CHARTERED ACCOUNTANTS EXAMINATIONS

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TECHNICIAN LEVEL
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T3: MATHEMATICS AND STATISTICS

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WEDNESDAY 16 DECEMBER 2015

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TOTAL MARKS – 100; TIME ALLOWED: THREE (3) HOURS

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INSTRUCTIONS TO CANDIDATES

1. You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when to
start writing.

2. This paper is divided into TWO sections:

Section A: Ten (10) Multiple Choice Compulsory Questions.
Section B: Five (5) Optional questions. Attempt any four (4) questions.

3. Enter your student number and your National Registration Card number on the front of
the answer booklet. Your name must NOT appear anywhere on your answer booklet.

4. Do NOT write in pencil (except for graphs and diagrams).

5. Cell Phones are NOT allowed in the Examination Room.

6. The marks shown against the requirement(s) for each question should be taken as an
indication of the expected length and depth of the answer.

7. All workings must be done in the answer booklet.

8. Formulae are provided in a separate booklet.

9. Graph paper (if required) is provided at the end of the answer booklet.
SECTION A

Attempt all TEN sub-questions in this section

QUESTION ONE (MULTIPLE CHOICE QUESTIONS)

Each of the following questions has only one correct answer. Write the letter of the correct
answer you have chosen in your answer booklet. Marks allocated are indicated against each
question.
2x
1.1 Simplify 8 3
 42  x

A. 32
B. 12
C. 16
D. 2 (2 marks)

1.2 If 75% of questionnaires distributed in a survey are returned completed, what is the
probability that a questionnaire (chosen at random) is not returned?

A. 0.75
B. 0.25
C. 0.15
D. 0.20 (2 marks)

1.3 Which of the following can NOT be answered from a regression equation?

A. Predict the value of y at a particular value of x.

B. Estimate the slope between y and x
C. Estimate whether the linear association is positive or negative
D. Estimate whether the association is linear or non-linear (2 marks)

1.4 How much must Kayula save each month in order to buy a new car for K36,000 in three
years if the interest rate is 6% compounded monthly?

A. K915.19
B. K2,160.00
C. K6,000.00
D. K875.31 (2 marks)
1.5 If the mean, median and the mode all have the same value, then the associated
histogram is

A. Non Symmetric
B. Skewed left
C. Skewed right
D. Symmetric (2 marks)

1.6 Solve the quadratic equation 2 x2  3x  4  0 giving your answer correct to 2 decimal
places.

A. x  3.79 or x  1.11
B. x  4.20 or x  3.31
C. x  1.65 or x  3.92
D. x  2.35 or x  0.85 (2 marks)

1.7 The time series component most useful in long term forecasting is the:

A. trend
B. seasonal
C. cyclical
D. Irregular (2 marks)

1.8 The age distribution of employees in a certain manufacturing company is shown below:

Age of 16 20 25 30 40 50
employees(years)
Number of 24 54 82 110 74 62
employees

Evaluate the arithmetic mean age of employees correct to one decimal place.

A. 24.4 years
B. 30.2 years
C. 35.9 years
D. 40.1 years (2 marks)
1.9 Which one of the following is NOT appropriate for studying the relationship between
two quantitative variables?

A. Regression
B. Scatter plot
C. Bar chart
D. Correlation (2 marks)

1.10 How much is K250 after a decrease of 2.5%?

A. K247.50
B. K252.50
C. K175.30
D. K243.75 (2 marks)
[Total: 20 Marks]
SECTION B

Attempt any FOUR questions in this section

QUESTION TWO

(a) Below are the heights of 20 pupils in a school. The heights have been measured correct
to the nearest cm.

133 136 120 138 133

131 127 141 127 144

130 131 125 144 128

134 135 137 133 129

Calculate:
(i) The mean height (3 marks)
(ii) The median height (3 marks)
(iii) The first quartile (3 marks)
(iv) The third quartile (3 marks)
(v) The semi interquartile range (2 marks)

(b) Simplify (2𝑎2 𝑏) ÷ (4𝑎4 𝑏) and find the value of the expression when a  3 .

