Bcm3a11 Bba3a11 Basic Numerical Methods

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BASIC NUMERICAL METHODS

(BCM3 A11/BBA3 A11)

STUDY MATERIAL

III SEMESTER

CORE COURSE

Bcom/BBA
(2019 ADMISSION ONWARDS)

UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
CALICUT UNIVERSITY P.O.,
MALAPPURAM - 673 635, KERALA

19655
BBA3B05Financial Management

SCHOOL OF DISTANCE EDUCATION


UNIVERSITY OF CALICUT

STUDY MATERIAL
THIRD SEMESTER

Bcom/BBA
(2019 ADMISSION ONWARDS)

COMMON COURSE
BCM3 A11/BBA3 A11: BASIC NUMERICAL METHODS

Prepared by:
1. Dr P Siddeeque Melmuri
Assistant Professor
School of Distance Education
University of Calicut.
2, Sri. Udayakumar O.K,
Associate Professor,
Govt College Madappally

Scrutinised by:
Prof.P.BAIJUMON
Assistant Professor,
Department of Commerce,
Govt. College, Malappuram

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CONTENTS

Modules Contents Page No.

1 Numerical Expressions and Equations

2 Matrices

3 Progressions

4 Interest and Time Value

5 Descriptive Statistics

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Syllabus
Common Course
BBA & BCom – BASIC NUMERICAL METHODS

Objectives:
To enable the students to acquire knowledge of numerical equations,
matrices progressions, financial mathematics and descriptive statistics.
Learning Outcome: On completing the course ,the students will be able
to understand, numerical equations, matrix, progression, financial
mathematics, descriptive statistics and their applications.
Module I: Numerical expressions and Equations:
Simultaneous linear equations (upto three variables), Quadratic equations
in one variable-factorization and quadratic formula
(10 Hours)
Module II Matrices: introduction - type of matrices – - trace and
transpose and determinants - matrix operations –adjoint and inverse –
rank- solving equations by matrices: Cramer’s Rule( not more than Three
variables). (15 Hours)
Module III Sequence, Series and Progression :Concepts
and differences- Arithmetic progression- n th term and sum of n
terms of an AP - Insertion of Arithmetic means in AP - Geometric
progression- ‘n’th term and sum of n terms of an GP - Insertion of
Geometric Mean in GP - Harmonic progression. (20 Hours)
Module IV Interest and Time value : Concept of interest-Types of
interest: Simple interest and compound interest – nominal, real and
effective rate of interest. Future value and Present Value; Annuity and
Perpetuity . Computing future and present values of annuity ( regular and
immediate) - multi and growing period perpetuity. Compound annual
growth rate- computation of Equated Monthly Instalments (EMI).
(15 Hours)
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Module V: Descriptive Statistics: Measures of Central Tendency –
Mean : Arithmetic mean , Geometric mean and Harmonic Mean-
Median ,Mode and other position values. Measures of Dispersion: mean
deviation, quartile deviation, standard deviation and coefficient of
variation. Measures of Skewness and Kurtosis.
(20 Hours)
Reference Books
1 Business Mathematics and Statistics- N G Das & J K Das (Tata
McGraw Hill)
2 Basic Mathematics and its Application in Economics – S. Baruah
(Macmillan )
3 Mathematics for Economics and Business – R. S. Bhardwaj (Excel
Books)
4 Business Statistics – G. C. Beri (Tata McGraw Hill)
5 Fundamentals of Statistics – S.C.Gupta (Himalaya Publishing House
6 SP Gupta ,Statistical Methods, Sultan Chand
7 Dinesh Khattar-The Pearson guide to quantitative aptitude for
competitive examinations.
8 Dr. Agarwal.R.S – Quantitative Aptitude for Competitive
Examinations, S.Chand and Company Limited. 9.. Abhijit Guha,
Quantitative Aptitude for Competitive Examinations, Tata Mcgraw
Hill,
(Theory and problems may be in the ratio of 20% and 80% respectively.
An over view of the topics is expected and only simple problems shall be
given)

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Module I
NUMERICAL EXPRESSIONS AND EQUATIONS

THEORY OF EQUATIONS
An equation is a statement of equality between two expressions.
For eg:‐ x +2 = 5. An equation contains one or more unknowns.
Types of Equations
1)Linear Equation
It is an equation when one variable is unknown.
For example 2x + 3 = 7
Practical Problems
1. Solve 2x + 3 = 7
Ans: 2x = 7 – 3
4
2x = 4, x=2=2

2. Solve 3x + 4x = 35
35
Ans: 7x = 35, x = 7
=5

3. Solve 4 ( x ‐ 2 ) + 5 ( x – 3 ) – 25 = x + 8
Ans: = 4x – 8 + 5x – 15 – 25 = x + 8
= 4x + 5x – x = 8 + 8 + 15 + 25
8x = 56
x = 56/8 = 7
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4. 7x – 21 – 3x + 13 = 7 + 6x – 19
Ans: 7x – 3x – 6x
=7 – 19 + 21 – 13
= ‐ 2x = ‐ 4
2x = 4
4
x=2=2

5. ‐23x + 14 – 7x + 16 = 10x – 17 + 3x + 4

Ans: ‐23x – 7x – 10x – 3x = 17 + 4 – 14 – 16


‐23x = ‐23 23x = 23
x = 23/23 =1
6. Find two numbers whose sum is 30 and difference is 4
Ans: Let one number = x
Then other number = 30 – x
Numbers = (30 –x) – x = 4
‐2x = 4 – 30
‐2x = ‐26 2x = 26
26
x= 2
= 13

∴ numbers are 13, 17


7. Two third of a number decreased by 2 equals 4. Find the number
Ans: Let the number = x

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Then 2/3(x) – 2 = 4

2x – 6 = 12
2x = 12+ 6
2x = 18
x=9
7𝑥+4 −4
8. Solve =
𝑥+2 3

Ans: = 3(7x + 4) = -4 (x + 2 )
= (21x + 12) = ‐ 4x + ‐8

21x + 4x = ‐8 – 12
25x = ‐20
20 4
x = −25 = −5

9. The ages of Hari and Hani are in the ratio of 4 : 5. Eight years from
now, the ratio of their ages will be 5:6. Find their present age?
Ans: Let present age = 4x and 5 x
4𝑥+8 5
After 8 years = 5𝑥+8 = 6

= 6(4x + 8 ) = 5 (5x + 8)
= 24x + 48 = 25x + 40
= 24x – 25x = 40 – 48
= ‐1x =‐8
=x=8
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Present ages of Hari and Hani are Hari = 4x = 4 × 8 = 32 years
Hani = 5x = 5 × 8 = 40 years
2) Simultaneous equations in two unknowns
For solving the equations, firstly arrange the equations. For
eliminating one unknown variable, multiply the equation 1 or 2 or
both of them with certain amount and then deduct or add some
equation with another, we get the value of one variable. Then
substitute the value in the equation, we get the values of
corresponding variable.
PRACTICAL PROBLEMS
1. Solve 3x + 4y = 7
4x – 7 = 3
Ans: 3x + 4y = 7 ‐‐‐‐‐‐ (1)
4x – y = 3 ‐‐‐‐‐‐‐ (2)
Multiply the equation 2 by 4, then
3x + 4y = 7 ‐‐‐‐‐‐‐‐‐ (1)
16x – 4y = 12
Add 19 x = 19
19
x= =1
19

Substitute to value of x
3x + 4y = 7

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3 × 1 + 4y = 7
3 + 4y = 7
4y = 7 – 3 = 4
4y= 4
4
y 4 =1

2. 4x + 2y = 6
5x + y = 6
Ans: 4x + 2y = 6 ‐‐‐‐‐‐‐‐‐‐‐ (1)
5x + y = 6 ‐‐‐‐‐‐‐‐‐‐‐ (2)
Multiply the equation 2 by 2, then
4x + 2y = 6
10x + 2y = 12
‐6x = ‐6 (Deduct 1 – 2)
6x = 6
6
x= 6 =1

5x+ y = 6
5×1+y=6
5 + y = 6, y = 6 – 5 = 1
3. Solve y = 3(x + 1)
4x = 4 + 1
Ans: y = 3x +1
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4x = 4 +1
Arrange the equation
-3x + y = 3 ------- (1)
4x – y = 1 ---------- (2)
1x = 4 Add
x=4
Substituting the value of x
4x – y = 1
16 – y = 1
Y = 16 – 1 = 15
X = 4, y = 15
4. Solve 8x + 7y = 10 11x = 10(1‐y)
Ans: 8x + 7y = 10 ‐‐‐‐‐‐ (1)
11x = 10 – 10 y
11x + 10 y = 10 ‐‐‐‐‐‐‐‐‐ (2)
Multiply equation (1) by 11 and (2) by 8
88x + 77y = 110
88x + 80 y =80
(1-2) -3y = 30
30
y= −3 = -10

Substituting the value of y

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8x + 7y = 10
8x + 7 × -10 = 10
8x + -70 = 10
8x = 10 + 70
80
8x = 80, x = 8 =10

x = 10, y = -10
𝑥−𝑦 𝑦−1 3𝑥−4𝑦
5. Solve 2
= 3
𝑎𝑛𝑑 5
= 𝑥 − 10
𝑥−𝑦 𝑦−1
Ans: 2
= 3

3(x-y) = 2 (y-1)
3x – 3y = 2y – 2
3x – 3y – 2y = -2
3x – 5y = -2 ---------- (1)
3𝑥−4𝑦
5
= 𝑥 − 10

3x – 4 y = 5 (x-10)
3x – 4y = 5x – 50
3x -5x – 4y = -50
2x + 4y = 50
= x + 2y = 25 -------- (2)
Multiply equation (2) by 3
3x – 5y = -2

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3x + 6y = 75
(1 -2 -11y = -77
−77
y = −11 = 7

Substituting the value


x + 2y = 25
x + 2×7 = 25
x = 11
x = 11, y = 7
6. A man sells 7 horses and 8 cows at Rs. 2940/‐ and 5 horses
and 6 cows at Rs. 2150/‐. What is selling price of each?
Ans: Let the selling price of horse = x
Cow = y
7x + 8y = 2940 ------- (1)
5x + 6y = 2150 --------(2)
Multiply equation (1) by 5 and 2 by 7

Then 35x + 40 y = 14700


35x + 42y = 15050
(1‐2) ‐2y = ‐350
−350
y= −2
= 175

Substituting the value of y

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7x + 8y = 2940
7x + 8 ×175= 2940
7x = 2940 – 1400
7x = 1540
1540
x= 7

Selling price of horse = 220


Selling price of cow = 175
3. Simultaneous Equations in three unknowns
Firstly, eliminate one of the unknown from first two equations. Then
eliminate the same unknown from second and third equations. Then
we get two equations. Solve such equations, we get the values of x,
y and z.
1) Solve 4x + 2y – 32 = 2
3x + 4y‐2z = 10
2x – 5y =5
Ans: First consider first two equations and eliminate one unknown
4x + 2y – 3z = 2
3x + 4y – 2z = 10
For eliminating 2 multiply equation in 1 by 2 and 2 by 3, then
8x + 4y ‐62 =4
9x + 12y = 30

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(2‐1) x + 8y = 26 (1)
Consider equation 2 and 3
3x + 4y – 2z = 10
2x – 5y +4z = 5
On multiply xy equals 2 by 2
6x – 8y ‐ 42 = 20
2x – 5y + 42 = 5
add 8x + 3y = 25 (2)
Solve the new equation 1 and 2
x + 8y = 26 (1)
8x + 3y = 25 (2)
Multiply equation 1 by 8, then
8x + 64y = 208
8x + 3y = 25
(1‐2) 61y = 183
Substitute value of Y
x + 8y = 26
x + 8 x 3 = 26
x + 24 = 26
x = 26 – 24 = 2
Substitute the value of x, y,
4x + 2y – 3z = 2
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4 x 2 + 2 x ‐3z = 2
8 + 6 – 3z =2
14 – 3z = 2
3z = 14 – z
3z = 12
z = 12/ 3 = 4
x = 2, y=3, z=4
4. Quadratic equations
The equation of the form ax2 + bx+ c = 0 in which a, b, c are constant is
called a quadratic equation in x. Here x is the unknown.
Solution of quadratic equations
There are three methods to solve a quadratic equation.
1. Method by formula
2. Method of factorization
3. Method of completing the squre
Quadratic formula method
One general quadratic equation is ax2 + bx + c = 0
−𝑏±√𝑏2 −4𝑎𝑐
Then x = 2𝑎

1. Solve the equation x2 — x — 12 = 0


Ans: a = 1, b= ‐1, c=‐12

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−𝑏±√𝑏2 −4𝑎𝑐 −−1±√12 −4×1×−12
x= 2𝑎
= 2×1

49 7
=1±√ = 1±
2 2

= 8/2 or -6/2
= 4 or ‐3
5
2. Solve the equation 2x +𝑥 = 7

Ans: Multiply the equation by x Then


2x2 +5 = 7x
2x2 — 7x + 5 = 0
a = 2, b= ‐7, c=5
−𝑏±√𝑏 2 −4𝑎𝑐
= 2𝑎

−−7±√−72 −4×2×5
= 2×2
9
= 7±√4
10 4
= 4
or 4

= 2/5 or 1
3. Solve the equation ( x + 1) (x +2) — 3 = 0
Ans: x2 + 2x + x + 2 – 3 = 0
x2 +3x + 2 — 3 = 0
x2 + 3 x —1 = 0

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a = 1, b = 3, c= —1
−𝑏±√𝑏 2 −4𝑎𝑐
x= 2𝑎

−3±√32 −4×1×−1
= 2×1
−3±√9−−4
= 2
13
= -3±√
2

4) Solve x4 ‐ 10 x2 + 9 = 0
Ans: Let x 2 = y
Then equation
= y2 — 10y + 9 = 0
−𝑏±√𝑏 2 −4𝑎𝑐
y= 2𝑎

−−10±√−102 −4×1×−9
= 2×1
64
= 10±√
2
8
= 10 ± 2

Y = 9, 1
x2 =y , then x = √y
Y = 1, x= √1 = ±1
Y = 9, x =√9 = ± 3

X = ‐1, 1, 3, ‐3

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5) 2x‐7√x + 5 = 0
Answer = Let√x = y, then equation
2y2 – 7y + 5 = 0
−𝑏±√𝑏 2 −4𝑎𝑐
Y= 2𝑎

−7±√72 −4×2×5
= 2×2
−7±√49−40
= 4
3 10 4
= 7± 4 = 4
𝑜𝑟 4
2
y= 1, x = 1 = 1
10 100 25
y= 4
, x= 16
= 4
25
x = 1, 4

