ADDITIONAL MATHEMATICS PROJECT WORK 2/2013

FORM 5

FAMILYS MONTHLY EXPENDITURE

PREPARED BY : NAJAA SYAIRAH MAHYUDIN FORM : 5 PUTRA SCHOOL : SMK SEKSYEN 19 PREPARED FOR : SOMU A/L PANTINAIDU

INDEX NUMBER
PREPARED BY : NAJAA SYAIRAH MAHYUDIN FORM : 5 PUTRA SCHOOL : SMK SEKSYEN 19 PREPARED FOR : SOMU A/L PANTINAIDU

CONTENT

Num. 1. 2. 3. 4. 5. 6. 7. 8. 9.

Title Objectives Introduction Part 1 Part 2 Part 3 Part 4 Further Explorations Reflection Conclusion
JOKES !

Page

OBJECTIVES
We are students from Sekolah Menengah Kebangsaan Section 19 taking Additional Mathematics that are required for us to carry out a

project work while we are in Form 5. This year the Curriculum Development Division, Ministry of Education has prepared four tasks for us but we are assigned to choose and complete only one task based on our area of interest. This project can be done in groups or individually, but each of us are expected to submit by individually a written report. Upon completion of the Additional Mathematics Project Work, we can gain valuable experiences and enable us: i. ii. iii. iv. To apply and adapt a variety of problem-solving strategies to solve problems. To improve thinking skills. To promote effective mathematical communication To develop mathematical knowledge through problem solving in a way that increases students interest and confidence. v. vi. To use the language of mathematics to express mathematical ideas precisely. To provide learning environment that stimulates and enhances effective learning. vii. To develop positive attitude towards mathematics.

INTRODUCTION
Assalamualaikum and hello ,

My name is Najaa Syairah . I am 17 years old and from 5 Putra . I am honour to execute my responsibility in order to conduct this project work. Thanks for giving me a chance to complete my Additional Mathematics project work and as a representative for my school , SMK SECTION 19. First of all, I would like to say Alhamdulillah, for giving me the strength and health to do this project work and finish it on time. Besides, not forgotten to my parents and family for providing everything, such as money, to buy anything that are related to this project work, their advise, which is the most needed for this project and facilities such as internet, books, computers and others. They also supported me and encouraged me to complete this task so that I will not procrastinate in doing it. Next, I would like to thank to my teacher, Sir Somu for guiding me throughout this project. Even I had some difficulties in doing this task, but he taught me patiently until I knew how to managed the problem well. He tried his best to teach me until I understand what I am supposed to do with the project work. Furthermore, my friends who always supporting me, eventhough this project is assign individually but we are cooperate with each other for this project especially in discussion and sharing ideas to ensure our task will finish successfully. Last but not least, any party which involved either directly or indirect in completing this project work. Thank you everyone.

HISTORY OF INDEX NUMBER

Index numbers are meant to study the change in the effects of such factors which cannot be measured directly. Thus, index numbers are used to measure the changes in some quantity which we cannot observe directly. For example, changes in business activity in a country are not capable of direct measurement but it is possible to study relative changes in business activity by studying the variations in the values of some such factors which affect business activity, and which are capable of direct measurement. Index numbers are commonly used statistical device

for measuring the combined fluctuations in a group related variables. If we wish to compare the price level of consumer items today with that prevalent ten years ago, we are not interested in comparing the prices of only one item, but in comparing some sort of average price levels. We may wish to compare the present agricultural production or industrial production with that at the time of independence. Here again, we have to consider all items of production and each item may have undergone a different fractional increase (or even a

decrease). How do we obtain a composite measure? Basically, this composite measure is provided by index numbers which may be defined as a device for combining the variations that have come in group of related variables over a period of time, with a view to obtain a figure that represents the net result of the change in the constitute variables.

In addition, Index numbers may be classified in terms of the variables that they are intended to measure. In business, different groups of variables in the measurement of which index number techniques are commonly used are : i. ii. iii. iv. price quantity value business activity.