(2 marks)

(c) In a geometric progression the product of the first and seventh terms is equal to the
fourth term. Given that the sum of the first and fourth terms is 9, find the first term and
the common ratio. (4 marks)

[TOTAL: 20 Marks]
QUESTION THREE

(a) The manager of a small marine discount store believes that prices of marine products
have risen dramatically since 2013. Others disagree with this statement. To investigate,
he selected a few items and recorded the prices and quantities sold in 2013 versus the
prices in 2014 as shown in the table below:

Price Price

Item 2013 2014

Battery K25 K40

Cable K22 K30

Depth Finder K300 K450

Calculate a simple price index for a:

(i) Battery ( 4 marks)
(ii) Cable (4 marks)
(iii) Depth Finder (4 marks)

(b) If the Consumer Price Index (CPI) rises from 110.2 to 115.6, how much money at the
end of the year is required to have the same purchasing power as K1,000 at the
beginning of the year? (5 marks)

(c) Solve the equation x3  4 x  0 (3 marks)

[TOTAL: 20 Marks]
QUESTION FOUR

(a) A scientist, working in an agricultural research station, believes there is a relationship

between the hardness of the shell of eggs laid by chickens and the amount of a certain
food supplement put into the diet of the chickens. He selects ten (10) chickens of the
same breed and collects the data given below:

Chicken A B C D E F G H I J

Food 7.0 9.8 11.6 17.5 7.6 8.2 12.4 17.5 9.5 19.5
supplement
x(g)
Hardness of 1.2 2.1 3.4 6.1 1.3 1.7 3.4 6.2 2.1 7.1
shells y

Required:

(i) Find the equation of the regression line of y on x (10 marks)

(ii) Calculate the correlation coefficient (r). (4 marks)

(b) 3% of the nuts manufactured by a machine are defective. In a box of 10 nuts what is
the probability that:

(i) Only 2 are defective (correct to 4 significant figures) (2 Marks)

(ii) At most 3 are defective (correct to 4 significant figures) (4 marks)
[Total: 20 Marks]

QUESTION FIVE

(a) Solve the simultaneous equation below for 𝑥 and 𝑦

5𝑥 + 4𝑦 = 7

3
𝑥 − 7𝑦 = −2
2

(4 marks)
(b) The rateable value of housing in a given area is approximately normally distributed with
a mean of K2,945 and a standard deviation of K494. In a random selection of 600
houses, how many would you estimate to have rateable values of:

(i) Less than K2,375 (4 marks)

(ii) More than K3,800 (4 marks)

(c) A large bank, in its accounts for three years, showed its profit (in K’000) distribution as
follows:

2010 2011 2012

Profit before taxation 389 311 214
Taxation 139 144 86
Minority 16 16 15
Dividends 34 27 24
Retained profit 200 124 89

You are required to present this information in a component bar chart. (8 marks)
[Total 20 Marks]

QUESTION SIX

(a) Given the following values for a sample:

n = 10, ∑x2 = 84, ∑x = 25,

calculate:

(i) the standard deviation. (4 marks)

(ii) coefficient of variation. (4 marks)

(b) Quarterly sales figures are given below for three years:

QUARTER

1 2 3 4
2011 9 20 10 11
2012 8 7 15 10
2013 12 18 6 5

Find the four-centered trend values. (8 marks)

(c) Two dice are tossed. Find the probability of getting a total score of 8. (4 marks)

[Total: 20 marks]

END OF PAPER
 T3: MATHEMATICS AND STATISTICS

SUGGESTED SOLUTIONS

DECEMBER 2015 EXAMINATIONS

SECTION A

SOLUTION ONE (COMPULSORY)

2x  2x 
3 
2  
2 x 2 2 x
1.1 8 4  2
3  3 

 22 x  242 x
2  
2 x  4 2 x

 22 x 2 x4
 24
 16
The correct answer is C

1.2
75
𝑃(𝑟𝑒𝑡𝑢𝑟𝑛) = 100 = 0.75(75%)

𝑃(𝑁𝑜𝑡 𝑟𝑒𝑡𝑢𝑟𝑛) = 1 − 𝑃(𝑟𝑒𝑡𝑢𝑟𝑛) = 1 − 0.75 = 0.25(25%)

The correct answer is B

1.3 Estimate whether the association is linear or non – linear. The correct answer
is D.

0.06
We are given A  K 36,000, n  3 12   36 and r   0.005 . We want to find R given
12
by

 r 
R  A 
 1  r   1
n

 0.005 
R  36, 000  
 1.005  1 
36

 K 915.19
The correct answer is A
1.5 Symmetric. Therefore the correct answer is D

1.6 2 x 2  3x  4  0
a  2, b  3 and c  4
b  b2  4ac
x
2a
  3   3  4  2  4 
2

x
2  2
3  9  32
x
4
3  41
x
4
3  6.40
x
4
3  6.40 3  6.40
x or x 
4 4
 x  2.35 or x  0.85
The correct answer is D

1.7

The correct answer is A. The trend is a smooth pattern which is useful in long term
forecasting.