6) Solve x 10
— 33x5 + 32 = 0
Ans: Let y = x5 , Then equation
= y2 — 33y + 32 = 0
Use quadratic formula
Y = 32, 1
Y = 32 then x2 = 32
= 25=32
∴x=2
y = 1 then x5 = 1

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5
= 1 = 1, x = 1
X = 2, 1
7. Solve x + y = 10
xy = 24
Ans: change to equation in the form of quadratic
x + y = 10
x= 10‐y
Substitute the value in second equation
xy = 24
(10‐y) y = 24
=10y –y2 = 24
y2– 10 + 24 = 0
Use quadratic formula
−𝑏±√𝑏 2 −4𝑎𝑐
y= 2𝑎

−10±√102 −4×1×24
= 2×1

−10±√102 −96
= 2
2
= 10 ± 2 = 6, 4
when y = 6, x = 4
y= 4, x = 6
Simultaneous equations of two unknowns when one of them is
quadratic and the other is linear
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1) x+y=7
x2 + y2 = 25
Ans:
x+y=7
y=7–x
Substistue the value of y, y in the second equation, then
x2 + (7— x)2 = 25
We know (a— b)2 = a2 ‐2ab+b2
x2 + 72‐ 2 x 7 x x + x2 = 25
x2 + 49 – 14x + x2 = 25
x2 + x2 ‐ 14x + 49 – 25
2x2‐14x + 24 = 0
Use quadratic formula
−𝑏±√𝑏 2 −4𝑎𝑐
Y= 2𝑎

−−14±√−142 −4×2×24
= 2×2
14±√4
4
2
= 14± 4 =4, 3

When y= 4, x = 3
Y=3, x=4
2. Solve x + y = 5
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2 x2 ‐ y2 ‐ 10x – 2xy – 28 = 0
Ans: y = 5‐ x
Substitute the value of y in equation (2)
2 x2 ‐ (5- x)2 – 10x – 2x(5 - x)+ 28 = 0
= 3x2 -10x+ 3 = 0
Use quadratic formula
1
X = 3 or 3

When x = 3, y =2
1 14
When x = , y =
3 3

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Module II
MATRICES
Matrices
A matrix is an ordered rectangular array of numbers or functions. It
is a rectangular presentation of numbers arranged systematically in
rows and columns one number or functions are called the elements
of the matrix. The horizontal lines of elements of the matrix are
called rows and vertical lines of elements of matrix are called
columns.
Order of Matrix
A matrix having ‘m’ rows ‘n’ columns are called a matrix of order
‘m x n’ or simply ‘m x n’ matrix (read as an ‘m’ by ‘n’ matrix)
Types of Matrices
(i) Rectangular matrix : Any matrix with ‘m’ rows and ‘n’ column
is called a rectangular matrix. It is a matrix of Order m x n. For
example,
1 2 3 4
A= 2 1 2 1 is a 3 x 4 matrix
3 2 1 2
(ii) Square matrix : A matrix by which the number of rows are
equal to the number of columns, is said to be a square matrix. Thus
an m x n matrix is said to be square matrix if m= n and is known as
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BBA3B05Financial Management
a square matrix of order ‘n’. For example,
2 6 1
A = [1 8 4] is a square matrix of order 3
5 4 0
(iii) Row matrix : A matrix having only one row is called a row
matrix. For example,
A = [1 2 3 ]is a row matrix.
(iv) Column matrix : A matrix having only column is called
column matrix. For example,
1
A = [2] is a column matrix.
3
(v) Diagonal matrix: A square matrix is said to be diagonal it all
elements except leading diagonal are zero. Elements a11, a22, a33
etc. termed as leading diagonal of a matrix. Example of Diagonal
matrix is
2 6 1
A = [1 8 4] is a diagonal matrix. Leading diagonal elements
5 4 0

are 2, 8, 0.
(vi) Scalar Matrix : A diagonal matrix is said to be scalar matrix,
if its diagonal elements are equal. For example.
2 6 1
A = [1 2 4]
5 4 2
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(vii) Unit matrix of identity matrix : A diagonal matrix in which
diagonal elements are 1 and rest are zero is called Unit Matrix or
identity matrix. It is denoted by 1.
1 0 0
A = [0 1 0] is a Unit matrix or Identity matrix.
0 0 1
(viii) Null Matrix or Zero matrix: A matrix is said to be zero or
null matrix if all its elements are zero. For example
0 0 0
A = [0 0 0] is a Null matrix or Zero matrix
0 0 0
(ix) Triangular matrix: If every element above or below the
leading diagonal is zero, the matrix is called Triangular matrix. It
may be upper triangular or lower triangular. In upper triangular all
elements below the leading diagonal are zero and in the lower
triangular all elements above the leading diagonal are zero. For
example,
1 6 1
A = [0 8 4] is a matrix of upper triangular.
0 4 2
2 0 0
A = [1 8 0] is matrix of lower triangular
5 4 1
(x) Symmetric matrix : Any square matrix is said to be symmetric
if it is equal to transpose. That is, A = At

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Transpose of a matrix as a matrix obtained by interchanging its
rows and columns. It is denoted by At or A1. Example of symmetric
matrix
2 1 2 1
A= [ ] ,= [ ]
1 4 1 4
(xi) Skew Symmetric Matrix : Any square matrix is said to be
skew symmetric if it is equal to its negative transpose. That is A =
‐At
0 2 3
For example A = [−2 0 −4] = At
−3 4 0
0 −2 −3
t
A =[2 0 4]
3 −4 0
0 2 3
- t
A = [−2 0 −4]
−3 4 0
OPERATION OF MATRICES
Operation of matrices relate to the addition of matrices, difference,
multiplication of matrix by a scalar and multiplication of matrices.
Addition of matrices: If A and B are any two matrices of the same
order, their sum is obtained by the elements of A with the
corresponding elements of B.
For example :

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8 −6 2 −5 2 3
A = [−7 3 2] B = A = [−3 −2 1]
−4 3 2 3 −2 2
3 −4 5
Then A + B = A = [−10 1 3]
−1 1 4
Difference of Matrices : if A and B are, two matrices of the same
order, then the difference is obtained by deducting the element of B
from A.
1 2 3 3 −1 3
If A = [ ] B=[ ]
2 3 1 −1 0 2

−2 3 0
Then A- B = [ ]
3 3 −1
Multiplication of a Matrix by a Scalar
The elements of Matrix A is multiplied by any value (ie. K) and
matrix obtained is denoted byK
1 2 3
For example : A = [2 3 1]
2 2 1
5 10 15
Then 5A = [10 15 5]
10 10 5

Practical Problems
0 2 3 7 6 3
1) If A = [ ] ,𝐵 = [ ] find A-B?
2 1 4 1 4 5
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06 9
Ans: 3A = [ ]
63 12
0 6 9 7 6 3
3A –B = [ ]-[ ]
6 3 12 1 4 5
−7 0 6
=[ ]
5 −1 7
(2) Solve the equation:
𝑥 𝑦 −11 3 5
2[ ] +3[ ] = 5[ ]
𝑧 𝑡 2 0 4 6
𝑥 𝑦 2𝑥 2𝑦
Ans: 2 [ ] = [ ]
𝑧 𝑡 2𝑧 2𝑡

2 1 3 −3
3[ ]=[ ]
1 4 0 6
3 5 15 25
5[ ]= [ ]
4 6 20 30
2𝑥 2𝑦 3 −3 15 25
∴[ ] + [ ]= [ ]
2𝑧 2𝑡 0 6 20 30
12
2x+3 = 15, 2x = 15 -3 =12, x= 2
=6
28
2y+ -3 = 25, 2y = 25+3 = 28, y 2
= 14
20
2z+0 = 20, 2z = 20 , z = 2
= 10
24
2t+6 = 30, 2t = 30 -6 =24, t = = 12
2

(3) Find the value of a, b if


𝑎 5 ] + [3 −4 7 6
2 ×[ ] =[ ]
7 𝑏−3 1 2 15 14
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Ans: 2 ×[
𝑎 5 ] = [2𝑎 10 ]
7 𝑏−3 14 2𝑏 − 6
2𝑎 10 3 −4 7 6
[ ]+ [ ] =[ ]
14 2𝑏 − 6 1 2 15 14
4
2a+3 = 7, 2a = 7 - 3 =4, a = 2 = 2
18
2b-6+2 = 14, 2b = 14+ 6 -2 =18, b = 2
=9
24
2t+6 = 30, 2t = 30 -6 =24, t = 2
= 12

Multiplication of two matrices


For multiplication, take each row of the left hand side matrix with
all colums of the right hand side matrix.
For example
𝑎 𝑏 𝑒 𝑓 𝑎𝑒 + 𝑏𝑔 𝑎𝑓 + 𝑏ℎ
A=[ ] 𝐵= [ ] 𝑡ℎ𝑒𝑛 𝐴𝐵 = [ ]
𝑐 𝑑 𝑔 ℎ 𝑐𝑒 + 𝑑𝑔 𝑐𝑓 + 𝑑ℎ
Practical Problems
2 3 1
1 2 3
(1) Let A = [ ] , 𝐵 = [5 4 2] Compute AB
−2 1 4
1 5 3
Ans: AB =
1×2+2×5+3×1 1×3+2×4+3×5 1×1+2×2+3×3
[ ]
−2 × 2 + 1 × 5 + 4 × 1 −2 × 3 + 1 × 4 + 4 × 5 −2 × 1 + 1 × 2 + 4 × 3
2 + 10 + 3 3 + 8 + 15 1+4+9
AB =[ ]
−4 + 5 + 4 −6 + 4 + 20 −2 + 2 + 12
15 26 14
AB = [ ]
5 18 12

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1 2 −2 2
(2) Let A = [ ] 𝑎𝑛𝑑 𝐵 = [ ] Find AB and BA and
3 4 1 −1
hence show that AB≠ BA.
1 × −2 + 2 × 1 1 × 2 + 2 × −1
Ans: AB = [ ]
3 × −2 + 4 × 1 3 × 2 + 4 × −1
−2 + 2 2 + −2
=[ ]
−6 + 4 6 + −4
0 0
=[ ]
−2 2
−2 × 1 + 2 × 3 −2 × 2 + 2 × 4
BA = [ ]
1 × 1 + −1 × 3 1 × 2 + −1 × 4
−2 + 6 −4 + 8
=[ ]
1 + −3 2 + −4
4 4
=[ ]
2 −2
Therefore, AB≠ BA
0 6 7 0 1 1 2
(3) Let A = [−6 0 8] , B = [1 0 2] , C = [−2]
7 −8 0 1 2 0 3
Calculate AC, BC and (A+B)C and verify that (A+B)C = AC +
BC.
0 − 12 + 21 9
Ans: AC = [−12 + 0 + 24] = [12]
14 + 16 + 0 30
0 − 2 +3 1
BC = [ 2 + 0 + 6] = [ 8 ]
2 − 4 +0 −2

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0 7 8
A+B = [ −5 0 10]
8 −6 0
0 − 14 + 24 10
(A+B)C = [−10 + 0 + 30] = [20]
16 + 12 + 0 28
10
AC+BC = [20]
28
∴ (A+B)C = AC +BC
2 5 4 −5
(4) Let A = [ ] B =[ ] What is the value of ‘k’ if any
−3 1 3 𝑘
make AB = BA
23 −10 + 5𝑘
Ans: AB = [ ]
−9 15 + 𝑘
23 −10 + 5𝑘
BA = [ ]
6 − 3𝑘 15 + 𝑘
AB = BA
-10+5k =15
5k = 15+10 =25
𝟐𝟓
∴k= 𝟓
=𝟓

(5) Two shops have the stock of large, medium and small size of a
tooth paste. The number of each size stocked is given by the matrix
A, where

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𝑙𝑎𝑟𝑔𝑒 𝑚𝑒𝑑𝑖𝑢𝑚 𝑠𝑚𝑎𝑙𝑙
𝑠ℎ𝑜𝑝 𝑁𝑜.1
A = [ 150 240 120 ] 𝑠ℎ𝑜𝑝 𝑁𝑜.2
90 300 210
are cost matrix 1 of the different size of the tooth paste is given by
cost (Rs.)
14 𝑙𝑎𝑟𝑔𝑒
B = [10 𝑚𝑒𝑑𝑖𝑢𝑚]
6 𝑠𝑚𝑎𝑙𝑙
Find the investment in the toothpaste by each shop.
Ans : Investment = AB
14
150240 120
AB = [ ] × [10]
90300 210
6
2100 + 2400 + 720
=[ ]
1260 + 3000 +1260
5220
=[ ]
5220
Investment in toothpaste by
Shop 1 = 5220
Shop 2 = 5520
(6) In a large legislative Assembly electron, a political group hired
a public relations firm to promote its candidate in three ways;
telephonic, housecalls, and letters. The cost per contract (in paise)
is given in matrix A as.
Cost per contract

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40 𝑡𝑒𝑙𝑒𝑝ℎ𝑜𝑛𝑒
A = [ 100 ℎ𝑜𝑢𝑠𝑒 𝑐𝑎𝑙𝑙 ]
50 𝑙𝑒𝑡𝑡𝑒𝑟
The number of contract of each type made in two cities X and Y is
given by
𝑡𝑒𝑙𝑒𝑝ℎ𝑜𝑛𝑒 ℎ𝑜𝑢𝑠𝑒 𝑐𝑎𝑙𝑙𝑠 𝑙𝑒𝑡𝑡𝑒𝑟 𝑥
B = [ 1000 500 5000 ] 𝑦
3000 1000 10000
Find the total amount spent by the group in the two cities x and y ?
Amount spent = BA
40
1000 500 5000
BA = [ ] × [100]
3000 1000 10000
50
40000 + 50000 + 250000
=[ ]
120000 + 100000 +500000
340000
=[ ]
720000
Amount spent by
City X = 3,40,000 paise i.e. 3400/‐
City Y = 7,20,000 paise i.e. 7200/‐
Determinants
A determinant is a compact form showing a set of numbers
arranged in rows and columns, the number of rows and the number
of columns being equal. The number in a determinant are known as
the elements of the determinant.

