Add Maths Project Work

Additional Mathematics Project Work 2 2013
Page 1

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


Page 2

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.


Page 3

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


Page 4

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.


Page 5

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 are vectors
giving prices for a base period and a reference period while and give quantities for
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 , for the first period, or , for the later period) then the index value will
be one.
2. Proportionality test:

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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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 , , , the price index for periods and times the
price index for periods and should be equivalent to the price index for periods
and


Page 7

PART
1


Page 8

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.


Page 9

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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10

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.


Page
11

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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12

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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13

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.


Page
14

PART
2


Page
15

I. My family's monthly expenditure for the year 2013.
Item
Average Monthly
Expenditure for the year
2013
(to the nearest RM)
Percentage of
monthly expenses
(to the nearest %)
Food 1500 25
Accomodation
(Rental / Loan)
2400 40
Transportation
(Petrol/ Loan / Bus fare etc)
600 10
Clothing 90 1.5
Education 600 10
Recreation 120 2
Utilities
(Water / Electricity / Telephone)
450 7.5
Medication 120 2
Miscellaneous 120 2
TOTAL 6000 100

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)
Average monthly
expenses for the year
2013
(RM)
Food 1200 1500
Accomodation
(Rental / Loan)
2400 2400
Transportation
(Petrol / Loan / Bus fare etc)
500 600
Clothing 70 90
Education 400 600
Recreation 100 120
Utilities
350 450
Medication 100 120
Miscellaneous 120 120
TOTAL 5240 6000


Page
16

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

IV. COMPOSITE INDEX

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

= 1166 / 100
=RM 116.66

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17

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.


Page
18

PART
3


Page
19

I. THE PRICES OF TELEVISIONS BY CASH PAYMENT

Brand
Size of
Television
(inches)
Price (RM)

Mean
Price
(RM)
Standard
Deviation
(RM) Shop A Shop B Shop C
Samsung
24 419.00 415.90 414.00 416.30 2.06
32 539.95 519.00 539.00 532.65 9.66
40 785.00 790.00 786.00 787.00 2.16
Panasonic
24 415.00 420.00 417.00 417.30 5.70
32 538.00 539.00 535.00 537.30 6.20
40 734.00 755.00 741.00 743.30 11.20

i. MEAN
x
x
n

SAMSUNG
1. 24 inches =

= RM 416.30
2. 32 inches =

= RM 532.65

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20

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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21

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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22

PANASONIC
1. 24 inches

()

= RM 5.70
2. 32 inches

()

= RM 6.20
3. 40 inches

()

= RM 11.20


Page
23

II. THE PRICES OF TELEVISIONS BY INSTALLMENT

Brand
Size of
Television
(inches)
Price (RM)

Mean
Price
(RM)
Standard
Deviation
(RM) Shop A Shop B Shop C
Samsung
24 838.00 831.80 828.00 832.60 4.10
32 1079.90 1038.00 1078.00 1065.00 31.80
40 1570.00 1580.00 1572.00 1574.00 4.30
Panasonic
24 830.00 840.00 835.00 835.00 4.10
32 1076.00 1079.00 1070.00 1075.00 3.70
40 1460.00 1510.00 1482.00 1484.00 20.50

i. MEAN
x
x
n

SAMSUNG
1. 24 inches =

= RM 832.60
2. 32 inches =

= RM 1065.00


Page
24

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


Page
25

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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26

PANASONIC
1. 24 inches

()

= RM 4.10
2. 32 inches

()

= RM 3.70
3. 40 inches

()

= RM 20.50


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27

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.

Page
28

PART
4


Page
29

(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

Item
Average Monthly
2013
(to the nearest RM)
Modified Average
Monthly Expenditure for
the year 2013
(to the nearest RM)
Food 1500 1400
Accomodation
(Rental / Loan)
2400 2400
Transportation
600 550
Clothing 90 80
Education 600 600
Recreation 120 80
Utilities
450 440
Medication 120 120
Miscellaneous 120 110
TOTAL 6000 5780
EXTRA 0 220

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.


Page
30

(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.

Item
Average Monthly
2013
(to the nearest RM)
Percentage of
monthly expenses
(to the nearest %)
Food 600.00 24
Accomodation
(Rental / Loan)
400.00 16
Transportation
300.00 12
Clothing 100.00 4
Education 200.00 8
Recreation 100.00 4
Utilities
250.00

10
Medication 100.00 4
Miscellaneous 100.00 4
Savings 250.00 10
Contributions to parents 100.00 4
TOTAL 2500.00 100


Page
31

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.


Page
32

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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