1.8

𝑥 16 20 25 30 40 50
𝑓 24 54 82 110 74 62
𝑥𝑓 384 1080 2050 3300 2960 3100

∑ 𝑥𝑓 9904
𝑋̅ = ∑ 𝑓 = 406 = 24.39408867 ≈ 24.4 Years

The correct answer is A

1.9 The bar chart. Therefore, the correct answer is C

1.10 Old  K 250

Percentage change  2.5% (decrease)
 0.025
 New = Percentage change (old) + old
 0.025  250   250
 6.25  250
 K 243.75
The correct answer is D

SECTION B

SOLUTION TWO

(a)
∑𝑥 133+136+⋯129
(i) 𝑥̅ = =
𝑛 20

2,656
=
20
= 132.8

(ii) Arranging the observations in numerical order we have

120, 125, 127, 127, 128, 129, 130, 131, 131, 133, 133, 133, 134,
135, 136, 137, 138, 141, 144, 144

133+133
Median (Q2) =
2

= 133

1 1
(iii) Q1   n  1 value   20  1 value  5.25th value
th th

4 4
129  128  1  5.25  5  1 0.25  0.25  128
 128.25

3
(iv) Q3   20  1 value  15.75th value
th

4
137  136  1 15.75  15  1 0.75  0.75  136
 136.75
Q3  Q1 136.75  128.25 8.5
(v) Semi Interquartile Q   
2 2 2
 4.25
 2𝑎2𝑏
(b) (2a2b) ÷ (4a4b) = 4𝑎4𝑏

1
=
2𝑎2

1
=
2(3)2

1
=
18

(c) The nth term of a Geometric Progression is given by the formula

Tn  ar n1
T1  ar11  a
T7  ar 71  ar 6
T4  ar 41  ar 3
Therefore,
T1  T7  T4
a  ar 6  ar 3
a 2 r 6  ar 3
ar 3  1 --------------equation (1)

T1  T4  9
a  ar 3  9 ----------------equation (2)

Solving equations (1) and (2) simultaneously we obtain

a 1  9
a 8
If a  8 , then
8r 3  1
1
r3 
8
1
r
2
1
Therefore, the first term is 8 and the common ratio is .
2
SOLUTION THREE

new
(a) Simple index  100 , New  2014, Old  2013
old
K 40
(i) Battery  100  160
K 25

K 30
(ii) Cable  100  136.36
K 22

K 450
(iii) Depth Finder  100  150
K 300

(b) 110.2 :115.6  K1000 : x

Create Fraction
110.2 1000

115.6 x

Cross multiplication gives us

110.2  x  115.6 1000
110.2 x  115,600
115, 600
x
110.2
x  K1,049

(c) x3  4 x  0
x  x2  4  0
x  x  2  x  2   0
 x  0 or x  2  0 or x  2  0
Hence, x  0 or x  2 or x  2
SOLUTION FOUR

X Y XY X2 Y2

7 1.2 8.4 49 1.44

9.8 2.1 20.58 96.04 4.41

11.6 3.4 39.44 134.56 11.56

17.5 6.1 106.75 306.25 37.21

7.6 1.3 9.88 57.76 1.69

8.2 1.7 13.94 67.24 2.89

12.4 3.4 42.16 153.76 11.56

17.5 6.2 108.5 306.25 38.44

9.5 2.1 19.95 90.25 4.41

19.5 7.1 138.45 380.25 50.41

SUM 120.6 34.6 508.05 1641.36 164.02

120.6 * 34.6
508.05 
b 10
1641.36 
120.6 
2

10
90.774

186.924
 0.4856

 120.6 
 0.4856
34.6
a 
10  10 
 2.396
 (i) y  2.396  0.486 x

(ii)