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Matrics which are not square do not have determinants.
Determinant of Square matrix of order 1
The determinants of 1 x 1 matrix A [a] is denoted by |A| or det. A
(i.e. determinant of A) and its value is a.
Determinant of Square matrix of order 2
𝑎 𝑏
Let A = [ ] be a matrix of order 2 x 2
𝑐 𝑑
Then the determinant A is defined as

|A|= [𝑎 𝑏
] = ad – bc
𝑐 𝑑
Determinant with 3 rows and columns
𝑎 𝑏 𝑐
Let A = [ 𝑑 𝑒 𝑓] be a matrix of order 3 x 3.
𝑔 ℎ 𝑖
Then the determinant A is defined as
𝑒 𝑓 𝑑 𝑓 𝑑 𝑒
|A| =𝑎 | |- b| |𝑐| |
ℎ 𝑖 𝑔 𝑖 𝑔 ℎ
ie. a(ei - hf) - b(di - gf) + c (dh - ge)
Practical Problems
1) Evaluate the determinant
2 −3
| |
4 9
2 −3
Ans: | | = 2× 9 − 4 × −3
4 9
= 18 + 12 = 30
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2) Find the value of the determinant
1 2 −3
| 2 −1 2 |
3 2 4
1 2 −3
−1 2 2 2 2 −1
Ans: | 2 −1 2 | = 1 | | -2 | | − 3| |
2 4 3 4 3 2
3 2 4
= 1(-4 -4) – 2 (8 - 6) – 3 (4- -3)
= 1 (‐8) - 2 (2) – 3 (7)
= ‐8 – 4 – 21 = ‐33
Singular and Non singular matrices – A square matrix ‘A’ is said
to be singular if its determinant value is zero. If |A| ≠ 0, then A is
called non‐singular.
Minor elements of a matrix:
Minor element is the determinant obtained by deleting its rows and
the column in which element lies.
Example – (1) Find the Minor of element 6 in the
1 2 −3
determinant A =| 2 −1 2 |
3 2 4
1 2
Ans : Minor of 6 = | |
7 8
=1x8–2x7
= 8 – 14 = ‐ 6

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3 1 2
2) If A = | 2 1 0| Find the minor of 3
4 2 0
1 0
Ans: Minor of 3 =| |
2 2
=1x2–0x2=2–0=2
Cofactor of an element
Co‐factor of an element is obtained by multiplying the minor of
that element with (‐1) ( i + j) .
Where i = the row in which the element belongs, s = the column in
which the element belongs.
Co‐factpr of an element = Minor of an element X (‐1)i+j
Example 1. Find the Co‐factors of all the element of the
1 −2
determinant| |
4 3
Ans : Minor element
1 = 3, ‐2 = 4
4 = ‐2, 3= 1
Co‐factors 1 = 3 x ‐11+1 = 3 x ‐12 = 3
‐2 = 4 x ‐1 1 + 2 = 4 x ‐13 = ‐4
4 = ‐2 x ‐12+1 = ‐2 x ‐13 = 2
3 = 1 x ‐1 2+2 = 1x ‐14 = 1
2) Find the co‐factors of the elements of the determinant
2 −3 5
|6 0 4 | and verify that a11 A31 + a12 A32 + a13 A33 = 0
1 5 −7
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Ans : Minor of an element :
0 4
2=| | = (0 × ‐7) – (4 × 5)= 0 – 20 = ‐20
5 −7
6 4
-3 = | | = (6 × ‐7) – (4 × 1)= -42 – 4 = ‐46
1 −7
6 0
5=| | = (6 × 5) – (0 × 15)= 30 – 0 = 30
1 5
−3 5
6=| | = (-3 × ‐7) – (5 × 5)= 21 – 25 = -4
5 −7
2 5
0=| | = (2 × ‐7) – (5 × 1)= -14 – 5 = ‐19
1 −7
2 −3
4=| | = (2 × 5) – (5 × 1)= 10 – -3 = 13
1 5
−3 5
1=| | = (-3 × 4) – (5 × 0)= -12 – 0 = ‐12
0 4
2 5
5=| | = (2 × 4) – (5 × 6)= 8 – 30 = ‐22
6 4
2 −3
-7 = | | = (2 × 0) – (-3 × 6)= 0 – -18 = 18
6 0
Co‐factors:
2 = ‐20 x ‐11+1 = ‐20 x ‐12 = ‐20
‐3= ‐46 x ‐1 1+2 = ‐46 x ‐13 = 46
5 = 30 x ‐11+3 = 30 x ‐14 = 30
6 = ‐4 x ‐12+1 = ‐4 x ‐13 = 4
0 = ‐19 x ‐1 2+2 = ‐19 x ‐14 = ‐19
4 = 13 x ‐12+3 = 13 x ‐15 = ‐13

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1 = ‐12 x ‐13+1 = ‐12 x ‐14 = ‐12
5 = ‐22 x ‐13+2 = ‐22 x ‐15 = 22
‐7 = 18 x ‐13+3 = 18 x ‐16 = 18

a11 = 2, a12= ‐3, a13= 5


A31 = ‐12, A32 = 22, A33 = 18
a11 A31 + a12 A32 + a13 A33 = 0
i.e., = 2 x ‐12 + ‐3 x 22 + 5 x 18
= ‐24 + ‐66 + 90
= ‐90 +90 = 0
Adjoint Matrix
Adjoint of a given matrix is the transpose of the matrix formed by
co‐factors of the elements. It is denoted by Adj A.
𝑎11 𝑎12 𝑎13
Let A= [ 𝑎21 𝑎22 𝑎23 ]
𝑎31 𝑎32 𝑎33
𝐴11 𝐴12 𝐴13
then Adj A= Transpose [ 𝐴21 𝐴22 𝐴23 ]
𝐴31 𝐴32 𝐴33
𝐴11 𝐴21 𝐴31
= [ 𝐴12 𝐴22 𝐴32 ]
𝐴13 𝐴23 𝐴33
Practical Problems
2 3
1) Find adj A for A = | |
1 4
Ans: Minor element:
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2 = 4, 3 = 1, 1 = 3, 4 = 2
Co‐factors:
2 = 4 x ‐11+1 = 4, 3 = 1 x ‐11+2 = ‐1
1 = 3 x ‐12+1 = ‐3, 4 = 2 x ‐12+2 = 2
4 −1
adj A = Transpose = | |
−3 2
4 −3
=| |
−1 2
2 1 3
2) Find adj A for A = [ 3 1 2]
1 2 3
Ans: Minor element:
2 = ‐1, 1 = 7, 3=5
3 = ‐3, 1 = 3, 2=3
1 = ‐1, 2 = ‐5, 3 = ‐1
Co‐factor elements
2 = ‐1 x ‐11+1 = ‐1, 1 = 7 x ‐11+2 = ‐7
3 = 5 x ‐11+3 = 5
3 = ‐3 x ‐12+1 = 3, 1 = 3 x ‐12+2 =3
2 = 3 x ‐12+3 = ‐3
1 = ‐1 x ‐13+1 = ‐1, 2 = ‐5 x ‐13+2 = 5
3 = ‐1 x ‐13+3 = ‐1

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−1 −7 5
adj A = Transpose = [ 3 3 −3]
−1 5 −1
−1 3 −1
= [−7 3 5]
5 −3 −1
Invertible Matrix and Inverse of a Matrix
Let A be a square matrix of order n, if there exist a square matrix B of
order n, such that AB = BA = I
Then A is said to be convertible and B is called on inverse of A and A is
called inverse of B
Where I = Identity Matrix
Inverse of A is denoted by A‐1
1
A‐1 = |A| adj A or
adj A
A‐1 = |A|

2 −1
1) Find the inverse matrix A = [ ]
1 3
Ans: |A| = (2 x 3 – 1 x ‐1) = 6 – ‐1 = 7
Minor element:
2 = 3, ‐1 = 1, 1 = ‐1, 3 = 2
Co‐factors element
1+1 1+2
2 = 3 x ‐1 = 3, ‐1 = 1 x ‐1 = ‐1

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1 = ‐1 x ‐12+1 = 1, 3= 2 x ‐12+2 = 2
3 −1
adj A = Transpose [ ]
1 2
3 1
adj A = [ ]
−1 2
1
A‐1 = |A| adj A
1 3 −1
A‐1 = [ ]
7 1 2
𝟑 −𝟏
𝟕 𝟕
=[ 𝟏 𝟐 ]
𝟕 𝟕

1 2 5
2. Compute the inverse of [ 2 3 1]
−1 1 1
Ans. |A| = 1(3‐1) ‐2(2‐ ‐1) + 5 (2‐‐3)
= 1(2) – 2(3) + 5(5)
= 2 – 6 + 25 = 21
Minor element:
1 = 2, 2 = 3, 5 = 5

2 = ‐3, 3 = 6, 1 = 3
‐1= ‐13, 1 = ‐9, 1 = ‐1

Co‐factors element
1+1 1+2 1+3
1 = 2 x ‐1 = 2, 2 = 3 x ‐1 = ‐3, 5 = 5 x ‐1 =5

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1+2 2+2 2+3
2 = ‐3 x ‐1 = 3, 3 = 6 x ‐1 = 6, 1 = 3 x ‐1 = ‐3
3+1 3+2 3+3
‐1= ‐13 x ‐1 = ‐13, 1 = ‐9 x ‐1 = 9, 1 = ‐1 x ‐1 = ‐1
2 −3 5
Adj A = Transpose [ 3 6 −3]
−13 9 −1
1
A‐1 = |A| adj A

2 3 −13
1
= 21 [−3 6 9 ]
5 −3 −1
2 3 −13
21 21 21
−3 6 9
= [ 21 21 21 ]
5 −3 −1
21 21 21

Solving simultaneous equations with the help of Matrices


Firstly, express the equation in the form of AX = B
Then possibilities When |A| ≠0
Then X = A‐1B i.e., the system has a unique solution.
therefore the system is consistant.
1
A‐1 = |A| adj A

When |A| = 0
Then we calculate (adj A)B
If (adj A)B = 0, then the system will have infinite solution were
the system is consistent.
[[

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If (adj A)B ≠ 0, then the system will have no solution.
Problem
1) Solve the linear equation by using matrix
5x + 2y = 4
7x + 3y = 5
Ans: AX = B
𝑥
Let A= [5 2], X = [𝑦]
7 3
4
B= [ ]
5
|A| = (15 – 14) = 1
i.e., 1 ≠ 0
Then X = A–1B
1
A‐1 = |A| adj A

𝐚𝐝𝐣 𝐀 :
Minor element 5 = 3, 2 = 7, 7 = 2, 3 = 5
Co‐factors element 5 = 3, 2 = ‐7, 7 = ‐2, 3 = 5
3 −7 3 −2
adj A = Transpose [ ]=[ ]
−2 5 −7 5
1 1 3 −2
A‐1 = |A| adj A = 1 [ ]
−7 5
3 −2
=[ ]
−7 5
3 −2 4
X = A‐1 B = [ ] ×[ ]
−7 5 5
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12 −10 2
X=[ ]= [ ]
−28 25 −3
2 𝑥
X= [ ] = [𝑦]
−3
x= 2 y = -3
2) Solve the equation by using matrix
x–y+z=4
2x + y – 3z = 0
x+y+z=2
Ans: AX = B
1 −1 1 𝑥
Let A = [2 1 −3 ] , X = [ 𝑦]
1 1 1 𝑧
4
B = [0]
2
|A| = 1(1+3) – (‐1) (2+3) +1(2‐1)
= 1(4) +1(5) +1(1)
= 4 + 5 + 1 = 10 ie ≠0
Then X = A‐1B
1
A‐1 = |A| adj A

Factor elements:
1 = 4, ‐1 = ‐5, 1=1
2 = 2, 1=0 ‐3 = ‐2

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1 = 2, 1 = 5, 1 =3
4 −5 1 4 2 2
Adj A = Transpose [2 0 −2] = [−5 0 5]
2 5 3 1 −2 3

X = A‐1B
1
A‐1 = |A| adj A

4 2 2
1
= 10 [−5 0 5]
1 −2 3
4 2 2 4
1
X = A‐1B = 10 [−5 0 5] × [0]
1 −2 3 2
16 + 0 + 4
1
= 10 [−20 + 0 + 10]
4 + 0+ 6
20 2
1
= 10 [−10] =[−1]
10 1
2
x = [−1]
1
ie., x = 2, y= -1, z = 1
3) Solve the following equation by using matrix
5x – 6y + 4 z = 15
7x + 4y – 32 = 19

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2x + y + 6 z = 46
Ans: AX = B
5 −6 4 𝑥
Let A = [7 4 −3] , X = [𝑦]
2 1 6 𝑧
15
B = [19]
46
|A| = 5(24 ‐ ‐3) ‐ ‐6 (42 ‐ ‐6) + 4 (7 – 8)
= 5(27) + 6(48) + 4(‐1)
= 135 +288 – 4 = 419
Then X = A–1B
Then X = A–1B
1
A‐1 = |A| adj A

Co‐factor elements:
5 = 27, ‐6 = ‐48, 4 = ‐1
7 = 40, 4 = 22, ‐ 3 = ‐17
2 = 2, 1 = 43, 6 = 62
27 −48 −1 27 40 2
Adj A = Transpose [40 22 −17] = [−48 22 43]
2 43 62 −1 −17 62
X = A–1B
1
A‐1 = |A| adj A

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27 40 2 15
1
=419 [−48 22 43] × [19]
−1 −17 62 46

1257
1
= 419 [1676]
2514
3
= [6 ]
4
−3
X=[ 6 ]
4
∴ x = 3, y = 4, z = 6
Cramer’s rule
Cramer’s rule is a method for solving linear simultaneous
equations. It makes use of determinants and so knowledge of these
is necessary before proceeding.

Cramer’s Rule - two equations


If we are given a pair of simultaneous equations
a1x + b1y = d1
a2x + b2y = d2
then x, and y can be found from

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𝑑1 𝑏1 𝑎1 𝑑1
𝑑 𝑏 𝑎 𝑑
x= |𝑎12𝑏21 | y= |𝑎21 𝑏12 |
𝑎2 𝑏2 𝑎2 𝑏2

Example
Solve the equations
3x + 4y = −14
−2x − 3y = 11
Ans:
Using Cramer’s rule we can write the solution as the ratio of two
determinants.
−14 4
−2
x= | 311 −3
4 | = =2
−1
−2 −3
3 −14
5
y = | −2
3
11
4| = −1 = −5
−2 −3

The solution of the simultaneous equations is then x = 2, y = −5.

