.

M
. athematics for Business and Economics - Exam .Points
Exam date: August 24, 2018
.Year .1
Non-graphic calculator and one A4 sheet with formulas and other content . nrolment
E .
are allowed. Time: 90 minutes. Good luck!
. ull-time
f .2
.part-time
Name and surname .3
.Student ID
.4
. .
.Σ
A
Problem 1 (15 points)
Find all solutions of the system of linear equations

x + 2y + z − t = 0
2x + y − z + t = 0
−x + 4y + 5z − 5t = 0
3y + 3z + t = 0

Solution
   
1 2 1 −1 0 1 2 1 −1 0
 2 1 −1 1 0   0 −3 −3 3 0 
 ∼ ∼
 −1 4 5 −5 0   0 6 6 −6 0 
0 3 3 1 0 0 3 3 1 0
     
1 2 1 −1 0 1 2 1 −1 0 1 2 1 −1 0
 0 1 1  
−1 0   0  
1 1 −1 0   0 1 1 −1 0 
∼
 0 ∼ ∼ 
1 1 −1 0   0 0 0 0 0   0 0 0 1 0 
0 3 3 1 0 0 0 0 4 0 0 0 0 0 0
Because the system is homogeneous it is solvable. We have the rank r(A) = 3, and the system
has n = 4 unknowns. We have infinitely many solutions and z is the free unknown.
     
1 2 1 −1 0 1 2 1 0 0 1 0 −1 0 0
 0 1 1 −1 0   0 1 1 0 0   0 1 1 0 0 
     
 0 0 0 1 0 ∼ 0 0 0 1 0 ∼ 0 0 0 1 0 
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

The solutions are z ∈ R, x = z, y = −z, t = 0.

Problem 2 (20 points)

Consider the function

x
f (x) = .
ln x
Find its domain, zeros, poles, the first and the second derivative, extrema, and intervals where
it is increasing or decreasing. What happens to the function value as x → 0 and as x → ∞?
Sketch its graph.

Solution

Domain: We can compute the logarithm only for x > 0. We exclude the pole x = 1 from the
domain. The domain is Df = (0, 1) ∪ (1, ∞).
Zeros: x = 0 is not a zero, since it doesn’t belong to the domain Df . There are no zeros.
Poles: ln x = 0 ⇒ x = 1. There is a pole at x1 = 1.
The derivatives are:
ln x − 1 2 − ln x
f ′ (x) = 2
, f ′′ (x) = .
(ln x) x(ln x)3
Extrema:
Solving f ′ (x) = 0 we get ln x = 1 ⇒ x2 = e ≈ 2.72.
Since f (e) = e ≈ 2.72 and f ′′ (e) = 1e > 0, there is a local minimum at T (2.72, 2.72).
The function is increasing on (e, ∞). It is decreasing on (0, 1) and (1, e).
lim f (x) = 0, lim f (x) = ∞.
x→0 x→∞

1 2 3 4 5 6

-2
Problem 3 (20 points)
Cynthia and Florian are buying a new house. Due to insufficient funds, they take a e50,000
loan. They will repay the loan in 120 monthly installments. The first installment will be paid
one month after taking the loan. The bank uses monthly conform compounding and the annual
interest rate is 4 %.
a) (10) Find the installments if all the installments are equal.
b) (10) Cynthia and Florian expect living costs to increase in the future. They ask the bank
for a loan with unequal installments. Find the installments, if the first 60 installments are equal,
and the last 60 installments are half of the first.

Solution

a) Cynthia and Florian get the loan of B = 50,000 e. They repay the loan in 120 equal
installments denoted by a. The cash flows are shown in the diagram below:

.B

.a.a.a .a.a
.· · ·
.
.1 .2 .· · · .9 .10 .years
√ √
p
The monthly interest factor is r = 12 1 + 100 = 12 1.04. The time period covered in the problem
lasts for 10 years. The principle of equivalence, used at the end of the year 10, gives us
Br120 = ar119 + ar118 + ar117 + · · · + ar + a
r120 − 1
Br120 = a(r119 + r118 + · · · + r + 1) = a ·
r−1
r−1
a = Br120 ·
r120 −1
√
1.04 − 1
12

a = 50,000 · 1.04 10
· = 504.53 e
1.0410 − 1
The installment equals e504.53.
b) Denote the first installment by b. The last installment b is paid at the end of year 5. The
cash flows are shown in the diagram below:

.B

.b .b .b .b b b
.2.2 .2b .2b
.· · · .· · ·
.
.1 .2 .· · · .5 .6 .· · · .9 .10 .years

The principle of equivalence gives us

Br120 = br119 + br118 + · · · + br61 + br60 + 2b r59 + 2b r58 + · · · + 2b r + b
2
r60 − 1
Br120 = br60 (r59 + r58 + · · · + r + 1) + 2b (r59 + r58 + ... + r + 1) = b(r60 + 12 )
r−1
r−1
b = Br120 ·
− 1)(r60 + 12 )
(r60
√
12
1.04 − 1
b = 50,000 · 1.04 ·
10
= 651.48 e
(1.04 − 1)(1.045 + 12 )
5

The first 60 installments equal e651.48, the last 60 equal e325.74.

