a useful benchmark against which to measure an investor's portfolio. The goal of a well diversified portfolio is usually to outperform the main composite indexes.

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WEIGHTAGE REPRESENTATIONS

I.

probability weights - The most common type of weights are probability weights. These weights represent the probability that a case (or subject) was selected into the sample from a population. These weights are calculated by taking the inverse of the sampling fraction. For example, if you have a population of 10 widgets and you select 3 into your sample, your sampling fraction would be 3/10 and your pweight would be 10/3 = 3.33. You frequently find this type of weight in survey data.

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II.

frequency weights - Frequency weights are whole (i.e., integer) numbers that tell the program how many cases each case represents. It is a kind of short cut: if you have five rows of data that are identical, you can use a frequency weight with a value of 5 and spare yourself having to input the same row five times.

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III.

importance weights - Importance weights are just what you think they should be - they are weights that indicate how "important" a case is. There is no standard way of calculating this type of weight.

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IV.

analytic weights - Analytic weights are perhaps the least common type of weight. This type of weight is used when the cases are actually an average. If the averages are based on different numbers of observations (for example, some averages are based on three observations and others are based on 30 observations), some cases (averages) are measured with more precision than others, and you want the more precisely measured cases to have a greater weight than the less precisely measured cases. The more measurements used in the average, the more precise the average will be. The weights are proportional to the inverse of the variance.

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Additional Mathematics Project Work 2 2013

PART 2
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Additional Mathematics Project Work 2 2013 I. My family's monthly expenditure for the year 2013. Average Monthly Expenditure for the year 2013 (to the nearest RM) 1500 2400 600 90 600 120 450 120 120 6000 Percentage of monthly expenses (to the nearest %) 25 40 10 1.5 10 2 7.5 2 2 100

Item Food Accomodation (Rental / Loan) Transportation (Petrol/ Loan / Bus fare etc) Clothing Education Recreation Utilities (Water / Electricity / Telephone) Medication Miscellaneous TOTAL II.

Average monthly expenses for the year 2012 to calculate price index. Item Average monthly expenses for the year 2012 as the base year (RM) 1200 2400 500 70 400 100 350 100 120 5240 Average monthly expenses for the year 2013 (RM) 1500 2400 600 90 600 120 450 120 120 6000

Food Accomodation (Rental / Loan) Transportation (Petrol / Loan / Bus fare etc) Clothing Education Recreation Utilities (Water / Electricity / Telephone) Medication Miscellaneous TOTAL

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III.

Prince indices for the year 2013 based on the year 2012 and its weightage. Item Food Accomodation (Rental / Loan) Transportation (Petrol / Loan / Bus fare etc) Clothing Education Recreation Utilities (Water / Electricity / Telephone) Medication Miscellaneous TOTAL Price indices for the year 2013 based on the year 2012 I = 1500 x 100 = 125 1200 I = 2400 x 100 = 100 2400 I = 600 x 100 = 120 500 I = 90 x 100 = 129 70 I = 600 x 100 = 150 400 I = 120 x 100 = 120 100 I = 450 x 100 = 129 350 I = 120 x 100 = 120 100 I = 120 x 100 = 100 120 1093 Weightage 25 40 10 1.5 10 2 7.5 2 2 100

IV.

COMPOSITE INDEX

( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( )

= 1166 / 100 =RM 116.66

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Additional Mathematics Project Work 2 2013 V. CONCLUSION My familys expenditure for the year 2013 is higher compared to the year 2012 as the living cost had gone up by 16.66%. Foods expenses increased by 25%, transportations, recreations, and medications expenses gone up by 20%, clothings and utilities cost increased by 29%, and educations expenses gone up by 50%. However, the expenses for accommodation and miscellaneous are constant.

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Additional Mathematics Project Work 2 2013

PART 3
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I.

THE PRICES OF TELEVISIONS BY CASH PAYMENT

Brand

Size of Television (inches) 24 32 40 24 32 40

Price (RM) Shop A 419.00 539.95 785.00 415.00 538.00 734.00 Shop B 415.90 519.00 790.00 420.00 539.00 755.00 Shop C 414.00 539.00 786.00 417.00 535.00 741.00 Mean Price (RM) 416.30 532.65 787.00 417.30 537.30 743.30

Standard Deviation (RM) 2.06 9.66 2.16 5.70 6.20 11.20

Samsung

Panasonic

i.

MEAN x n

SAMSUNG 1. 24 inches =

= RM 416.30 2. 32 inches =

= RM 532.65

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3. 40 inches

= RM 787

PANASONIC 1. 24 inches =

= RM 417.30 2. 32 inches =

= RM 537.30 3. 40 inches

= RM 743.30

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ii.

STANDARD DEVIATION

( )

SAMSUNG 1. 24 inches

= RM 2.06 2. 32 inches

= RM 9.66 3. 40 inches

= RM 2.16

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PANASONIC 1. 24 inches

= RM 5.70 2. 32 inches

= RM 6.20 3. 40 inches

= RM 11.20

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II.