Cramer’s Rule for solving 3× 𝟑 𝐬𝐲𝐬𝐭𝐞𝐦𝐬


Consider the system
a1x + b1y + c1z = d1
a2x + b2y + c1z = d2
a3x + b3y + c3z = d3
Let the four determinants D, Dx, Dy and Dz be defined as

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𝑎1 𝑏1 𝑐1 𝑑1 𝑏1 𝑐1
D= |𝑎2 𝑏2 𝑐2 | Dx= |𝑑2 𝑏2 𝑐2 |
𝑎3 𝑏3 𝑐3 𝑑3 𝑏3 𝑐3
𝑎1 𝑑1 𝑐1 𝑎1 𝑏1 𝑑1
Dy= |𝑎2 𝑑2 𝑐2 | Dz = |𝑎2 𝑏2 𝑑2 |
𝑎3 𝑑3 𝑐3 𝑎3 𝑏3 𝑑3
Then, if D ≠ 0, the system has a unique solution of
Dx Dy Dz
x= D
x= D
x= D

Exercise
Use Cramer’s rule to solve the following sets of simultaneous
equations.
Solve the system by using Cramer’s Rule
x – y + 2z = -4
3x + y -4z = -6
2x + 3y – 4z =4

Solution:
The first thing we need to do here is to evaluate all of the
corresponding determinants. We start with the coefficient
determinant.
𝑎1 𝑏1 𝑐1 1 −1 2
𝑎
D= | 2 𝑏2 𝑐2 | = | 3 1 −4| = 1|1 −4| - (-1) |3 −4|
𝑎3 𝑐3 3 −4 2 −4
𝑏3 2 3 −4

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3 1
+2| |
2 3
= (-4 + 12) + (-12+8) + 2(9-2)
= 8 – 4 +14 = 18

Now we compute the other determinants


𝑑1 𝑏1 𝑐1
𝑑
Dx= | 2 𝑏2 𝑐2 |
𝑑3 𝑏3 𝑐3
−4 −1 2
1 −4 −6 −4 −6 1
= |−6 1 −4| = -4| | - (-1) | | +2| |
3 −4 4 −4 4 3
4 3 −4
= -4(-4 + 12) + (24+16) + 2(-18-4)
= 32 +40-44 = -36

𝑎1 𝑑1 𝑐1
𝑎
Dy= | 2 𝑑2 𝑐2 |
𝑎3 𝑑3 𝑐3
1 −4 2
−6 −4 3 −4 3 −6
= |3 −6 −4| = 1 | | - (-4)| | +2| |
4 −4 2 −4 2 4
2 4 −4
= (24 + 16) + 4(-12+8) + 2(12+12)
= 40 – 16+ 48 = 72

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𝑎1 𝑏1 𝑑1
Dz = |𝑎2 𝑏2 𝑑2 |
𝑎3 𝑏3 𝑑3
1 −1 −4
1 −6 3 −6 3 1
= |3 1 −6 | = 1 | | - (-1)| | +(-4)| |
3 4 2 4 2 3
2 3 −4
= (4 + 18) + (12+12) - 4(9-2)
= 22 +24 - 28 = 18
Now that we have that, we simply need to determine the solutions
by the formulas
We get
Dx Dy Dz
x= D
x= D
x= D
−36 72 18
x= 18
x = 18 x = 18

So the solution to the system is (-2, 4, 1).

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MODULE III
SEQUENCE, SERIES AND PROGRESSION
ARITHMETIC PROGRESSION
A series is said to be in Arithmetic Progression, it its terms
continuously increase or decrease by a constant number . It is a
series, in which each term is obtained by adding or deducting a
constant number to the preceding term. The constant number is
called common difference of the progression and is denoted by ‘d’.
It is the difference between the two term of the series i.e., the
difference between second term and first term or third term and
second term and so on.
The first term of an A.P. is usually denoted by ‘a’. One general
form of an A.P is a, a+ d, a+2d, a+ 3d, ………
For example
1) The sequence 1, 3, 5, 7,is an A.P whose first term is 1 and d = 2
2) The sequence ‐5, ‐2, 1, 4, 7,….., whose ‘a’ = ‐5, d = 3

General term of an AP or nth term


Ler ‘a’ be the first term and ‘d’ be the common difference of an
A.P, then an denotes the nth term of the A.P.

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an = a + (n-1)d
n = number of term in a series.
Practical Problems
1) Find the 12th term of an A.P 6, 2, ‐2
Ans: an = a + (n-1)d
a = 6, n = 12, d = ‐4
= 6 + (12‐1) – 4
= 6 + (11) – 4

= 6 + ‐ 44 = ‐38
12th term is ‐38
2) Find the 8th term of the series 6, 5½, 5, 4½, . . . . .
Ans: a = 6, d = ‐½,n = 8
an = a + (n-1)d
= 6 + (8‐1)‐½
= 6 + (7) ‐½
= 6 + ‐3.5 = 2.5
3) Which term of the A.P 21, 18, 15, ‐81 ?
Ans: a = 21 , d = ‐3, an = ‐81 n =?
an = a + (n-1)d
‐81 = 21 + (n‐1)‐3
‐81 = 21 + ‐3n +3
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‐81 = 24 – 3n
‐81 – 24 = ‐3n 3n = 105
n = 105/3 = 35
Therefore the 35th term of the given A.P = ‐81
4) Which term of the A.P 21,18,15, 0?
Ans: a = 21, d = ‐3, an = 0, n =?
an = a + (n-1)d
0 = 21 + (n – 1)‐3
0 = 21 + ‐3n + 3
0 = 24 – 3n

3n = 24, n =8
Therefore, the 8th term = 0
5) If the 9th term of an A.P is 99 and 99th term is 9. Fine 108th
term?
Ans: an = a + (n-1)d
n = 9, an = 99
= a + (9‐1)d = 99
= a + 8d = 99 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐(1)
n = 99, an = 9
= a + (99 – 1)d =9
= a + 98d = 9 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐(2)

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Solve the equations

a + 8d = 99 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐(1)
a + 98d = 9 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐(2)
Then (1) – (2) ‐ 90d = 90
d = 90/‐90 = ‐1
Substitute the value of ‘d’
a + 8d = 99
a + 8 x ‐1 = 99 a + ‐8 = 99
a = 99 + 8 = 107
108th term = a + (n‐1)d
= 107 + (108 – 1)‐1
= 107 + (107)‐1
= 107 – 107 = 0
108th term = 0
6) Determine the A.P whose 3 rd term is 5 and the 6th term is 8
Ans: a + 2d = 5 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ (1)
a + 5d = 8 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐(2)
Then (1) – (2) = ‐3d = ‐3
3
𝑑 =3 =1

A.P = 3,4,5,6,7,8…….
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7) Find many two digit numbers are divisible by 3 ?
Ans: Numbers = 12, 15, 18, ‐ ‐ ‐ ‐ ‐ ‐ 99
a = 12, d = 3, an = 99
an = a + (n-1)d
99 = 12 + (n‐1)3
99 = 12 + 3n – 3
99 = 12 – 3 + 3n
99 = 9 + 3n
3n = 99 – 9,
3n = 90
90
n= 3
= 30

∴ Two digit numbers are divisible by 3 = 30 number


8) Determine the 25th term of the A.P, whose 9th term is ‐6 and the
common difference is 5/4.
Ans: d = 5/4, a9 = ‐6
a9 = a + (n-1)d
5
‐6 = a + 8 x 4

‐6 = a + 10
a = ‐10 – 6 = ‐16
a25 = a + (n – 1)d

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5
= ‐16 + (25 – 1) 4
5
= ‐16 + 24 x4

= ‐16 + 30 = 14
25th term = 14

Sum of n terms of an A.P


Let Sn denotes the sum of ‘n’ terms of an A.P, whose first term is
‘a’ and common difference is ‘d’.

Sn = n/2 [2a + (n— 1)d]

2a = a + a or 2 x a
Practical Problems
1) Find the sum of the first 20 terms of 1 + 4 + 7 + 10 . . . . . . .

Ans: Sn = n/2 [2a + (n— 1)d]

n = 20, a = 1, d = 3
20
Sn = [2 x 1 + (20 – 1 )3]
2

= 10 (2+ 19 x 3)
= 10(2 + 57), 10 x 59 =590
Sum of the first 20 terms = 590
2) Find the sum of the series 5, 3, 1, ‐1,………. ‐23
Ans: a= 5, d = ‐2, n = ?, an =‐23
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Sn = n/2 [2a + (n— 1)d]

We know, an = a + (n – 1)d
‐23 = 5 + (n – 1)‐2
‐23 = 5 + ‐2n + 2
‐23 = 5 + 2 – 2n
‐23 = 7 – 2n
2n = ‐23 – 7
2n =30
30
n= 2
= 15
15
Sn = [2 x 5 + (15 – 1 )-2]
2
15
= [10 + - 28]
2
15
=
2
× -18

= 15 x ‐9 = ‐135
Sum of the series = ‐135

3) How many terms of the sequence 54, 51, 48, ………… be taken
so that their sum is 513. Explain the double answer.
Ans: Sn = 513, a = 54, d = ‐3

Sn = n/2 [2a + (n— 1)d]

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𝑛
513 = (2 x 54 + (n – 1)‐3)
2
𝑛
513 = 2
(108 – 3n + 3)
𝑛
513 = 2
(111 – 3n)

1026 = n(111 – 3n)


1026 = 111n – 3n2
3n2 – 111n = ‐1026

3n2 – 111n + 1026 = 0


n2 – 37n + 342 = 0
Solve by using quadratic formula
−𝑏±√𝑏 2 −4𝑎𝑐
= 2𝑎

a = 1, b = ‐37, c = 342
37±√372 −4×1×342
= 2×1
37±√1369−1368
= 2
37±√1 37±1
= 2
= 2
37+1 37−1
= 2
or 2

= 19 or 18
N = 18 or 19
4) Find the sum of all natural numbers between 500 and 1000 which
are divisible by 13.
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Ans: Number between 500 and 1000 which are divisible by 13
507, 520, 533, 988
a = 507, d = 13, an = 988
an = a + (n-1)d
988 = 507 + (n‐1)13
988 = 507 + 13n – 13
988 = 507 – 13 + 13n
988 = 494 + 13n
13n = 988 – 494 = 494
13n = 494
494
n= 13
=38

Sn = n/2 [2a + (n— 1)d]

= 19(1014 +37 x 13)


= 19(1014 + 481)
= 19 1495 = 28405
5) Find the sum of all natural numbers from 1 to 200 excluding those
divisible by 5
Ans: Natural number from 1 to 200 = 1, 2, 3, 4, ……. 200
Divisible by 5 = 5, 10, 15, 20 200
∴ Natural numbers from 1 to 200, excluding divisible by 5
= (1, 2, 3, 4 . . . . 200) – (5, 10, 15……200)
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Sum of (1, 2, 3, 4, 200)

Sn = n/2 [2a + (n— 1)d]


200
= [2x1 + (200 — 1)1]
2

= 100 (2+199)
=100 x 201 = 20,100
Sum of (5, 10, 15,20,………200)
40
= (2 x5 +(40‐1)5)
2

=20 (10 + 39 x 5)
=20(10 + 195)
= 20 x 205 = 4100
Sum by natural numbers from 1 to 200 excluding divisible by 5
= 20100 – 4100 = 16000
6) The sum of the first 3 terms of an A.P is 30 and the sum of first
7 terms is 140. Find the sum of the first 10 terms.
Ans: S3 = 30, s7 = 30,

Sn = n/2 [2a + (n— 1)d]


𝑛
= [2a + (3 — 1)d] = 30
2
3
= 2a +2d = 30 x 2

= 2a + 2d = 20
= a + d = 10 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐(1)
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7
= 2
[2a + 6d] = 140
7
= 2a + 6d = 140× 2

= 2a + 6d = 40
= a + 3d = 20 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐(2)
Solving the equation (1) and (2) d = 5
Then a = 5
10
S10 = [2× 5 + 9× 5] = 275
2

7) Find three numbers in A. P whose sum is 9 and the product is ‐165.


Ans: Let the numbers be a‐d, a, a+d
(a‐d) + a + (a +d) = 9
3a = 9, a =3
(a‐d) x a x (a+d) = ‐165
= (3 – d) x 3 x (3 +d) = ‐165
−165
= 9 – d2 =
3

= 9 – d2 = ‐55
= ‐d2 = ‐55 – 9 = ‐64
= d2 = 64, d =8
a = 3, d = 8
Numbers = (a – d), a, (a+d)
= ‐5, 3, 11
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8) Find four numbers of A.P whose sum is 20 and the sum of whose
square is 120
Ans: Let numbers be (a‐3d), (a‐d) (a+d) (a+3d)
Given (a‐3d)+(a‐d)+(a+d)+(a+3d) = 20
20
4a = 20, a= 4
=5

(a‐3d)2 x (a‐d)2 x (a+d)2 x (a+3d)2 = 120


= (5‐3d)2 x (5‐d)2 x (5+d)2 x (5+3d)2 = 120
We know (a‐b)2 = a2 – 2ab + b2
= 25 ‐30d+9d2+25 –10d+d2+25+10d + d2+25+30d+9d2 = 120
= 100 + 20d2 = 120
20d2 = 120 = 100
20d2 = 20, d2 = 20/20 = 1,d = 1 a = 5, d=1
Numbers are = (a – 3d), (a‐d), (a + d), (a + 3d)
= (5‐3). (5‐1), (5+1), (5+3)
` = 2, 4, 6, 8
9) A manufacturing of radio sets produced 600 units in the third
year and 700 units in the seventh year. Assuming that the
production uniformly increases by a fixed number every year.
Find
1) One production in the first year

2) The production in the 10th year.