Problem 4 (15 points)
In each of the two jars, there are four balls labeled by numbers 3, 4, 5, 6. We draw one ball
from each jar. The random variable X is the sum of numbers on the balls drawn.
a) (7) Find the probability function of the random variable X.
b) (3) Find the expected value of the random variable X.
c) (5) Find the probability P (X ≥ 9) and the conditional probability P (X ≥ 9|X ≤ 10).

Solution

a) All possible outcomes at drawing the balls are

(3, 3), (3, 4), (3, 5), (3, 6),

(4, 3), (4, 4), (4, 5), (4, 6),
(5, 3), (5, 4), (5, 5), (5, 6),
(6, 3), (6, 4), (6, 5), (6, 6).

They are equally probable. Possible sums are 6, 7, 8, 9, 10, 11 and 12. We get
1
P (X = 6) = 16 ,
2
P (X = 7) = 16 ,
3
P (X = 8) = 16 ,
4
P (X = 9) = 16 ,
3
P (X = 10) = 16 ,
2
P (X = 11) = 16 ,
1
P (X = 12) = 16 .

The probability function of the random variable X is

( )
6 7 8 9 10 11 12
1 2 3 4 3 2 1 .
16 16 16 16 16 16 16

b)
E(X) = 6 · 1
16 +7· 2
16 +8· 3
16 +9· 4
16 + 10 · 3
16 + 11 · 2
16 + 12 · 1
16 = 9.

c)
P (X ≥ 9) = 4
16 + 3
16 + 2
16 + 1
16 = 10
16 .
4 3
P (9 ≤ X ≤ 10) +
P (X ≥ 9|X ≤ 10) = = 16 16
= 7
13 .
P (X ≤ 10) 1
16 + 2
16 + 3
16 + 4
16 + 3
16
 .

M
. athematics for Business and Economics - Exam .Points
Exam date: August 24, 2018
.Year .1
Non-graphic calculator and one A4 sheet with formulas and other content . nrolment
E .
are allowed. Time: 90 minutes. Good luck!
. ull-time
f .2
.part-time
Name and surname .3
.Student ID
.4
. .
.Σ
B
Problem 1 (15 points)
Find all solutions of the system of linear equations

x + y + 2z + t = 0
−x + 5y + 4z + 5t = 0
2x − y + z − t = 0
3y + 3z − t = 0

Solution
   
1 1 2 1 0 1 1 2 1 0
 −1 5 4 5 0   0 6 6 6 0 
   ∼
 2 −1 1 −1 0  ∼  0 −3 −3 −3 0 
0 3 3 −1 0 0 3 3 −1 0
     
1 1 2 1 0 1 1 2 1 0 1 1 2 1 0
 0  
1 1 1 0   0 1 1 
1 0   0  1 1 1 0 
∼
 0 ∼ ∼ 
1 1 1 0   0 0 0 0 0   0 0 0 1 0 
0 3 3 −1 0 0 0 0 −4 0 0 0 0 0 0
Because the system is homogeneous it is solvable. We have the rank r(A) = 3, and the system
has n = 4 unknowns. We have infinitely many solutions and z is the free unknown.
     
1 1 2 1 0 1 1 2 0 0 1 0 1 0 0
 0 1 1 1 0   0 1 1 0 0   0 1 1 0 0 
     
 0 0 0 1 0 ∼ 0 0 0 1 0 ∼ 0 0 0 1 0 
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

The solutions are z ∈ R, x = −z, y = −z, t = 0.

Problem 2 (20 points)

Consider the function

x
f (x) = .
ln x
Find its domain, zeros, poles, the first and the second derivative, extrema, and intervals where
it is increasing or decreasing. What happens to the function value as x → 0 and as x → ∞?
Sketch its graph.