10508.05  120.634.6
r
101641.34  120.6 10164.02  34.6 
2 2

907.74

909.9777
 0.998

(b) (i) n=10, p=3%, q= 0.97

P(2) =10C2 X (0.03)2 X (0.97)8

= 45 X 0.0009 X 0.78

= 0.03174

(ii) n=10, p=3%, q= 0.97

P(at most 3 are defective) =p(0) +p(1) +p(2) + p(3)

p(0) =10C0(0.03)0(0.97)10
=0.7374

p(1) =10C1(0.03)1(0.97)9

=0.2281

p(2) =10C2(0.03)2(0.97)8

=0.3174

p(3) =10C3(0.03)3(0.97)7
= 0.002618

P(at most) = 07374+0.2281+0.3174+0.002618

=0.9999
SOLUTION FIVE

(a) Note: Accept any alternative method

5𝑥 + 4𝑦 = 7

3
𝑥 − 7𝑦 = −2
2

Multiply the first equation by 7 and the second equation by four. Adding the two
resulting equations we get

41𝑥 = 41

Therefore, 𝑥 = 1. Substituting this value in the first equation, we get5 + 4𝑦 = 7,

1
hence𝑦 = 2.

Alternatively, the matrix method

The determinant is -41

1 −7 −4
The inverse matrix is - ( 3
5)
41 −
2

x 1 −7 −4 7
( )=− ( )( )
y 41 −3/2 5 −2

x 1 −41
( )=− ( )
y 41 −41/2

(𝑦𝑥 ) = (1/2
1
)

Substitution method

Correct expression of one variable in terms of the other

7 − 4𝑦 7 − 5𝑥
𝑥= 𝑜𝑟 𝑦 =
5 4

Correct substitution in the other expression

 3⁄ (7 − 4𝑦) − 7𝑦 = −2 𝑜𝑟 3𝑥 − 7 (7 − 5𝑥 ) = −2
2 5 2 4

Multiply by 10 gives:3(7-4y)-70y =-20 OR Multiply by 4:6x-49+35x=-8

21-12y-70y=-20 OR 41x-49=-8

-82y = -41 OR 41x = 41

Therefore y=1/2 OR x=1

Substitute x or y in the other expression.

(b)

𝜇 = 2945 ; 𝜎 = 494; 𝑛 = 600

2375−2945
(i) 𝑃(𝑋 < 2375) = 𝑃 (𝑍 < ) = 𝑃(𝑍 > −1.15)
494
= 0.5 − 0.3749 = 0.1251

The required answer is 𝑛 = 600(0.1251) = 75.06 ≈ 75

3800−2945
(ii) 𝑃(𝑋 < 3800) = 𝑃 (𝑍 < ) = 𝑃(𝑍 > 1.73)
494
= 0.5 − 0.4582 = 0.0418

The required answer is 𝑛 = 600(0.0418) = 25.08 ≈ 25

(c)
SOLUTION SIX

(a) (i) Standard deviation = √ (∑x2/n - 𝑥̅ 2)

= √(84/10 – 2.52 )

= √(8.4 -6.25)

= 1.47

(ii) Coefficient of variation = (standard deviation/mean) x 100%

= 1.47/2.5

= 58.8%

(b)

Year Qtr Sales 4 moving totals 4-centred averages

(Trend values)

2011 1 9
2 20 50 12.375
3 10 49 10.625
4 11 36 9.625
2012 1 8 41 10.125
2 7 40 10.5
3 15 44 12.375
4 10 55 12.625
2013 1 12 46 10.875
2 18 41
3 6
4 5

Trend values are: 12.375, 10.625, 9.625, 10.125, 10.5, 12.375, 13.625, and 10.875.
(c) 2nd die

1 2 3 4 5 6

1 (1,1) (1,2) (1,3) (1,4) (1,5) (1,6)

2 (2,1) (2,2) (2,3) (2,4) (2,5) (2,6)

3 (3,1) (3,2) (3,3) (3,4) (3,5) (3,6)

1st die 4 (4,1) (4,2) (4,3) (4,4) (4,5) (4,6)

5 (5,1) (5,2) (5,3) (5,4) (5,5) (5,6)

6 (6,1) (6,2) (6,3) (6,4) (6,5) (6,6)

Pr(total score = 8) = 5/36 = 0.1389

END OF SOLUTIONS