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3) The total production in 7 year.
Ans: Since the production increases uniformly by a fixed number
in every year, it form an A.P.
Let a3 = 600, a7 = 700
an = a + (n – 1)d
600 = a + (3‐1)d
600 = a + 2d………..(1)
700 = a + 6d………..(2)
a + 2d = 600…………. (1)
a + 6d = 700………….(2)
‐4d = ‐100
100
d= 4
= 25

1) Production in the first year


a + 2d = 600
a + 50 = 600
a = 550
2) Production in the 10th year
i.e., an = a + (n‐1)d
= 550 + (10 – 1) 25
= 550 + 9 x 25
= 550 + 225 = 775

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3) Total production in 7th year

Sn = n/2 [2a + (n— 1)d]


7
= [2 x 550 + (7 — 1)25]
2
7
= 2
(1100 + 6 x 25)
7
= 2
(1100 + 150)
7
= 2
(1250)

= 7 x 625 = 4375 units

Arithmetic Mean (A.M)


Given two numbers a and b, we can insert a number A between them,
so that a, A, b is an A.P. Such a number A is called the Arithmetic
Mean of the number a and b.
We can insert as many numbers as we like between them. Let A,
A2, A3 An be ‘n’ numbers between a and b, Then
A1 = a + d
A2 = a + 2d
A3 = a +3 d
An = a + nd
Example
1) Find A.M between 2 and 6
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2+6
Ans: A.M between 2 and 6 = 2
=4

Then A.P. = 2, 4, 6
2) Insert 4 Arithmetic means between 5 and 20
a = 5, n = 6, an =20, d =?
an = a + (n – 1)d
20 = 5 + (6‐1)d
20 = 5 + 5d
20 = 5 + 5d
5d = 20 – 5 = 15
d = 15/5 = 3
A1 = a + d i.e., 5 +3 = 8
A2 = a + 2d i.e., 5 +6 = 11
A3 = a +3d i.e., 5 +9 = 14
A4 = a + 4d i.e., 5 +12 = 17
Arithmetic means are 8, 11, 14, 17
A.P. = 5, 8, 11, 14, 17, 20
3) Insert six numbers between 3 and 24 such that the resulting
sequence is an A.P.
Ans: a = 3, n = 8, an = 24, d =?
an = a + (n – 1)d

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24 = 3 + 7d
7d = 21, d =3
A1 = 3 +3 = 6
A2 = 3 + 6 = 9
A3 = 3 + 9 = 12
A4 = 3 + 12 = 15
A5 = 3 + 15 = 18
A6 = 3 + 18 = 21
A.M. = 6, 9, 12, 15, 18, 21
A.P. = 3, 6, 9, 12, 15, 18, 21, 24
Geometric Progression
A series is said to be in G.P if every term of it is obtained by
multiplying the previous term by a constant number. This constant
𝑠𝑒𝑐𝑜𝑛𝑑 𝑡𝑒𝑟𝑚
number is called common ratio, denoted by ‘r’. r = 𝑓𝑖𝑟𝑠𝑡 𝑡𝑒𝑟𝑚
or

third term by second term etc.


The first term of a G.P is usually denoted by a. The general form of
a G.P is usually denoted by a. The general form of a G.P is a, ar,
ar2, ar3 ….. If the number of terms of a G.P is finite, it is called a
finite G.P, otherwise it is called an infinite G.P. For example.
(i) 1, ½, ¼ , 1⁄8 ……… is a G.P, whose first term is 1 and r = ½

(ii) 3, ‐6, 12, ‐24 ………… is a G.P whose a = 3 , r = ‐2


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General term of a G.P or nth term of a G.P
Let ‘a’ be the first term and ‘r’ be the common ratio of a G.P, then
an = arn-1
1) Find 10th term of series 9, 6, 4………
6 2
Ans: a=9 r = 9 =3 𝑛 = 10

an = arn-1
= 9× 2 10-1
(3)
= 9× 2 9
(3)
=9 𝟐 9
( ) 𝟑

2) Find the 12th term of 2, 6, 18, 54 ………


a = 2, r = 6/2 =3, n = 12

an = arn-1 = 2 × 312–1
= 2 × 311 = 2 x 177147 = 3, 54,294
3) Which term of the G.P 2, 8, 32 up to n terms is 131072 ?
a = 2, r = 4, an = 1,31,072

an = arn-1
1,31,072 = 2 × 4n–1
131072
n–1 2
4 =
4n–1 = 65536

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i.e., 48 = 65536
i.e. n‐1 = 8
‫׵‬n=8+1=9

Hence 1,31,072 is the 9th term of the G.P.


th
4) In a G.P the third term is 24 and 6th term is 192. Find the 10 term
Ans: a3 = 24, a6 = 192

an = arn-1

a3 = ar2 = 24

a6 = ar5 = 192

i.e., ar2 = 24 ‐‐‐‐‐‐‐‐‐ (1)


ar2 = 192 ‐‐‐‐‐‐‐(2)
Divide (2) by (1),

ar5 192
= =
ar2 24

r = 8 ie 23
3

r=2

Substituting r = 2 in (1)
ar2 = 24,
a x 22 = 24
a x 4 = 24,
a = 24/4 = 6

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n-1 9
a10 = ar = 6(2) = 3072
Sum of ‘n’ terms of a G.P
Let ‘a’ be the first term and ‘r’ be the common ratio and Sn the sum
of the ‘n’ terms of G.P.
𝑎(1−𝑟 𝑛 ) 𝑎(𝑟 𝑛 −1)
Then Sn = (1−𝑟)
= (r−1)

When r is less than 1, we can apply first formula.


1) Find the sum of the series.
1024 + 512 + 256 ………to 15 terms
Asn: a = 1024, n = 15, r = ½
𝑎(1−𝑟 𝑛 )
Sn = (1−𝑟)

115
1024(1− )
2
= 1
(1− )
2

115
1024( )
2
= 1
(1− )
2

115
1024( )
2
= 1
(1− )
2

2 115
= 1024 × 1 × (2 )
𝟏𝟏𝟓
= 𝟏𝟎𝟐𝟒 × (𝟐 )

2) Find the sum of 1 + 3+ 9 + 27 to 10 terms.


a = 1, r = 3, n = 10
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𝑎(𝑟 𝑛 −1)
Sn = (r−1)

1(310 −1)
=
(3−1)
59049−1
= 2
= 29524

3) How many terms of the G.P 3, 3/2, 3/4 , …………….. are needed to
give the sum
3069
a = 3, r = ½, Sn=
512
𝑎(1−𝑟 𝑛 )
Sn = (1−𝑟)
1n
3069 3( )
2
= = 1
512 (1− )
2

1n
3069 3( )
2
= = 1
512
2

3069 2 1n
= =3 × 1 (1 − )
512 2
3069 2 1n
= =3 × 1 (1 − )
512 2
3069 1n
= = 6(1 − )
512 2
3069 1n
= = (1 − )
512×6 2
3069 1
= =1 − )
3072 2𝑛
1 3069 3 1
2𝑛
=1-
3072
=
3072
=1024

2n = 1024
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210 = 1024, n = 10

Geometric Mean
One geometric mean of two positive numbers a and b is the number
√ab. Therefore, the geometric mean of 2 and 8 is 4. We can insert as
many numbers as we like between a and b to make the sequence in a
G.P. Let G1, G2, G3, Gn be ‘n’ number between a and b, then

G1 = ar, G2 = ar2, G3= ar3, Gn = arn

1) Insert three G.M. between 1 and 256


Ans. a = 1, an = 256, n = 5, r = ?
an = arn–1
256 = 1 rn–1
256 = rn–1
256 = r5–1
256 = r4
256 = 44, r =4
G.M. are ar, ar2, ar3
1 x 4, 1 x 42, 1 x 43 = 4, 16, 64
G.P = 1, 4, 16, 64, 256
2) Find the G.M between 4 is 16
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Ans: G.M = √4 × 16= √64 = 8


3) Insert 5 geometric means between 2 and 1458
Ans: a = 2, n = 7, an = 1458
an = arn–1
1458 = 2 r7–1
1458 = 2r6
2r6 = 1458
r6 = 1458/2 = 729
r6 = 36

G.M. = ar, ar2, ar3, ar4, ar5


= 2 x 3, 2 x 32, 2 x 33, 2 x 34, 2 x 35
= 6, 18, 54, 162, 486, 486
G.P. = 2, 6, 18, 54, 162, 486, 1458
4) Find the three numbers in G.P whose sum is 26 and product is 216.
Ans: Let the number is G.P be
a/r, a, ar
a/r, a/ ar = 216
i.e. a3 = 216, 63 = 216
∴a=6
a/r + a + ar = 6/r + 6 + 6r = 26
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= 6/r + 6r = 26 – 6
= 6/r + 6r = 20
Multiply by r
= 6 + 62 = 20r
= 62 – 20r + 6
= 62 – 20 r + 6 = 0
Solving by using quadratic formula
Then r = 1/3 or 3
Required numbers a/r, a, ar
r =3
6/3, 6, 6 x 3 = 2, 6, 18

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MODULE IV
INTEREST AND TIME VALUE
Simple interest
It is the interest calculated on principal amount at the fixed rate .
𝑃𝑛𝑟
Simple Interest = 100

Where P = Principal amount, n = number of year,


r = rate of interest per annum
𝑃𝑛𝑟
Amount at the end of nth year = P + 100 or
𝑛𝑟
= P(1 + )
100

or principal amount + interest


1) What is the simple interest for Rs. 10, 000 at the rate of 15% per
annum for 2 years?
Ans: P = 10,000, n = 2 years, r = 15
𝑃𝑛𝑟 10000×2×15
Interest = 100
= 100

= Rs. 3, 000
2) Find the total interest and amount of the end of 5th year for as
10,000 at 10% per annum, simple interest.
Ans: P = 10,000, n = 5 years, r = 10%
𝑃𝑛𝑟 10000×2×10
Interest = 100
= 100

= Rs. 5, 000
Amount at the end
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𝑛𝑟
5th year = P(1 + )
100
5×10
= 10000(1 + 100
)
50
= 10000(1 + 100)
150
= 10000( 100)

= 10000 × 1.5
= 15000
3) Find the simple interest and amount for Rs. 25,000 at 10% p. a
for 26 weeks. Ans: P = 25,000 n = 26/52, r = 10%
𝑃𝑛𝑟
Ans: Interest = 100
26
25000× ×10
52
= 100
1
25000× ×10
2
= 100
25000×5
= 100
= 1250

Amount at the end


𝑛𝑟
= P(1 + 100)
26
×10
52
= 25000(1 + 100
)
5
= 25000(1 + 100)
105
= 25000( 100)

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= 25000× 1.05 = 26250
4) Find the simple interest and amount for Rs. 50,000 at 7.5% p. a
for 4 months.
Ans: P = 50,000, n = 4/12, r = 7.5%
𝑃𝑛𝑟
Interest =
100
4
50000× ×7.5
12
= 100
1
50000× ×7.5
3
= 100
50000×2.5
= = 1250
100

Amount
𝑛𝑟
= P(1 + 100)
4
×7.5
= 50000(1 + 12100 )
2.5
= 50000(1 + 100)
102.5
= 50000( 100
)

= 50000× 1.025 = 51250


5) Find the number of years in which a sum of money will double
itself at 25% p. a, simple interest.
Ans: P = p, Amount = 2P, r = 25, n = ?
𝑛𝑟
Amount = P(1 + 100)

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𝑛𝑟
2P= P(1 + )
100
𝑛𝑟
i.e., 2= (1 + 100)
𝑛𝑟
= 2 -1 = 100
𝑛𝑟
=1 = 100

nr = 100
r= 25 ∴𝑛=4
number of years = 4
6) Find the rate of interest at which an amount of Rs. 12000 will
become Rs. 15000 at the end of 10th year.
Ans: A = 15000, P = 12000, n = 1, r = ?
Total interest 15000 – 12000 = 3000
𝑃𝑛𝑟
Interest = 100
12000×10×𝑟
3000 = 100

3000× 100 =12000 × 10 × 𝑟


300000 = 120000r
300000
r = 120000 = 2.5

Rate of interest = 2.5%


7) A certain sum amounts to Rs. 678 in 2 years and to Rs. 736.50 in
3‐5 years find the rate of interest and principal amount.
Ans: Amount for 2 years = 678
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“ 3‐5 years = 736.50
𝑛𝑟
Amount = P(1 + 100)
2𝑟
678 = P(1 + 100) ………(1)
3.5𝑟
736.50 = P (1 + 100
) ………(2)

Divide (1) by (2)


2𝑟
678 1+
100
= = 3.5𝑟
736.50 1+
100

678 100+2r
= 736.50 = 100+ 3.5r

= 678 (100+3.5r) = 736.50 (100 + 2r)


= 67800 + 2373r = 73650 + 1473r
= 2373r – 1473r = 73650 – 67800
= 900r = 5850
= r = 5850/900 = 6.5

Substituting the value of r


2𝑟
P (1 + 100) = 678
2×6.5
P (1 + 100
) = 678
13
P (1 + 100) = 678
113
P( ) = 678
100

P(1.13) = 678

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P = 678/1.13 = 600
Rate of interest = 6.5%
Principal amount at the begining = 600
Compound Interest
Compound interest means interest calculated on principal amount
plus interest. Let ‘p’ be the principal ‘r’ be the rate of interest
(compound) p.a., ‘n’ be the number of years then
𝑟
Amount = P(1 + 100)𝑛

Total interest = A – P
1) Find CI on Rs. 25200 for 2 years at 10% p.a compounded
annually?
Ans: P = 25200, r = 10, n = 2
𝑟
A = P(1 + 100)𝑛
10
= 25200(1 + 100)2
110
= 25200( 100)2

= 25200× (1.10)2
= 25200× 1.21
= 30492
CI = 30492 – 25200 = 5292
2) Find the Compound Interest Rs.10,000/‐ for 2½ years at 10%
p.a..
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Ans: P = 10,000 n = 2½ r = 10
𝑟
Amount for 2 years = P(1 + 100)𝑛
)
10 2
= 10000(1 + 100
)
110
= 10000( 100)2

= 10000× (1.10)2
= 10000× 1.21
= 12100
Interest for 2 years = 2100
10 6
Interest for 6 months = 12100 × 100 × 12

= 605
Total interest for 2½ years = 2100 + 605
= 2,705
3) Mr. A borrowed Rs.20,000/‐ from a person, but he could
not repay any amount in a period of 4 years. So the lender
demanded as 26500 which is the rate of interest charged.
Ans: Here interest charged on compound
P = 20,000 n = 4 A = 26500 r=?
𝑟
A = P(1 + )𝑛
100
𝑟
26500 = 20000 (1 + 100)4
26500 𝑟
20000
= (1 + 100)4
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𝑟
1.325 = (1 + )4
100
𝑟
Log 1.325 = (1 + 100)4
𝑟
Log 1.325 = 4 log (1 + 100)
𝑟
0.1222= 4 log (1 + 100)
𝑟 0.1222
log (1 + 100) = 4
𝑟
log (1 + 100) = 0.03055

Antilog 0.03055 = 1.073


𝑟
(1 + 100) = 1.073
𝑟
= 1.073 – 1
100
𝑟
100
= 0.073

r = 100 x 0.073 = 7.3%


4) The population of a country increases every year by 2.4%
of the population at the beginning of first year. In what time
will be population double itself? Answer to the nearest year?
Ans: p = p A = 2p r = 2.4 n = ?
𝑟
A = P (1 + 100)𝑛
2.4
2P = P (1 + 100)𝑛
102.4 𝑛
2P = P (1 + 100
)

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n
2P = p(1.024)
P = (1.024)n
log 2 = n log 1.024
0.3010 = n x 0.0103
0.3010
n = 0.0103 = 29.22 = 30

5) The population of a city increases every year by 1.8% of the


population at the beginning of that year, in how many years will
the total increase of population be 30%?
Ans: p = p A = 1.3p r = 1.8 n = ?
𝑟
A = P (1 + 100)𝑛
1.8
1.3p = P (1 + 100)𝑛
101.8 𝑛
1.3p = P (1 + 100
)

1.3p = p (1.018)n
1.3 = (1.018)n
log 1.3 = n log 1.018
0.1139 = n x 0.0076
0.1139
n = 0.0076 = 14.987

= 15

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COMPOUNDING HALF YEARLY OR QUARTERLY

When interest is compounded half yearly, then r = r/2 , n = 2n.