THE PRICES OF TELEVISIONS BY INSTALLMENT

Brand

Size of Television (inches) 24 32 40 24 32 40

Price (RM) Shop A 838.00 1079.90 1570.00 830.00 1076.00 1460.00 Shop B 831.80 1038.00 1580.00 840.00 1079.00 1510.00 Shop C 828.00 1078.00 1572.00 835.00 1070.00 1482.00 Mean Price (RM) 832.60 1065.00 1574.00 835.00 1075.00 1484.00

Standard Deviation (RM) 4.10 31.80 4.30 4.10 3.70 20.50

Samsung

Panasonic

i.

MEAN x n

SAMSUNG 1. 24 inches =

= RM 832.60 2. 32 inches =

= RM 1065.00

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3. 40 inches

= RM 1574.00

PANASONIC 1. 24 inches =

= RM 835.00 2. 32 inches =

= RM 1075.00 3. 40 inches

= RM 1484.00

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iii.

STANDARD DEVIATION

( )

SAMSUNG 1. 24 inches

= RM 4.10 2. 32 inches

= RM 31.80 3. 40 inches

= RM 4.30

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PANASONIC 1. 24 inches

= RM 4.10 2. 32 inches

= RM 3.70 3. 40 inches

= RM 20.50

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III.

Determine the brand and size of the television that you have decided to buy. Give your reasons.

I have decided to buy the Panasonic television which is 24 inches in size. This is because Panasonic is the world's fourth-largest television manufacturer and it produces high quality of electrical equipments which can last longer compared to Samsung. Other than that, a small size of television is enough for my family as my family is a small family. Then, we also cannot afford for an expensive television as our monthly expenses exceeded RM 5000, so a cheap television which only cost RM 415.00 by cash payment will be more appropriate and economical.

VI.

The Ministry of Domestic Trade and Consumer Affairs wishes to present the Fair Price Shop Award for one of the above shops. If you are one of the panels for this award, determine the shop that deserves the award. Do you consider the value of the mean and the value of standard deviation in making your decision? Give your justifications.

The shop that deserves the award will be Shop A. This is because the prices of the televisions in Shop A are nearer to the mean values and the costs are more reasonable and cheaper compared to other shops. Then, the standard deviation of Shop A is smaller than Shop B and C. Therefore, the prices of televisions in Shop A are more consistent. Thus, Shop A should be chosen to receive the Fair Price Shop Award by the Ministry of Domestic Trade and Consumer Affairs.

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Additional Mathematics Project Work 2 2013

PART 4
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(a)

Your family has a fixed monthly income. In order to buy the television, your family needs to make some adjustment on the various types of expenditure. [You can choose to pay by cash or by installment] Show the average monthly expenditure that you have modified in a table.

MONTHLY INCOME : RM 6000 Average Monthly Expenditure for the year 2013 (to the nearest RM) 1500 2400 600 90 600 120 450 120 120 6000 0 Modified Average Monthly Expenditure for the year 2013 (to the nearest RM) 1400 2400 550 80 600 80 440 120 110 5780 220

Item Food Accomodation (Rental / Loan) Transportation (Petrol/ Loan / Bus fare etc) Clothing Education Recreation Utilities (Water / Electricity / Telephone) Medication Miscellaneous TOTAL EXTRA

The adjustment should be carried on for two months in order to save enough money to buy the television by cash because buying television by installment will cost the double value of the original price. So, saving RM 220 for two months will save RM 440 which is enough to buy the television of my choice. Although it takes time, it is more economical as we can save our money.

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(b)

Assuming you have just started working with a monthly salary of RM2 500.You intend to save 10% of your salary every month. Plan your monthly expenditure as in Table 1 above and add other items such as savings and contributions to your parents. Average Monthly Expenditure for the year 2013 (to the nearest RM) 600.00 400.00 300.00 100.00 200.00 100.00 250.00 100.00 100.00 250.00 100.00 2500.00

Item Food Accomodation (Rental / Loan) Transportation (Petrol/ Loan / Bus fare etc) Clothing Education Recreation Utilities (Water / Electricity / Telephone) Medication Miscellaneous Savings Contributions to parents TOTAL

Percentage of monthly expenses (to the nearest %) 24 16 12 4 8 4 10 4 4 10 4 100

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REFLECTION
ADDITIONAL MATHEMATICS

When I Know You For The First Time, I Feel Curious And Obsessed To Know All About You, And I Even Stalk You, Day And Night, You Are So Clingy And Addictive, You Make Me Turns To You 24-Hours A Day, Telling Me Little By Little About The Knower Of All Know, I Feel So Grateful, That He Has Given Me The Chance To Get To Know You Additional Mathematics, You Start From, Addition, Subtraction, Multiplication And Division, Then You Expand To, Squares, Cubes, Square Roots, And Cube Roots, And Now Your Are In, Logarithms, Differentiation And Integration, You Have No Full Stop, I Will Fill You In My Life, I Will Be With You Forever, I LOVE YOU ADDITIONAL MATHEMATICS.

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Reference
1. http://en.wikipedia.org/wiki/Price_index

2. http://en.wikipedia.org/wiki/Composite_(finance)

3. http://en.wikipedia.org/wiki/Weight_(representation_theory)

4. http://www.pricepanda.com.my/

5. Success Additional Mathematics SPM, Reference Book.

6. Focus Ace SPM Additional Mathematics, Reference Book

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