1

Instructor: Eugene G. Beringuel

Lesson 1. THE NATURE OF MATHEMATICS

Mathematics in Our World

Mathematics is not only confined to the four corners of a classroom. We can find it in
nature, industry and research. Read on, discover the mathematical patterns in nature and all
around us. Truly, mathematics is everywhere!

Patterns

A pattern constitutes a set of numbers or objects in which all the members are related with
each other by a specific rule. A big number of professions that use mathematics are interested in
one specific aspect – finding patterns, and being able to predict the future. Here are some
examples:

 In the last decade, police departments around the world have started to rely on
mathematics. Special algorithms can use data of past crimes to predict when and where
crimes might occur in the future.
 It turns out that earthquakes follow similar patterns to crimes. Just like one crime might
trigger retaliations, one earthquake might trigger aftershocks. In mathematics, this is
called a “self-exciting process”, and there are equations that can help predict when the
next one might occur.
 Bankers look at historical data of stock prices, interest rates and currency exchange rates
to estimate how financial markets might change in the future.

Mathematicians and scientists use highly complex algorithms to find and analyse all these
patterns, but we are going to start with simple ones.

Sequences

A sequence is a chain of numbers (or objects) that follow a particular pattern. The individual
elements in a sequence are called terms. Here are a few examples. Determine their patterns and
predict the next term.

4, 7, 10, 13, 16,

2, 3, 5, 8, 12,
1, 4, 9, 16, 25,
1, 8, 27, 64, 125,

13 = 1
23 = 8
33 = 27
43 = 64
53 = 125
63 =
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Difference Table

There are sequences whose patterns are not readily seen. One of the techniques for
determining the next term of these sequences is by constructing a difference table.

Example 1. Construct a difference table to predict the next term of the sequence
1, 7, 17, 31, 49, 71, __ .

Solution

1, 7, 17, 31, 49, 71,

1st difference 6 10 14 18 22

2nd difference 4 4 4 4

Answer:

Example 2. Construct a difference table to predict the next term of the sequence
-2, 1, 3, 9, 24, 53, ____

Solution

-2 1 3 9 24 53

1st d. 3 2 6 15 29

2nd d. -1 4 9 14

3rd d. 5 5 5

Answer:

Patterns in Nature

How you ever wondered why honeycomb cells are hexagonal in shape and a soap bubble
forms a sphere? Are such things just coincidence? Or is there something deeper at play? Here are
some patterns that you can spot in nature.

Fractals
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A fractal is a detailed pattern that looks similar at any scale and repeats itself over time. A
fractal’s pattern gets more complex as you observe it at larger scales. Examples of fractals in
nature are snowflakes, trees branching, lightning, and ferns.

Spirals

A spiral is a curved pattern that focuses on a center point and a series of circular shapes that
revolve around it. Examples of spirals are pine cones, pineapples, and hurricanes. A spiral shape
causes plants to condense themselves and not take up much space, causing it to be stronger and
more durable against the elements.

Voronoi

A Voronoi pattern provides clues to nature’s tendency to favor efficiency: the nearest
neighbour, shortest path, and tightest fit. Each cell in a Voronoi pattern has a seed point.
Everything inside a cell is closer to it than to any other seed. The lines between cells are always
halfway between neighboring seeds. Examples of Voronoi patterns are the skin of a giraffe, corn
on the cob, honeycombs, foam bubbles, cells in a leaf, and the head of a garlic.

Fibonacci Sequence

The first two Fibonacci numbers are 0 and 1. The next number is found by adding up the two
numbers before it. Hence, the Fibonacci numbers are as follows:

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, …

The sequence of numbers above is the famous Fibonacci sequence. It was first described by
mathematicians in India about 1300 years ago, and introduced to the west in 1202 by Leonardo
Pisano (a.k.a. Fibonacci). He was also responsible for introducing the Hindu-Arabic numerals to
Europe.
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The Fibonacci numbers occur frequently in nature. Here are some examples:

 The number of petals of a flower

 The number of clockwise and counter-clockwise spirals at the bottom of a pine cone are
consecutive Fibonacci numbers. The same is true for the number of clockwise and
counter-clockwise spirals formed by the seeds in a sunflower.
 The number of seeds in an apple
 The spiral shape of a nautilus shell and the Milky way galaxy are based on the Fibonacci
numbers.
 The human DNA molecule is 34 angstroms long and 21 angstroms wide – consecutive
Fibonacci numbers!