Solution

Domain: We can compute the logarithm only for x > 0. We exclude the pole x = 1 from the
domain. The domain is Df = (0, 1) ∪ (1, ∞).
Zeros: x = 0 is not a zero, since it doesn’t belong to the domain Df . There are no zeros.
Poles: ln x = 0 ⇒ x = 1. There is a pole at x1 = 1.
The derivatives are:
ln x − 1 2 − ln x
f ′ (x) = 2
, f ′′ (x) = .
(ln x) x(ln x)3
Extrema:
Solving f ′ (x) = 0 we get ln x = 1 ⇒ x2 = e ≈ 2.72.
Since f (e) = e ≈ 2.72 and f ′′ (e) = 1e > 0, there is a local minimum at T (2.72, 2.72).
The function is increasing on (e, ∞). It is decreasing on (0, 1) and (1, e).
lim f (x) = 0, lim f (x) = ∞.
x→0 x→∞

1 2 3 4 5 6

-2
Problem 3 (20 points)
Cynthia and Florian are buying a new house. Due to insufficient funds, they take a e70,000
loan. They will repay the loan in 120 monthly installments. The first installment will be paid
one month after taking the loan. The bank uses monthly conform compounding and the annual
interest rate is 3 %.
a) (10) Find the installments if all the installments are equal.
b) (10) Cynthia and Florian expect their income to increase in the future. They ask the bank
for a loan with unequal installments. Find the installments, if the first 60 installments are equal,
and the last 60 installments are double of the first.

Solution

a) Cynthia and Florian get the loan of B = 70,000 e. They repay the loan in 120 equal
installments denoted by a. The cash flows are shown in the diagram below:

.B

.a.a.a .a.a
.· · ·
.
.1 .2 .· · · .9 .10 .years
√ √
p
The monthly interest factor is r = 12 1 + 100 = 12 1.03. The time period covered in the problem
lasts for 10 years. The principle of equivalence, used at the end of the year 10, gives us
Br120 = ar119 + ar118 + ar117 + · · · + ar + a
r120 − 1
Br120 = a(r119 + r118 + · · · + r + 1) = a ·
r−1
r−1
a = Br120 ·
r120 −1
√
1.03 − 1
12

a = 70,000 · 1.03 10
· = 674.62 e
1.0310 − 1
The installment equals e674.62.
b) Denote the first installment by b. The last installment b is paid at the end of year 5. The
cash flows are shown in the diagram below:

.B

.2b .2b
2. b .2b
.b .b .b .b
.· · · .· · ·
.
.1 .2 .· · · .5 .6 .· · · .9 .10 .years

The principle of equivalence gives us

Br120 = br119 + br118 + · · · + br61 + br60 + 2br59 + 2br58 + · · · + 2br + 2b
r60 − 1
Br120 = br60 (r59 + r58 + · · · + r + 1) + 2b(r59 + r58 + ... + r + 1) = b(r60 + 2)
r−1
r−1
b = Br120 ·
− 1)(r60 + 2)
(r60
√
12
1.03 − 1
b = 70,000 · 1.03 ·
10
= 461.08 e
(1.03 − 1)(1.035 + 2)
5

The first 60 installments equal e461.08, the last 60 equal e922.16.

Problem 4 (15 points)
In each of the two jars, there are four balls labeled by numbers 2, 3, 4, 5. We draw one ball
from each jar The random variable X is the sum of numbers on the balls drawn.
a) (7) Find the probability function of the random variable X.
b) (3) Find the expected value of the random variable X.
c) (5) Find the probability P (X ≥ 6) and the conditional probability P (X ≥ 6|X ≤ 7).

Solution

a) All possible outcomes at drawing the balls are

(2, 2), (2, 3), (2, 4), (2, 5),

(3, 2), (3, 3), (3, 4), (3, 5),
(4, 2), (4, 3), (4, 4), (4, 5),
(5, 2), (5, 3), (5, 4), (5, 5).

They are equally probable. Possible sums are 4, 5, 6, 7, 8, 9 and 10. We get
1
P (X = 4) = 16 ,
2
P (X = 5) = 16 ,
3
P (X = 6) = 16 ,
4
P (X = 7) = 16 ,
3
P (X = 8) = 16 ,
2
P (X = 9) = 16 ,
1
P (X = 10) = 16 .

The probability function of the random variable X is

( )
4 5 6 7 8 9 10
1 2 3 4 3 2 1 .
16 16 16 16 16 16 16

b)
E(X) = 4 · 1
16 +5· 2
16 +6· 3
16 +7· 4
16 +8· 3
16 +9· 2
16 + 10 · 1
16 = 7.

c)
P (X ≥ 6) = 3
16 + 4
16 + 3
16 + 2
16 + 1
16 = 13
16 .
3 4
P (6 ≤ X ≤ 7) +
P (X ≥ 6|X ≤ 7) = = 16 16
= 7
10 .
P (X ≤ 7) 1
16 + 2
16 + 3
16 + 4
16