When interest is compounded quarterly, then r = r/4 , n = 4n.

When interest is compounded monthly, then r = r/12 , n = 12n.

1) Find the compound interest on Rs.50,000/‐ for 2 ½ years at 6%


p.a. interest being compounded half yearly.
Ans: p = 50,000 n=2½x2=5

r = 6/2 = 3
3
Amount = 50000 (1 +
100
)5
103
= 50000 ( 100)5

= 50000 × (1.03)5
= 57964
CI = 7964
2) Find the compound interest on Rs.60,000/‐ for 4 years, if interest
is payable half yearly for due first 3 years at the rate of 8% p.a. and
for the fourth year, the interest is being payable quarterly at the rate
of 6% p.a.
Ans: Amount at in end of 3 years
8
n = 3 x 2 = 6, r = 2 = 4

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p = 6000
4
= 6000 (1 +
100
)6
104 6
= 6000 ( )
100

= 6000 (1.04)6
= 6,000 x 1.2653
= 7592
For last year
n = 1 x 4 = 4,
6
r= 2
=1.5

p = 7,592
Amount at the end of 4th year
1.5 4
= 7592 (1 + )
100

= 7592 (1.015 )4
= 7592 x 1.0613 = 8057
Interest = 8057 – 6000 = 2057
3) Find the effective rate of interest if interest is calculated at 10%
p.a. half yearly?
10
Ans: Let p = 100, n = 1 x 2 = 2 r= =5
2
5
= 1 00 (1 +
100
)2
105 2
= 1 00 ( )
100

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= 100 x 1.1025 = 110.25
C 1 = 110.25 – 100 = 10.25
Effective rate = 10.25% p.a.

ANNUITY
An annuity is a fixed sum paid at regular intervals under certain
conditions. The interval may be either a year or a half-year or, a
quarter year or a month.
Amount of an annuity :
Amount of an annuity is the total of all the instalments left unpaid
together with the compound interest of each payment for the period
it remains unpaid.
P
Formula : A = {(1 + 𝑖)2 − 1}
i

(i) Where A = total(s) amount after n years,


i = rate of interest per rupee per annum.
p = yearly annuity
(ii) If an annuity is payable half-yearly and interest is also
compounded half-yearly, then amount A is given by
2𝑃 𝑖 2𝑛
A= 𝑖
1+ 2
-1

(iii) If an annuity is payable quarterly and interest is also


compounded quarterly, then amount A is given by

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4𝑃 𝑖 4𝑛
A= 𝑖
1+ 2
-1

Present value of an annuity :


Definition : Present value of an annuity is the sum of the present
values of all payments (or instalments) made at successive annuity
periods.
Formula :
(i) The present value V of an annuity P to continue for n years is
given by
𝑃
V = 𝑖 {1 − (1 + 𝑖)−𝑛 }

Where i = interest per rupee per annum.


(ii) The Present value V of an annuity P payable half-yearly, then
2𝑃 𝑖 −2𝑛
V= {1 − (1 + }
𝑖 2

(iii) The Present value V of an annuity P payable quarterly, then


4𝑃 𝑖 −4𝑛
V= {1 − (1 + }
𝑖 4

Example:
A man decides to deposit 20,000 at the end of each year in a bank
which pays 10% p.a. compound interest. If the instalments are
allowed to accumulate, what will be the total accumulation at the
end of 9 years?
Solution :
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Let ` A be the total accumulation at the end of 9 years. Then we
have

Example :
A truck is purchased on instalment basis, such that ` 10,000 is to be
paid on the signing of the contract and five yearly instalments of `
5,000 each payable at the end of 1st, 2nd, 3rd, 4th and 5th years. If
interest is charged at 10% per annum what would be the cash down
price?
Solution :
Let V be the present value of the annuity of ` 5,000 for 5 years at
10% p.a. compound interest, then cash down price of the truck is `
(10,000 + V).

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Hence the required cash down price of the truck
= ` (18,953.95 + 10,000)
= ` 28,953.95
Example :
A man purchased a house valued at ` 3,00,000. He paid ` 2,00,000
at the time of purchase and agreed tob pay the balance with interest
of 12% per annum compounded half yearly in 20 equal half yearly
instalments.
If the first instalment is paid after six months from the date of
purchase, find the amount of each instalment.
[Given log 10.6 = 1.0253 and log 31.19 = 1.494]
Solution :
Since ` 2,00,000 has been paid at the time of purchase when cost of
house was ` 3,00,000, we have to consider 20 equated half yearly
annuity payment ` P when 12% is rate of annual interest
compounded half yearly for present value of ` 1,00,000.

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PERPETUITY
Perpetuity can be well defined as an annuity without any end, or it
can be said that perpetuity features a stream of cash payments
continuing forever. To describe in detail, perpetuity is an annuity
wherein the periodic payments commence on a specific date and
continue to an indefinite time. Sometimes, it is even referred to as
perpetual annuity. Some of the prime examples perpetuities include
fixed coupon payments on permanently invested money, or consol
(the British issued bond). The concept of perpetuity is, very often,
used in financial theory, like the Dividend Discount Model (DDM).

Calculation (formula) of perpetuity


The value of perpetuity or a perpetual annuity is calculated by a
𝐴
simple formula: PV =
𝑟

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where,
PV = represents the present value of the perpetuity,
A = represents the amount of periodic payments, and
r = represents the discount rate, yield, or interest rate.
Besides, the present value of perpetuity can also be determined by
the following steps:
Find out the annual payment, rate of interest, and growth rate of the
perpetuity.
Put the apt numbers into the formula:
Present Value of a growing perpetuity = P / (i – g),
Where ‘P’ represents the annual payment, ‘i’ represents the interest
or discount rate, and “g” is the growth rate.
You can apply the following example as a point of reference so as
to crosscheck the calculations. Let us assume that a XYZ company
pays a dividend of Rs.100 per annum forever at an interest rate of
5% and a growth rate of 1%. To estimate the present value of this
perpetuity, you can apply the following formula:
PV of preferred stock in XYZ = 100 / (Rs.0.05-0.01)
PV of preferred stock in XYZ = Rs.100 / 0.04
PV of preferred stock in XYZ = Rs.2,500
Therefore, the present value of a share of XYZ’s preferred stock is
expected to be Rs.2,500.
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Although the payments made on perpetuity are assumed to be
indefinite, there is still a finite value for the perpetuity’s present
value which is accrued to the expected returns in future featuring a
low present value.
The value of perpetuity can, however, change over the time period,
in spite of same amount of payments. This might be due to changes
in discount rate. The value of perpetuity increases with a decrease
in the discount rate and vice versa.
Equated monthly installment
An equated monthly installment (EMI) is defined as "A fixed
payment amount made by a borrower to a lender at a specified date
each calendar month. Equated monthly installments are used to pay
off both interest and principal each month, so that over a specified
number of years, the loan is fully paid off along with interest."
It further explains that, with most common types of loans, such as
real estate mortgages, the borrower makes fixed periodic payments
to the lender over the course of several years with the goal of
retiring the loan. EMIs differ from variable payment plans, in
which the borrower is able to pay higher payment amounts at his or
her discretion. In EMI plans, borrowers are mostly only allowed
one fixed payment amount each month.
The benefit of an EMI for borrowers is that they know precisely
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how much money they will need to pay toward their loan each
month, making the personal budgeting process easier.
The formula for EMI (in arrears) is:
1−(1+𝑟)−𝑛
P=A. 𝑟
𝑟(1+𝑟)𝑛
Or P = P .(1+𝑟)𝑛−1

where: P is the principal amount borrowed, A is the


periodic amortization payment, r is the annual interest rate divided
by 100 (annual interest rate also divided by 12 in case of monthly
installments), and n is the total number of payments (for a 30-year
loan with monthly payments n = 30 × 12 = 360).
For example, if you borrow 10,000,000 units of a currency from
the bank at 10.5% annual interest for a period of 10 years (i.e., 120
months), then EMI = units of currency
10,000,000 · 0.00875 · (1 + 0.00875)120/((1 + 0.00875)120 – 1)
= units of currency 134,935. i.e., you will have to pay total
currency units 134,935 for 120 months to repay the entire loan
amount.
The total amount payable will be 134,935 × 120 = 16,192,200
currency units that includes currency units 6,192,200 as interest
toward the loan.

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MODULE V
DESCRIPTIVE STATISTICS
Meaning and Definitions of Statistics
The word statistics is derived from the Latin word ‘Status’ or Italian
word ‘Statista’ or German word ‘Statistik’ which means a Political
State. It is termed as political state, since in early years, statics
indicates a collection of facts about the people in the state for
administration or political purpose.
Statistics has been defined either as a singular non or as a plural
noun.
Definition of Statistics as Plural noun or as numerical facts:‐
According to Horace Secrist, ‘Statistics are aggregates of facts
affected to a marked extent by multiplicity of causes numerically
expressed, enumerated or estimated according to a reasonable
standard of accuracy, collected in a systematic manner for a
predetermined purpose and placed in relation to each other’.
Definition of Statistics as a singular noun or as a method:‐
According to Seliman, “ Statistics is the science which deals with the
methods of collecting classifying, comparing and interpreting
numerical data collected, to know some light on any sphere of
enquiry”.

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Characteristics of Statistics
1. Statistics show be aggregates of facts
2. They should be affected to a marked extent by multiplicity of
causes.
3. They must be numerically expressed.
4. They should be enumerated or estimated according to a
reasonable standard of accuracy.
5. They should be collected in a systematic manner.
6. They should be collected for a predetermined purpose.
7. They should be placed in relation to each other.

Function of Statistics
The following are the important functions of statistics:
1. It simplifies complexity:‐ Statistical methods make facts
and figures easily understandable form. For this purpose
Graphs and Diagrams, classification, averages etc are used.
2. It presents facts in a proper form:‐ Statistics presents facts
in a precise and definite form.
3. It facilitates for comparison:‐ When date are presented in a
simplified form, it is easy to compare date.
4. It facilitates for formulating policies:‐ Statistics helps for
formulating policies for the companies, individuals, Govt.
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etc. it is possible only with the help of date presented in a
suitable form.
5. It tests hypothesis:‐ Hypothesis is an important concept in
research studies. Statistics provides various methods for
testing the hypothesis. The important tests are Chi – square,
Z‐test, T‐test and F‐test.
6. It helps prediction or forecasting:‐ Statistical methods
provide helpful means of forecasting future events.
7. It enlarges individual’s knowledge:‐When data are presented
in a form of comparison, the individuals try to find out the
reasons for the variations of two or more figures. It thereby
helps to enlarge the individual’s knowledge.
8. It measures the trend behavior:‐ Statistics helps for predicting
the future with the help of present and past data. Hence
plans, programs, and policies are formulated in advance
with the help of statistical techniques.

Scope of Statistics or importance or utility of statistics.


The Scope of Statistics in various field are:
1. Statistics in Business:‐ Statistics is most commonly used in
business. It helps to take decision making of the business.
The statistical data regarding the demand and supply of
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product can be collected and analyzed to take decisions.
The company can also calculate the cost of production and
then the selling price. The existing firms can also make a
comparative study about their performance with the
performance of others through statistical analysis.
2. Statistics in Management:‐ Most of the managerial
decisions are taken with the help of statistics. The important
managerial activities like planning, directing and controlling
are properly executed with the help of statistical data and
statistical analysis. Statistical techniques can also be used
for the payment of wages to the employees of the
organization.
3. Statistics in Economics:‐ Statistical data and methods of
statistical analysis render valuable assistance in the proper
understanding of the economic problems and the
formulation of economic policy.
4. Statistics in Banking and Finance:‐ Banking and financial
activities use statistics most commonly.
5. Statistics in Administration:‐ The govt. frames polices on
the basis of statistical information.
6. Statistics in Research:‐ Research work are undertaken with
the help of statistics.
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Limitation of statistics
1. Statistics studies only numerical data
2. Statistics does not study individual cases.
3. Statistical result are true only an average.
4. Statistics does not reveal the entire story of the problem.
5. Statistics in only one of the methods of study a problem.
6. Statistics can be misused.

Statistical Enquires or Investigation


Statistical Investigation is concerned with investigation of some
problem with the help of statistical methods. It implies search for
knowledge about some problems through statistical device.
Different stages in statistical enquiry are:
1. Planning the enquiry
2. Collection of data.
3. Organization of data.
4. Presentation of data.
5. Analysis of data.
6. Interpretation of data.
Planning the enquiry:‐ The first step in statistical investigation is
planning. The investigator should determine the objective and
scope of the investigation. He should decide in advance about the
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type of enquiry to be conducted, source of information and the unit
of measurement.
Object and scope:‐ The objective of the Statistical enquiry
must be clearly defined. Once the objective of enquiry has been
determined, the next step is to decide the scope of enquiry. It refers to
the coverage of the enquiry.
Source of information:‐ After the purpose and scope have
been defined, the next step is to decide about the sources of data.
The sources of information may be either primary or secondary.
Types of enquiry:‐ Selection of type of enquiry depends on a
number of factors like object and scope of enquiries, availability of
time, money and facilities. Enquiries may be (1) census or sample
(2) original or repetitive (3) direct or indirect (4) open or
confidential (5) General or special purpose.
Statistical unit:‐ The unit of measurements which are
applied in the collected data is called statistical unit. For example
ton, gram, meter, hour etc.
Degree of accuracy:‐ The investigator has to decide about
the degree of accuracy that he wants to attain. Degree of accuracy
desired primarily depends up on the object of an enquiry.
Cost of plan:‐ An estimate of the cost of the enquiry must
be prepaid before the commencement of enquiry.
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Collection of data:‐ Collection of data implies accounting and
systematic recoding of the information gathered in a statistical
investigation. Depending on the source, the collected statistical data
are classified under two categories namely primary data and
secondary data.
Organization of data:‐ Organization of data implies the
arrangement and presentation of data in such a way that it becomes
easy and convenient to use them. Classification and tabulation are
the two stages of organizing data.
Presentation of data:‐ They are numerous ways in which statistical
data may be displayed. Graphs and diagrams are used for presenting
the statistical data.
Analysis data:‐ Analysis of data means critical examination of the
data for studying characteristics of the object under study and for
determining the pattern of relationship among the variables.
Interpretation of data:‐ Interpretation refers to the technique of
drawing inference from the collected facts and explaining the
significance.
MEASURES OF CENTRAL TENDENCY OR AVERAGES

An average is a single value that represents a group of values. It


represents the whole series and conveys general idea of the whole
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group. Characteristics of a good average or Requisites or Essentials
properties of average
1. Clearly defined
2. Easy to understand
3. Simple to compute
4. Based on all items
5. Not be unduly affected by extreme observations.
6. Capable of further algebraic treatment
7. Sampling stability.