Thus, we have index of wholesale prices, index of consumer prices, index of industrial output, index of value of exports and index of business activity, etc. Here we shall be mainly interested in index numbers of prices showing changes with respect to time, although methods described can be applied to other cases.

In general, the present level of prices is compared with the level of prices in the past. The present period is called the current period and some period in the past is called the base period.

Statistics Today

During the 20th century, the creation of precise instruments for agricultural research, public health concerns (epidemiology,

biostatistics, etc.), industrial quality control, and economic and social purposes (unemploymentrate, econometry, etc.) necessitated

substantial advances in statistical practices. Today the use of statistics has broadened far beyond its origins. Individuals and organizations use statistics to understand data and make informed decisions throughout the natural and social sciences, medicine, business, and other areas. Statistics is generally regarded not as a subfield of mathematics but rather as a distinct, albeit allied, field. Many universities maintain separate mathematics and statistics

departments. Statistics is also taught in departments as diverse as psychology, education, and public health.

Index Number Index numbers are today one of the most widely used

statistical indicators. Generally used to indicate the state of the economy, index numbers are aptly called barometers of economic activity . Index numbers are used in comparing production, sales or changes exports or imports over a certain period of time. The roleplayed by index numbers in Indian trade and industry is impossible to ignore. It is a very well known fact that the wage contracts of workers in our country are tied to the cost of living index numbers. By definition, an index number is a statistical measure designed to show changes in a variable or a group or related variables with respect to

time, geographic location or other characteristics such as profession, etc.

income,

Characteristics of an Index Numbers These are expressed as a percentage: Index number is calculated as a ratio of the current value to a base value and expressed as a percentage. It must be clearly understood that the index number for the base year is always 100. An index number is commonly referred to as an index. Index numbers are specialized averages: Index number is an average with a difference. An index number is used for purposes of comparison in cases where the series being

compared could be expressed in different units i.e. a manufactured products index (a part of the whole sale price index) is constructed using items like Dairy Products, Sugar, Edible Oils, Tea and Coffee, etc. These items naturally are expressed in different units like sugar in Kgs, milk in liters, etc. The index number is obtained as a result of an average of all these items, which are expressed in different units. On the other hand, average is a single figure representing a group expressed in the same units. Index numbers measures changes that are not directly measurable:

An index number is used for measuring the magnitude of changes in such phenomenon, which are not capable of direct measurement. Index numbers essentially capture the changes in the group of related variables over a period of time. For example, if the index of industrial production is 215.1 in 1992-93 (baseyear 1980-81) it means that the industrial production in that year was up by 2.15 times compared to 1980-81. But it does not, however, mean that the net increase in the index reflects an equivalent increase in industrial production in all sectors of the industry. Some sectors might have production more than increased their

2.15 times while other sectors may have

increased their production only marginally.

Uses of index numbers Establishes trends

Index numbers when analyzed reveal a general trend of the phenomenon under study. For instance, Index numbers of

unemployment of the country not only reflects the trends in the phenomenon but are useful in determining factors leading to unemployment. Helps in policy making It is widely known that the dearness allowances paid to the employees is linked to the cost of living index, generally the consumer price index. From time to time it is the cost of living index, which forms the basis of many a wages agreement between the employees union and the employer. Thus index numbers guide policy making. Determines purchasing power of the rupee Usually index numbers are used to determine the purchasing power of the rupee. Suppose the consumers price index for urban nonmanual employees increased from 100 in 1984 to 202 in 1992, the real purchasing power of the rupee can be found out as follows: 100/202=0.495 It indicates that if rupee was worth 100 paise in 1984 its purchasing power is 49.5 paise in 1992.

Deflates time series data

Index numbers play a vital role in adjusting the original data to reflect reality. For example, nominal income (income at current prices) can be transformed into real income (reflecting the actual purchasing power) by using income deflators. Similarly, assume that industrial production is represented in value terms as a product of volume of production and price. If the subsequent years industrial production were to be higher by 20% in value, the increase may not be as a result of increase in the volume of production as one would have it but because of increase in the price. The inflation which has caused the increase in the series can be eliminated by the usage of an appropriate price index and thus making the series real.