Atheist

Mathematics can help us make predictions.

Mathematics can make the ‘invisible’ visible.

REFERENCES:

Aufmann et al. (2013). Mathematical Excursions 3rd ed. Belmont: Brooks/Cole, Cengage Learning

Aufmann et al. (2018). Mathematics in the Modern World Philippine ed. Manila: Rex Book Store, Inc.
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Lesson 2. MATHEMATICAL LANGUAGE AND SYMBOLS

Objective: Translate statements into mathematical expressions or sentences.

Mathematics is a language, like any language it has its own symbols, syntax and rules. It
is also an exact science, so we have to express our mathematical thoughts and write
mathematical statements with high degree of precision. A small mistake may lead to a complete
distortion of the intended meaning (Oberste-Vorth et. al., 2012).

Dr. Carol Burns mentioned three characteristics of the mathematical language. The
characteristics of the language are the following.

 Precise (able to make very fine distinctions)

 Concise (able to say things briefly)
 Powerful (able to express complex thoughts with relative ease)

The mathematical analogue of a ‘noun’ is called an expression.

English Mathematics

NOUN (person, place, thing) EXPRESSION

Ex. Cathy, Ozamiz, bag Ex. 5, 2 + 3, ½, x + 7, y – 4

The mathematical analogue of a ‘sentence’ is also called a sentence.

ENGLISH MATHEMATICS

SENTENCE SENTENCE
Ex. Ex.
The capital of Malaysia is Kuala Lumpur. 3+4=7
The capital of Philippines is Cebu. 3+4=8

Mathematical Sentence

Definition. A mathematical sentence is the analogue of an English sentence; it is a correct

arrangement of mathematical symbols that states a complete thought. It makes sense to ask about
the TRUTH of a sentence: Is it true? Is it false? Is it sometimes true/sometimes false?
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Exercises

Classify each entry as a mathematical expression (EXP), or a mathematical sentence (SEN).

Classify the truth value of each entry that is a sentence: (always) true (T); (always) false (F); or
sometimes true/sometimes false (ST/SF).

(sample) 1+2 EXP

(sample) 1+2=3 SEN, T

1.) x – 1 Ans.

2.) x – 1 = 3 Ans.

3.) 1 + 2 + x Ans.

4.) x ÷ 3 Ans.

5.) x ÷ 4 = 2 Ans.

6.) 1 + 2 + x = x + 1 + 2 Ans.

7.) ¼ Ans.

8.) x > 7 Ans.

9.) y – 3 = y + 2 – 5 Ans.

10.) x + 5 = x – 7 Ans.

Exercises
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Translate each of the following into a mathematical expression/sentence. Use as few

variables as possible.

1. The sum of a number and 10

Let n be the number.

2.The product of two numbers

Let x be the 1st no.
Let y be the 2nd no.

3.One-half times the sum of two numbers

4.Twice a number
Let n be the number.

5. Five less a number

Five less than a number

Five is less than a number.

6. Six more than a number

7. The square of a number

8. Four times the square of a number

9. One-third of a number

10. The sum of two consecutive positive integers 3, 4 5, 6

Let n be the 1st n, n+1
n+1 = 2nd

11. The sum of the squares of two numbers

Let m be the 1st no.
Let n be the 2nd no.

12. The sum of three consecutive even integers 4, 6, 8

Let n be the 1st of the three consecutive ...

13. There are twice as many boys as there are girls.

Let b =no. of boys
g = no. of girls
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14. There are 10 more cars than jeeps.

15. A man’s age 7 years ago

Let p be his present age.

16. A man’s age 8 years from now

Let p be his present age.