Types of averages
1. Arithmetic Mean
2. Median
3. Mode
4. Geometric mean
5. Harmonic Mean
ARITHMETIC MEAN (AM)
It is the value obtained by adding together all the items and by
dividing the total number of items.
Arithmetic mean may either be
1. Simple arithmetic Mean or
2. Weighted arithmetic Mean
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Simple Arithmetic Mean
It is the mean of items which give equal importance to all items.
It is denoted by x̄
Σ𝑥
x̄ = 𝑁

Where = Sum of given variables


N = Number of items
Calculation of Arithmetic Mean
a) Individual Series
i) Direct Method
Σ𝑥
x̄ = 𝑁

ii) Short Cut Method


Σ𝑥
x̄ =A+
𝑁

A = Assumed mean
D=X–A
n = total number of items
b) Descrete Series
i) Direct Method
Σf𝑥
x̄ =
𝑁

ii) Short Cut Method


Σf𝑥
x̄ =A+ 𝑁

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d=X–A
iii) Step deviation method
Σf𝑑 1
x̄ =A+ 𝑁
×𝑐
𝑋−𝐴
𝑑1 = 𝑐

c = common factor
c) Continuous Series
i) Direct Method
Σfm
x̄ = 𝑁

m = midpoint of X
N = Total frequency
ii) Short Cut Method
Σfd
x̄ =A+ 𝑁

d=m–A
iii) Step deviation method
Σf𝑑 1
x̄ =A+ 𝑁
×𝑐
𝑚−𝐴
𝑑1 = 𝑐

C = Common factor or class interval


Practical Problems
1) Calculate A.M. of the weight of 10 students in a Class

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Sl. No. 1 2 3 4 5 6 7 8 9 10

Weight in 42 56 49 50 49 53 52 48 47 54
Kg

Ans: This is an individual series.


Σ𝑥
x̄ = 𝑁

Σ𝑥 = 42+56+49+50+49+53+52+48+47+54
= 500
n = 10
500 = 50kg
x̄ = 10

2) Calculate mean from the following data.


Marks 25 30 35 40 45 50 55 60 65 70
No. of students 3 8 12 9 4 7 15 5 10 7

Ans:
Marks No. of d d’ fd’
x students f (x – 55)
25 3 ‐30 ‐6 ‐18
30 8 ‐25 ‐5 ‐40
35 12 ‐20 ‐4 ‐48
40 9 ‐15 ‐3 ‐27

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45 4 ‐10 ‐2 ‐8
50 7 ‐5 ‐1 ‐7
55 15 0 0 0
60 5 5 1 5
65 10 10 2 20
70 7 15 3 21
80 ‐102

Σf𝑑 1
x̄ =A+ 𝑁
×𝑐
−102
x̄ =55+ 80
×5
−510
x̄ =55+ 80 × 5
= 55 + ‐6.375
= 48.625
3) Calculate Arithmatic Mean
Production in tons No. of factories

10 –20 5
20 –30 4
30 –40 7
40 ‐ 50 12
50 –60 10
60 –70 8
70 –80 4
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Ans:
X f m fm

10 – 20 5 15 75

20 – 30 4 25 100

30 – 40 7 35 245

40 ‐ 50 12 45 540

50 – 60 10 55 550

60 – 70 8 65 520

70 – 80 4 75 300

80 2330

Σfm
x̄ = 𝑁
2330
x̄ = 80 = 46.6
4) Following are the data related with the production of a product
during January in 100 factories

Production in tons No. of factories


0 – 100 7
100 – 200 15
200 – 300 10
300 – 400 9
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400 – 500 10
500 – 600 12
600 ‐ 700 8
700 – 800 13
800 – 900 9
900 ‐ 1000 7
Ans:
x f m d (m – A) d’ fd’
0 – 100 7 50 ‐500 ‐5 ‐35

100 –200 15 100 ‐400 ‐4 ‐60

200 –300 10 250 ‐300 ‐3 ‐30

300 –400 9 350 ‐200 ‐2 ‐18

400 –500 10 450 ‐100 ‐1 ‐10

500 –600 12 550 0 0 0

600 ‐ 700 8 650 100 1 8

700 –800 13 750 200 2 26

800 –900 9 850 300 3 27

900 ‐ 1000 7 950 400 4 28

100 ‐64

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Σf𝑑 1
x̄ =A+ 𝑁
×𝑐
−64
x̄ =550+ 100 × 100
= 486
Calculation of Arithmatic Mean for open end classes

If the lower limit of the first class and upper limit of the last class are
not known, it is called open end classes.
Calculate A.M.
Below 10 5
10 – 20 12
20 – 30 14
30 – 40 10
Above 40 8
Ans:
X f m fm
0 – 10 5 5 25
10 – 20 12 15 180
20 – 30 14 25 350
30 – 40 10 35 350
40 ‐ 50 8 45 360
49 1265

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Σfm 1265
𝑋̅ = 𝑁 = 49

=25.82
Weighted Mean
Weighted means are obtained by taking in to account of weights.
Each value is multiplied by its weight and total is divided by the
total weight to get weighted mean.
Σ𝑤𝑥
𝑋̅𝑤 = Σ𝑤

𝑋̅𝑤 = weighted A.M


w = weight
x = given variable
MEDIAN
Median is the middle value of the series. When the series are
arranged in the ascending order
or descending order Median is a positional average.
Calculation of Median
Individual series
Firstly arrange the series.
𝑛+1 th
Median = Size of ( 2
) item

Discrete series
𝑛+1 th
Median = Size of ( 2
) item

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Continuous series
𝑁
Median Class = 2
𝑁
− 𝑐𝑓
2
Median = L1+ 𝑓
×C

L1 = Lowerlimit of median class


c.f = culmulative frequency of preceding median class
f = frequency of median class
C = Class interval
1) Find the median for the following data
4, 25, 45, 15, 26, 35, 55, 28, 48
Ans :
4, 15, 21, 25, 26, 28, 35, 45, 48, 55
𝑛+1 th
Median = Size of ( 2
) item
5+1 th
=( ) item = 5th item
2

Median = 28
2) Calculate median
25, 35, 15, 18, 17, 36, 28, 24, 22, 26
Ans :
15, 17, 18, 22, 24, 25, 26, 28, 35, 36
𝑛+1 th
Median = Size of ( 2
) item
10+1 th
=( 2
) item
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th
= 5.5 item
5𝑡ℎ 𝑖𝑡𝑒𝑚+6𝑡ℎ 𝑖𝑡𝑒𝑚
Median = 2
24+25
= 2
= 24.5

3) Calculate median
Size : 5 8 10 15 20 25
Frequency : 3 12 8 7 5 4
Ans:

Size Frequency Cf
5 3 3
8 12 15
10 8 23
15 7 30
20 5 35
25 4 39

𝑛+1 th
Median = Size of ( ) item
2
39+1 th
=( 2
) item = 20th item

Median = 10
4) Find median from the following

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Marks No. of students
0‐5 29
10‐15 195
15‐20 241
20‐25 117
25‐30 52
30‐35 10
35‐40 6
40‐45 2
Ans:
Marks f c.f
0‐5 29 29
5‐10 195 227
10‐15 241 465
15‐20 117 582
20‐25 52 634
25‐30 10 644
30‐35 6 650
35‐40 3 653
40‐45 3 656

656

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656
Median Class = N/2 = 2
= 328th item
𝑁
− 𝑐𝑓
2
Median = L1+ 𝑓
×C
328− 224
= 10+ 241
×5

= 12.2
MODE
Mode is the value of item of series which occurs most frequently.
Mode in individual series
In the case of individual series, the value which occurs more
number of times is mode.
When no items appear more number of times than others, then mode
is the ill defined. In this case :
Mode = 3 median – 2 mean
Mode in discrete series
In the case of discrete series, the value having highest frequency is
taken as mode.
Mode in continuous series
Mode lies in the class having the highest frequency.
(𝑓1 − 𝑓0 )×𝑐
Mode = l1+
2𝑓1 − 𝑓0 −𝑓2

l1= lower limit of the model class


f1= frequency of the model class
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f0 , f1 = frequency of class preceding and succeeding modal class.
1) Find mode
1, 2, 5, 6, 7, 3, 4, 8, 2, 5, 4, 5
Ans:
Mode = 5
2) Find mode
4, 2, 6, 3, 8, 7, 9, 1
Ans:
Mode is ill defined
Mode = 3 median – 2 mean
Σx 40
𝑋̅ = 𝑁 = 8 = 5

Median : 1, 2, 3, 4, 6, 7, 9
𝑛+1 th
Median = Size of ( 2
) item
8+1
= 2
= 4.5
4𝑡ℎ 𝑖𝑡𝑒𝑚+5𝑡ℎ 𝑖𝑡𝑒𝑚
= 2
4+6
= 2
=5

Mode = 3 × 5 – 2 × 5 = 5
3) Find mode
Size : 5 8 10 12 15 20 25
Frequency: 3 7 2 9 5 6 2

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Mode = 2, since 12 has the highest frequency
4) Calculate mode

Size : 0‐ 5‐1 10‐1 15‐2 20‐2 25‐3


5 0 5 0 5 0
Frequenc 20 24 32 28 20 26
y:

Ans:
Size Frequency
0‐5 20
5‐10 24
10‐15 32 ‐‐‐‐ ‐Models class
15‐20 28
20‐25 20
25‐30 26

(𝑓 − 𝑓 )×𝑐
Mode = l1+2𝑓1 − 𝑓0 −𝑓
1 0 2

(32− 24)×5
= 10+2×32− 24−28
40
= 10 + 12

= 13.3
Geometric Mean
Geometric mean is defined as the nthroot of the product of those in
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values.
Σ log 𝑥
GM = Antilog ( 𝑛
)

GM in individual series
Σ log 𝑥
GM = Antilog ( )
𝑛

GM in descrete series
Σ f log 𝑥
GM = Antilog ( 𝑛
)

GM in continous series
Σ f log 𝑥
GM = Antilog ( 𝑛
)

X = midpoint of x
1) Find Geometric mean of the following
57.5, 87.75, 53.5, 73.5, 81.75
Ans:
X logx
57.5 1.7597
87.75 1.9432
53.5 1.7284
73.5 1.8663
81.75 1.9125
9.2101

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Σ log 𝑥
GM = Antilog ( 𝑛
)
9.2101
= Antilog ( 5
)

= Antilog (1.84202)
= 69.51
2) Find G.M from the following data

Size : 5 8 10 12
Frequency: 2 3 4 1

Ans:
X f logX f logX

5 2 .6990 1.3980
8 3 .9031 2.7093
10 4 1.0000 4.0000
12 1 1.0792 1.0792
10 9.1865

Σ f log 𝑥
GM = Antilog ( 𝑛
)
9.1865
= Antilog ( 10
)

= Antilog (.91865)
= 8.292
3) Calculate G.M.
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Daily Income 0 -20 20 - 40 40 - 60 60 – 80 80 - 100
Frequency: 5 7 12 8 4

Ans:
X f x( logx f logx
0‐20 5 10 1.0000 5.0000
20‐40 7 20 1.4771 10.3397
40‐60 12 30 1.6990 20.3880
60‐80 8 40 1.8451 14.7608
80‐100 4 50 1.9542 7.8168
36 58.3053

Σ f log 𝑥
GM = Antilog ( 𝑛
)
58.3053
= Antilog ( 36
)

= Antilog 1.6195916
= 41.65
Harmonic Mean
Harmonic mean is defined as the reciprocal of the mean of the
reciprocals of those values. It applied in averaging rates, times etc.
𝑛
HM = 1

𝑥

H.M in Discrete series


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𝑁
HM = 1
∑𝑓( )
𝑥

H.M in Continous series


𝑁
HM = 1
∑𝑓( )
𝑥

X = midpoint of x
1)Find the H.M.
2, 3, 4, 5
Ans:
x 1
x
2 0.5
3 0.33
4 0.25
5 0.20
1.28

𝑁
HM = 1
∑( )
𝑥

4
= 1.28 = 3.125

2) Find the H.M.


Size : 6 10 14 18
Frequency: 20 40 30 10

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Ans:
Size f 1 f(1/X)
x
6 20 0.1667 3.334
10 40 0.1000 4.000
14 30 0.0714 2.142
18 10 0.0556 0.556
100 10.032
𝑁
HM = 1
∑𝑓( )
𝑥

100
= 10.032

= 9.97
3) From the following data, calculate the value of HM?
Income ( ) No. of persons
10 – 20 4
20 – 30 6
30 – 40 10
40 – 50 7
50 – 60 3
Ans:
1 1
Income ( ) f x in m 𝑓( )
x 𝑥

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10 – 20 4 15 0.667 0.2666
20 – 30 6 25 0.0400 0.2400
30 – 40 10 35 0.0286 0.2857
40 – 50 7 45 0.0222 0.1556
50 – 60 3 55 0.0182 0.0545
30 1.0023

𝑁
HM = 1
∑𝑓( )
𝑥

30
=
1.0023

= 29.93
MEASURES OF DISPERSION OR VARIABILITY
Dispersion means a measure of the degree of deviation of data from
the central value.
Measures of Dispersion are classified into
(1) Absolute Measures
(2) Relative Measures.
Absolute Measures of dispersion are expressed in the same units in
which data are collected. They measure variability of series.
Various absolute measures are:
(i) Range
(ii) Quartile Deviation
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(iii) Mean Deviation
(iv) Standard Deviation
Relative measure is also called coefficient of dispersion. They are
useful for comparing two series for their variability. Various
relative measures are:
(i) Coefficient Range
(ii) Coefficient of Quartile Deviation
(iii) Coefficient of Mean Deviation
(iv) Coefficient of Variation
RANGE
The range of any series is the difference between the highest and
the lowest values
in the series.
Range = H – L
H = Highest variable
L = Lowest variable
𝐻−𝐿
Coefficient of Range =𝐻+𝐿

1) Find the Range and Coefficient of Range.