Part 1

a) i. Price Index Price index is a an index that traces the relative changes in the price for a given class of goods or services in a given region, during a given interval of time. It is a statistic designed to help to compare how these prices, taken as a whole, differ between time periods or geographical locations or other characteristics such as income, profession, etc.

Eg :

ii.

Weightage

Weightage is a stock index in which each stock influences the index in proportion to its price per share. The value of the index is generated by adding the prices of each of the stocks in the index and dividing them by the total number of stocks. Stocks with a higher price will be given more weight and, therefore, will have a greater influence over the performance of the index.

iii.

Composite Index Composite index number is a number that measures an average relative changes in a group of relative variables with respect to a base.

b) There are four ways of weightage representations. They are :

Laspeyres Index Number: In this index number the base year quantities are used as weights, so it also called base year weighted index.

Paasches Index Number: In this index number, the current (given) year quantities are used as weights, so it is also called current year weighted index.

Fishers Ideal Index Number: Geometric mean of Laspeyres and Paasches index numbers is known as Fishers ideal index number. It is called ideal because it satisfies the time reversal and factor reversal test.

Marshal-Edgeworth Index Number: In this index number, the average of the base year and current year quantities are used as weights. This index number is proposed by two English economists Marshal and Edgeworth.

Example: Compute the weighted aggregative price index numbers for 2011 with 2010 as base year using : (1) Laspeyres Index Number (2) Paashes Index Number (3) Fishers Ideal Index Number (4) Marshal Edgeworth Index Number
Commodity Prices 2010 2011 Quantities 2010 2011

Solution:
Prices Commodity 2010 2011 Quantity 2010 2011

Laspeyres Index Number

Paashes Index Number

Fishers Ideal Index Number

Marshal Edgeworth Index Number

Part 2 We often hear complaints from the public about inflation. It causes an increase in the household expenditure in a family. The household expenditure for every family is different. a) My familys monthly expenditure for the year 2013. Average Monthly Percentage of Expenditure for the monthly expenses year 2013 (to the nearest %) (to the nearest RM) 3000 36.1 1000 12 2000 100 650 450 1000 50 50 8300 TABLE 1 24.1 1.2 8 5.4 12 0.6 0.6 100

Item

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

b) If we want to compare the cost of living from one year to another, we have to calculate the price index that involves some of the items mentioned above. i. In order to calculate the price index of all the items above, we have to consider the average monthly expenses of any previous year as the base year. ii. Average Monthly Expenditure for the year 2010 as the base year (RM) 2500 1000 2000 80 525 380 1000 50 50 7585 TABLE 2 Average monthly expenses for the year 2013 (RM) 3000 1000 2000 100 650 450 1000 50 50 8300

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

c) i. Item Food Accommodation (Rental / Loan) Transportation (Petrol/Loan/Bus fare etc) Clothing Education Recreation Utilities (Water/Electricity/Telephone) Medication Miscellaneous TOTAL Price indices for the year 2013 based on year 2010 120 100 100 125 124 118 100 100 100 987 TABLE 3 Weightage 60 20 40 2 13 9 20 1 1 166

ii.

Calculate the composite index for the average monthly expenditure in the year 2013 based on year 2010. Answer : Composite index , I

120(60)+100(20)+100(40)+125(2)+124(13)+118(9)+100(20)+100(1)+100(1) 60+20+40+2+13+9+20+1+1 18324 166

RM 110.4

d) My familys expenditure based on my findings is the average monthly expenditure for the year 2013 increase by RM110.4 . This is because some items in the year 2010 increased in the year 2013.

Part 3

Question 1

Your family is planning to buy a new television set.

a)

You have conducted a survey on the price of the television

for two different brands from three different shops. You would like to make a comparison between two modes of payment, namely, cash payment and payment by installment.

Table 4(a) shows the price of televisions by cash payment in three different shops whereas Table 4(b) shows the prices of televisions by installment.

