ADDITIONAL MATHEMATICS PROJECT

PRICE INDEX
2013

NAME :SYAZLIN ZULAIKHA BINTI SABRI CLASS: 5 LUHUR I/C NUMBER:960716-08-5934 TEACHERS NAME:PUAN ZETI AKHTAR

PART 1
(a) Describe in brief (i) price index, (ii) weightage, (iii) composite index. Answer : (i) Price index : an index number expressing the level of a group of commodity prices relative to the level of the prices of the same commodities during an arbitrarily chosen base period and used to indicate changes in the level of prices from one period to another. Weightage : the assignment of a quota (as of members of a legislature) to a particular segment of the population as a special favor or concession in a proportion above that allowable on a strictly numerical basis

(ii)

(iii)

(iii) Composite index : A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time.

(b) State four ways of weightage representations. Find the examples of the representations using internet or any printed materials. Answer : Ways to represent weightage :

1) Pie chart

2) Bar graph

3) Line graph

4) Histogram

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) Complete Table 1 for your family's monthly expenditure for the year 2013.

Answer: Average Monthly Expenditure for the year 2013 (to the nearest RM) 1200 Percentage of monthly expenses (to the nearest %) 20.0

Monthly salary

Number of family members

Item

Food Accomodation (Rental / Loan)

240

4.0

Transportation (Petrol/Loan /Bus fare etc)

600

10.0

Clothing RM 6000 5 Education Recreation Utilities (Water / Electricity / Telephone)

240 1500 210

4.0 25.0 3.5

210

3.5

Medication Miscellaneous TOTAL

300 1500 6000

5.0 25.0 100

Table 1 (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. Select the appropriate year as the base year. Answer: Item Average Monthly Expenditure for the base year 2008 (RM) 700 200

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

450

120 1000 150 180

200 1000 4000

(ii) Hence, complete Table 2 below: Answer: Average monthly expenses for the year 2008 as the base year (RM) 700 Average monthly expenses for the year 2013 (RM)

Item

Food Accomodation (Rental / Loan) Transportation (Petrol /Loan /Bus fare etc)

1200

200

240

450

600

Clothing

120

240

Education

1000

1500

Recreation Utilities (Water / Electricity / Telephone) Medication

150

210

180

210 300

200 Miscellaneous 1000 TOTAL Table 2 4000 6000 1500

(c) (i) Complete Table 3 based on the above information. Item Price indices for the year 2013 based on the year 2008 171.43 Weightage

Food Accomodation (Rental / Loan)

20.0

120.00

4.0

Transportation (Petrol /Loan /Bus fare etc)

133.33

10.0

Clothing

200.00

4.0

Education

150.00

25.0

Recreation Utilities (Water / Electricity / Telephone)

140.00

3.5

116.67

3.5

Medication

150.00

5.0

Miscellaneous

150.00

25.0

TOTAL Table 3 Formula to calculate price index :

1331.43

100

( ii)

Hence, calculate the composite index for the average monthly expenditure inthe year 2013 based on the selected base year.

Answer : Formula to calculate composite index :

= (171.43 X 20) + (120 X 4) + (133.33 X 10) + (200 X 4) + (150 X 25) + (140 X 3.5) + (116.67 X 3.5) +(150 X 5) + (150 X 25) (20 + 4 + 10 + 4 + 25 + 3.5 + 3.5 + 5 + 25)

151.90

(d) Make a conclusion about your family's expenditure based on your findings.

Answer : Based on the findings, I found that the average expenses for current year is higher than the base year 2008. We spent a total of RM1200 for food in 2013 compared to only RM700 in 2008. Other expenses such as accommodation, utilities, transportation, clothing, education, recreation, and medications also increase compared to the year 2008. This is due to the high inflation rate in 2008. After the year 2008, daily expenses for our family had increased due to the increasing of the prices of raw materials.

PART 3
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 prices of televisions by cash payment in three different shops whereas Table 4(b) shows the prices of televisions by instalment. Complete Table 4 (a) and 4(b) using the data you obtained. Answer:

Price (RM) Brand Size of Television (inches) Mean Price (RM) Standard Deviation (RM)

Hup Liong Shop 988 1788 2888 788 969 1288

TS

SH

24 32 40 24 32 40

Ramli Electonics & Hardware 788 1599 2500 699 848 1269 Table 4(a)

Kedai Elektrik Chong 888 1690 2300 999 1200 1499

888.00 1693.33 562.67 828.67 1005.67 1352.00

81.65 1685.61 2512.02 125.78 1010.70 104.23

Price (RM) Brand Size of Television (inches) Ramli Electronics Hup Seng & Hardware 1383.2 945.6 2503.2 1918.8 4043.2 3000.0 1103.2 838.8 1356.6 1017.6 1803.2 1522.8 Table 4(b) Mean Price (RM) Standard Deviation (RM)

Kedai Elektrik Chong 1154.4 2197.0 2990.0 1298.7 1560.0 1948.7

TS

SH

24 32 40 24 32 40

1161.07 2206.33 3344.40 1080.23 1311.40 1758.23

178.69 238.70 494.14 188.47 223.73 176.79

The mean and standard deviation of the data can be calculated using formula :

(b) Determine the brand and size of the television that you have decided to buy. Give your reasons based on the findings from part (a) above.

Answer: I want to buy a size 32 inch TS television. This is because there are only five members in my family and only requires medium-sized television for our living room. I choose this brand because I am confident of its quality as our family has long been using this brand for other electrical appliances in our home. Although the brand TS is more expensive than the brand SH, our family still can afford to buy it. I plan to buy from Ramli Electronics & Hardware store because they offer 2 years of warranty. In addition, they also offer the lowest price of televisions compared to the other two shops.

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

Answer: If I am one of the panel for the award, I would prefer Ramli Electronics & Hardware shop because the mean price of all types of television for both brands is the lowest compared to the other two shops. Standard deviation for the telivisonsat the shop is also the lowest. It shows that the prices of television offered by the Ramli Electronics & Hardware shop is reasonable and affordable.

PART 4
(a) Your family has a fixed monthly income. In order to buy the television, your family needs to make some adjustment on the various types of expenditure. [You can choose to pay by cash or by installment] Show the average monthly expenditure that you have modified in a table.

Item

Average Monthly Expenditure (RM)

Modified expenditure (RM)

Food Accomodation (Rental / Loan)

1200

1200

240

240

Transportation (Petrol/Loan /Bus fare etc)

600

500

Clothing Education Recreation Utilities (Water / Electricity / Telephone) Medication Miscellaneous Television TOTAL

240 1500 210

50 1300 100

210

210

300 1500 6000

150 750 1500 6000

(b) Assuming you have just started working with a monthly salary of RM2 500. You intend to save 10% of your salary every month. Plan your monthly expenditure as in Table 1 above and add other items such as savings and contributions to your parents.

Item

Average Monthly Expenditure (RM)

Food Accomodation (Rental / Loan)

400

300

Transportation (Petrol/Loan /Bus fare etc)

200

Clothing Education Recreation Utilities (Water / Electricity / Telephone)

100 100 50

100

Medication Savings Parents Miscellaneous TOTAL

100 250 600 300 2500

REFLECTION

While I conducting this project, a lot of information that I found. I have learnt the uses of price index . I also learn some moral values that I practice this project had taught me to be responsible on the work that given to be completed. This project also make me felt more confident to do work and not to give up easily when we could not find the solution for the question. I also learned to be more discipline on time which I was given 3 weeks to complete this project to pass up to my teacher in time. I also enjoyed this project during my school holiday as I spent my time with my friends to complete this project and had tighten our friendship