75, 29, 96, 15,7,8,11, 7, 49
Ans:
Range = H – L
= 96 – 74 = 92
𝐻−𝐿 96−4 92
Coefficient of Range = = == = = 0.92
𝐻+𝐿 96+4 100

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2) Find Range and Coefficient of Range
Wages 5 10 15 20 25 30
No. of 2 5 6 7 4 6
employees

Range = H – L
= 30 – 5 = 25
𝐻−𝐿 30−5 25
Coefficient of Range = =𝐻+𝐿 = =30+5 = 35 = 0.71

3) Find out Range and Coefficient of Range


Marks 20 – 29 30 – 39 40 – 49 50 – 59 60 – 69
No. of Students 8 12 20 7 3

Ans:
Marks f
19.5 – 29.5 8
29.5 – 39.5 12
39.5 – 49.5 20
49.5 – 59.5 7
59.5 – 69.5 3

Range = H – L
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= 69.5 – 19.5 = 50
𝐻−𝐿 69.5−19.5 50
Coefficient of Range = =𝐻+𝐿 = =69.5+19.5 = 89 = 0.56

QUARTILE DEVIATION
Quartile Deviation is defined as the half distance between the third
and first quartiles.
𝑄3 − 𝑄1
Quartile Deviation =
2
𝑄3 − 𝑄1
Coefficient of Quartile Deviation = 𝑄3 + 𝑄1

Quartile Deviation in Individual Series


𝑄3 − 𝑄1
Quartile Deviation= 2
𝑛+1 th
𝑄1= size of 4
item
𝑛+1 th
𝑄3 = size of 3( ) item
4

Quartile Deviation in Discrete Series


𝑄3 − 𝑄1
Quartile Deviation= 2
𝑁+1 th
𝑄1= size of 4
item
𝑁+1 th
𝑄3 = size of 3( 4
) item

Quartile Deviation in Continous Series


𝑄3 − 𝑄1
Quartile Deviation= 2
𝑁 th
𝑄1= size of 4
item

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𝑁
𝑄3 = size of 3( 4 ) th item
𝑁
− 𝑐𝑓
4
Then 𝑄1 = L1+ 𝑓
×C
𝑁
3( )− 𝑐𝑓
4
𝑄3 = L1+ 𝑓
×C

1) Calculate Quartile Deviation from the following:


25, 15, 30, 45, 40, 20, 50
Also find coefficient of quartile deviation.
Ans: Arrange the series, then
15, 20, 25, 30, 40, 45, 50
𝑁+1 th 8
𝑄1= size of 4
item = 4 = 2nd item
𝑁+1 th
𝑄3 = size of 3( 4
) item = 3 × 2 = 6th item
𝑄3 − 𝑄1 45− 20
Quartile Deviation = 2
= 2
= 12.5
𝑄3 − 𝑄1
Coefficient of Quartile Deviation =
𝑄3 + 𝑄1
25
= 45+ 20
25
= 65
= 0.385

2) Find the value of Quartile Deviation and coefficient of Quartile


Deviation?
Marks 25 30 40 50 60 70 80 90
No. of Students 4 7 12 8 9 15 7 3

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Ans:
x f c.f.

25 4 4

30 7 11

40 12 23

50 8 31

60 9 40

70 15 55

80 7 62

90 3 65

65

𝑁+1 th 65+1
𝑄1= size of 4
item = 4
= 16.5th item
𝑁+1 th
𝑄3 = size of 3( 4
) item = 3 × 16.5 =49.5th item

𝑄1= 40
𝑄3 = 70
𝑄3 − 𝑄1 70− 40
Quartile Deviation = 2
= 2
= 15 marks
𝑄3 − 𝑄1
Coefficient of Quartile Deviation = 𝑄3 + 𝑄1

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70−40
= 70+ 40

= 0.27
3) Compute Quartile Deviation and coefficient of Quartile
Deviation?
x 0 ‐ 10 ‐ 20 ‐ 30 ‐ 40 ‐ 50 ‐ 60
10 20 30 40 50
f 5 12 15 9 10 3

Ans:
x f c.f.
0 –10 5 5
10 – 20 12 17
20 – 30 15 32
30– 40 9 41
40 – 50 10 51
50 ‐ 60 3 54
54

𝑁
𝑄1= size of 4
th item
54
= 4
th item = 13.5th item

Which lies in 10 – 20 , then


𝑁
− 𝑐𝑓
4
Then 𝑄1 = L1+ 𝑓
×C

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13.5− 5
= 10+ 12
× 10
8.5
= 10+ 12 × 10
85
= 10+12 = 17.08

𝑁
𝑄3 = size of 3( 4 ) th item
3×13.5 = 40.5th item
Which lies in 30 – 40 , then
𝑁
3( )− 𝑐𝑓
4
𝑄3 = L1+ 𝑓
×C

40.5− 32
= 30+ 9
× 10
8.5
= 30+ 9 × 10

85
= 30+ 9 = 39.44
𝑄3 − 𝑄1 39.44− 17.08
Quartile Deviation = 2
= 2

= 11.18 marks
𝑄3 − 𝑄1
Coefficient of Quartile Deviation = 𝑄3 + 𝑄1
39.44 – 17.08 22.36
= 39.44 + 17.08 = 56.52

= 0.396
MEAN DEVIATION
Mean Deviation is defined as the arithmetic mean of deviations of
all the values in a series from their average. The average may be

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mean, median or mode.
Σ|𝑑|
Mean Deviation = 𝑛

Where |d| = deviation from an average without sign


Mean Deviation in Individual Series
Σ|𝑑|
Mean Deviation = 𝑛
Mean Deviation
Coefficient of Mean Deviation = 𝐴𝑣𝑒𝑟𝑎𝑔𝑒

Average = Mean, Median or Mode from which the deviation is


taken
Mean Deviation in Discrete Series
Σf|𝑑|
Mean Deviation = 𝑁
Mean Deviation
Coefficient of Mean Deviation =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒

Mean Deviation in Continous Series


Σf|𝑑|
Mean Deviation = 𝑁

1) Calculate Mean Deviation from the following.


14, 15, 23, 20, 10, 30, 19, 18, 16, 25, 12
Ans:
Arrange the data
10, 12, 14, 15, 16, 18, 19, 20, 23, 25, 30
11+1
Median size of 2
item

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= 6th Item = 18
X |d| ie. X – median
14 4
15 3
23 5
20 2
10 8
30 12
19 1
18 0
16 2
25 7
12 6
50

Σ|d| 50
Mean Deviation = n
=11 = 4.54 marks

2) Calculate Mean Deviation from the following data:


Size of item 6 7 8 9 10 11 12
Freequency 3 6 9 13 8 5 4
Ans:
Size f c.f |d| f |d|
6 3 3 3 9
7 6 9 2 12
8 9 18 1 9
9 13 31 0 0
10 8 39 1 8
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11 5 44 2 10
12 4 48 3 12
48 60
48+1
Median size of 2
item = 24.5

Median =9
= 18
Σf|d| 60
Mean Deviation = n
=48 = 1.25

3) Calculate the Mean Deviation from the following data:


Marks 0 ‐ 10 10 ‐ 20 20‐ 30 30‐ 40 40 ‐ 50 50 ‐ 60 60 ‐ 70 70 ‐
80
Freequency 18 16 15 12 10 5 2 2

Ans:

x f m c.f. |d| ie. X – median f|d|


0 –10 18 5 18 19 342

10 – 20 16 15 34 9 144

20 – 30 15 25 49 1 15

30 – 40 12 35 61 11 132

40 – 50 10 45 71 21 210

50 ‐ 60 5 55 76 31 155

60 – 70 2 65 78 41 82

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70 ‐ 80 2 75 80 51 102

80 1182

𝑁
Median = 2 th item
80
= 2 th item = 40th item

Which lies on 20 – 30
𝑁
− 𝑐𝑓
Median = L1+ 2 𝑓
×C
40− 34
= 20+ 15
× 10
6
= 20+15× 10

= 24
Σf|d| 1182
Mean Deviation = n
= 80
= 14.775

STANDARD DEVIATION
Standard Deviation is defined as the square root of the mean of
the squares of the deviations of individual items from their
arithmetic mean. It is denoted by σ (sigma).
Σ(𝑥−𝑥̅ )2
σ =√
n
Standard Deviation in Individual Series
Σ(𝑥−𝑥̅ )2 Σx2 Σx
σ =√ n
or σ =√ n
− ( n )2

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σ
Coefficient of variation = 𝑥̅
× 100

Standard Deviation in Discrete Series


Σfx2 Σfx
σ =√ N
− ( N )2

Shortcut method:
Σfd2 Σfd 2
σ =√ − ( )
N N

d=x‐A
Standard Deviation in Continuous Series
(i) Direct Method:
Σfx2 Σfx
σ =√ N
− ( N )2

x = mid point of X
(ii) Shortcut method:
Σfd2 Σfd
σ =√ N
− ( N )2

d = m – A or x – A
(iii) Step Deviation method:
Σfd′ 2 Σfd′ 2
σ =√ N
− ( N
) ×c
𝑑
d’= 𝑐

c = class interval.

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VARIANCE
Variance is defined as the mean of the squares of the deviations
of all the values in the series from their mean. It is the sqare
root of the Standard Deviation.
Variance = σ
1) Compute S.D
4, 8, 10, 12, 15, 9, 7, 7
Ans:
x x2
4 16
8 64
10 100
12 144
15 225
8 81
7 49
7 49
72 728
Σx2 Σx
σ =√ n
− ( n )2

728 72
=√ 8
− ( 8 )2
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BBA3B05Financial Management
=√91 − 92
=√91 − 81
= √10
= 3.16
2) Find the S.D and C.V
10, 12, 80, 70, 60, 100, 0, 4
σ
Coefficient of variation = 𝑥̅
× 100

Ans:
x x2
10 100

12 144

80 6400

70 4900

60 3600

100 10000

0 0

4 16
336 25160
Σx2 Σx
σ =√ n
− ( n )2

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25160 336 2
=√ 8
− ( 8
)

= √3145 − 422
= √3145 − 1764
= √1381
= 37.16

C.V. σ
= 𝑥̅
× 100
336
𝑥̅ = 8
= 42

37.16
C.V = 42
× 100 = 88.48

3) Find out S.D

Production in tones : 50 100 125 150 200 250 300


No. of factories: 2 5 7 12 9 5 3
Ans:
X f d(x‐A) d1 d1
2
fd1 fd
12

50 2 ‐100 ‐4 16 ‐8 32

100 5 ‐50 ‐2 4 ‐10 20

125 7 ‐25 ‐1 1 ‐7 7

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150 12 0 0 0 0 0

200 9 50 2 4 18 36

250 5 100 4 16 20 80

300 3 150 6 36 18 108

43 31 283

A= 150
𝑑
d’ = 25
Σfd′ 2 Σfd′ 2
σ =√ N
− ( N
) ×c
283 31
=√ − ( )2 × 25
43 43
=√6.58 − 0.52 × 25
=√6.06 × 25
= 2.46× 25
= 61.5
4) The scores of the batsmen A and B the six innings during a
certain match are as follows.
Expenditure 100‐200 200‐300 300‐400 400‐500 500‐600
(Rs):
No. of families 30 20 40 5 10

(i) Find which of the two batsman is more consistant in scoring.


(ii) Find who is more efficient batchman.

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Ans:
Batsman A Batsman B
X X2 X X2
10 100 8 64
12 144 9 81
80 6400 7 49
70 4900 10 100
60 3600 5 25
100 10000 9 81
0 0 10 100
4 16 8 64
336 25160 66 564

(i) For finding consistant, C.V is calculated


σ
C.V = = × 100
𝑥̅

Batsman A
336
𝑥̅ = 8
= 42

Σx2 Σx
σ =√ n
− ( n )2

25160 236 2
=√ 8
− ( 8
)

= 37.16
37.16
C.V = × 100
42

= 88.48
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Batsman B
66
𝑥̅ = 8
= 8.25

Σx2 Σx
σ =√ n
− ( n )2

564 66
=√ 8
− ( 8 )2

= 1.562
1.562
C.V = × 100
8.25

= 18.93
B is more consistent since C.V. is less.
(ii) For finding more efficient, average is taken
A = 42 B = 8.25
Batsman A is more consistent since he has greater
average.
Merits of S.D
1. S.D. is based on all the values of a series.
2. It is rigidly defined
3. It is capable of further mathematical treatment.
4. It is not much affected by sampling fluctuations.
Demerits
1. It is difficult to calculate.

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BBA3B05Financial Management
2. Signs of the deviations are not ignored.
Measures of skewness
Skewness means lack of symmetry when a frequency distribution
is not symmetrical, it is said t be asymmetrical or skewed. In the
case of a skewed distribution, the mean, median and mode are not
equal. Similarly for a skewed distribution Q1 and Q3 will not be
equidistant from median. It is an asymmetrical distribution. It has a
long tail on one side and a start tail on the other side.
A distribution is said to be skewed when:
(1) Mean, media and mode are not equal.
(2) Q1 and Q3 are not equidistant from median.
(3) Frequencies on either side of mode are not equal.
(4) The frequency curve has longer tail on the left side or on the
right side.
Positive and Negative skewness
Skewnwss may be either positive or negative. Skewness is said to
be positive when the mean is greater than the median and median is
greater than mode. More than half area falls to right side of the
highest ordinate.
Swewness is said to be negative when the mean is less than median
and the median is less than mode. In this case curve is skewed to
the left more than half the area falls to the left of the highest
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BBA3B05Financial Management
ordinate.

Measures of skewness
Karl Pearson’s measure of skewness
𝑀𝑒𝑎𝑛−𝑀𝑒𝑑𝑖𝑎𝑛
Skewness = 𝜎

Bowley’s measure of skewness


𝑄3+ 𝑄1−2𝑀𝑒𝑑𝑖𝑎𝑛
Skewness = 𝑄3− 𝑄1
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Kelley’s measure of skewness
𝑃90+ 𝑃10−2𝑀𝑒𝑑𝑖𝑎𝑛
Skewness = 𝑃90− 𝑃10

Measure of skewness Based on Moments


𝑀3
Skewness =
√𝑀23

KURTOSIS
Kurtosis is a measure of peakdness. It refers a distribution
which is relatively fetker than the normal curve.
When a frequency curve is more peaked than the normal curve, it is
called lepto kurtic and when it is more flat topped than the normal
curve it is called platy kurtic. When a curve is neither peaked nor plat
topped, it is called meso kurtic normal.

Lorenz Curve
Lorenz curve is a graphical method of studying dispersion. It is
used in business to study the disparities of the distribution of
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BBA3B05Financial Management
wages, sales, production etc. In Economics it is useful to measure
inequalities in the distribution of income.
It is a graph down to a frequency distribution. While drawing the
graph, cumulative percentage values of frequencies on X axis and
cumulative percentage values of the variable on Y axis.

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