Size of Price (RM) Mean Standard Brand Television Price Deviation Shop A Shop B Shop C (inches) (RM) (RM) 24 380 399 350 376.3 532.2 Samsung 32 650 650 600 633.3 895.7 40 900 1900 2999 1933 2733.8 24 300 450 250 333.3 471.4 Panasonic 32 500 700 1400 866.7 1225.6 40 980 1300 1300 1193.3 1687.3 TABLE 4(a)

Brand

Samsung

Panasonic

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

Price (RM) Shop A Shop B Shop C 31.6 54.2 75 25 41.7 81.7 33.3 54.2 158.3 37.5 54.3 108.3 29.2 50 249.9 20.8 116.6 108.3

Mean Standard Price Deviation (RM) (RM) 31.4 44.3 52.8 74.7 161.1 227.8 27.8 39.2 70.9 100.2 99.4 140.6

TABLE 4(b) b) I have decided to buy a Samsung television with 40 inches from shop A because Television with 40 inches has a good quality of the image , sound and screen. Television with 40 inches in shop A is much cheaper than shop B and C and it is worth it. Shop A sell with RM 900 which is my family are affordable to buy the television based on the money expenditure in Table 1. My family also can pay the prices of television by installment and we can use other money for other uses.

c) If I am the panels of the Fair Price Shop Award, the shop that deserve the award is shop A. No. I dont consider the value of mean and the value of standard deviation of television because based on the table mean and standard deviation is based on 3 shops. So, shop A sell with reasonable price. Therefore I assume that, consumers are able to buy the television at shop A. In my research, factors that influenced the prices of goods in the shops is such as the location of the shop, the population of the customers, the status of the shop, the size of the shop, and the rent for the shop.

Part 4 Question 2 a) Your family has a fixed monthly income. In order to buy the television, your family needs to make some adjustment on the various types of expenditure.

Average Monthly Item Expenditure for the year 2013 (to the nearest RM) Food Accommodation (Rental / Loan) Transportation (Petrol/Loan/Bus fare etc) Clothing Education Recreation Utilities (Water/Electricity/Telephone) Medication Miscellaneous TOTAL 50 50 8375 100 650 450 1075 2000 3000 1000

Percentage of monthly expenses (to the nearest %) 36.2 12 24.1 1.2 7.3 5 13 0.6 0.6 100

SOLUTIONS I choose to pay the television by installment.

b) Assuming you have just started working with a monthly salary of RM2500. You intend to save 10% of your salary every month. Plan your monthly expenditure in a Table 1 above and add other items such as savings and contributions to your parents.

Item

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

Average Monthly Percentage of Expenditure for monthly expenses the year 2013 (to the nearest %) (to the nearest RM) 3000 28 1000 9 2000 100 650 450 1000 50 50 250 2250 10800 19 0.9 6 4 9 0.5 0.5 2.3 20.8 100

REFLECTION
After spending countless hours, days and night to finish this project and also sacrificing my time video games and magazine in this mid year holiday, there are several things that I can say... From the day I born... From the day I was able to holding pencil... From the day I start learning... And ... From the day I heard your name... I always thought that you will be my greatest obstacle and rival in excelling in my life... But after countless of hours... Countless of days ... Countless of nights ... After sacrificing my precious time just for you... Sacrificing my Computer Games... Sacrificing my Video Games... Sacrificing my Facebook ... Sacrificing my Internet... Sacrificing my Anime... Sacrificing my magazine... I realized something really important in you... I really love you... You are my real friend... You my partner... You are my soulmate...
I LOVE U ADDITIONAL MATHEMATICS...

CONCLUSION
After doing research, answering questions, complete the table and all the problem solving, we can conclude that the planning of money expenditure for the family is important. In connection, if one family make a planning of their financial expenditures, it will give them many advantages such as :a. Help them stabilize and cope with challenges that are associated with that stage of life. b. The changes will protect their family and make it possible to still reach their financial goals even with the added expenses of children in their life. c. Boost household savings and investments. d. Help families get the right insurance. e. Financial backup when job changes occur. f. Estate planning for families. g. Assist in retirement planning. Therefore, parents should plan their familys financial in order to have stability in life. Also, parents can be a good role model by demonstrate to their children on how to spend money wisely . As a result, the family would not face any critical financial problems and their childrens will have a quality life for their future.