17. The sum of two consecutive positive integers is 63.

18. The sum of two consecutive odd integers is 44. 3, 5

Let n be the 1st of the two consecutive odd integers. n n+2
n+2 = the 2nd

Sets
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A set is a collection of objects which are called elements of the set. If an object y belongs
to a particular set S, then we write y ϵ S.

y ϵ S is read as “ y is an element of S”

Let A be the set of natural numbers less than 7. Finite set

Let B be the set of vowels in the English alphabet. Finite set
Let C be the set of positive even numbers. Infinite set

Two Ways of Specifying a Set

1. Roster method – by writing all of its elements between braces.

Examples
A = {1, 2, 3, 4, 5, 6}
B = { a, e, i, o, u}
C = { 2, 4, 6, …}

2. Set-builder notation – presents the elements by stating their common properties. It is

useful when describing infinite sets.

Examples
A = {x / x is a natural number less than 7}
B = { x / x is a vowel in the English alphabet}
C = { x / x is a positive even number}

Exercises. Describe each of the following sets using a) the roster method; and b) the set-builder
notation.

1. Let D be the set of even integers between 1 and 9.

a) D = {2, 4, 6, 8}
b) D = { x / x is an even integer between 1 and 9 }

2. Let E be the set of odd integers between 2 and 10.

a) E = {3, 5, 7, 9}
b) E = { x / x is an odd integer between 2 and 10}

3. Let F be the set of distinct letters of the word Philippines.

a) F = {h, l, n, e, s, p, i }
b) F = { x / x is a distinct letter of the word Philippines }

Basic Number Sets

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Natural Numbers or Counting Numbers N = {1, 2, 3, … } infinite set

Whole Numbers W = {0, 1, 2, 3, … }

Integers I = { …, -2, -1, 0, 1, 2,… }

Rational Numbers Q = the set of all terminating or repeating decimals.

= the set of all numbers that can be expressed as quotient or fraction p/q
of two integers.

Ex. All fractions are rational numbers.

All integers are rational numbers.

0=0/1
1 = 1/1
2 = 2/1
-1 = -1/1

Irrational Numbers Q̄ = the set of all nonterminating, nonrepeating decimals.

= the set of all numbers that cannot be expressed as quotient or fraction
p/q of two integers.

Ex. π = 3.14159...
√2
1 + √2
2 + √2

Exercises. Determine if the given decimals are rational or irrational numbers.

0.275 rational (terminates)

0.1333… rational (repeats)
0.232323… rational (repeats)
1.414213562… irrational
5.67089 rational (terminates)

Real Numbers R = the set of all rational or irrational numbers.

All rational nos. are real nos.
All irrational nos. are real nos.

1/4 ϵ Q true
-4 ϵ N false
2/3 ϵ Q̄
false
0 ϵ W true
7/8 ϵ R true
πϵR true
0.5 ϵ Q true
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Subset

If A and B are sets, then A is called a subset of B, written A ⊆B , if and only if, every
element of A is also an element of B.

Example
B = {1, 2, 3, 4, 5, 6, 7}
A = {2, 4, 5, 6}
A ⊆B

B⊆ A
false
A⊆A
true
B⊆B
true

A set is a subset of itself.

Empty Set or Null Set

The empty set is a set which contains no elements. It is a subset of any set.

Notations: {}, Ø

Examples
The set of letters between b and c
The set of integers between 4 and 5
{}⊆{}
true
{}⊆ A
true

Exercise: Find all the subsets of A = {1, 2}.

Answer
{ }, {1}, {2}, {1, 2}

Quantifiers

1. Universal Quantifier

Symbol Meaning
∀ “For all” or “For every”

∀ x ∈ N , x +2∈ N read as “For all x element of ℕ, x + 2 is an element of ℕ.

∀ y ∈ R , y + 0= y read as “For all y element of R, y + 0 equals y”
∀ x , y ∈ N , x + y ∈ N read as “For all x and y elements of N , x + y is an element of N .

2. Existential Quantifier
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Symbol Meaning
∃ “There exists” or “For some”

∃ x ∈ Z(x is even) read as “There exists x element of Z such that x is even”

∃ c ∈ R(5 c=1) read as “There exists c element of R such that 5c = 1”

REFERENCES:

Aufmann et al. (2013). Mathematical Excursions 3rd ed. Belmont: Brooks/Cole, Cengage Learning

Aufmann et al. (2018). Mathematics in the Modern World Philippine ed. Manila: Rex Book Store, Inc.

Jamison, R.E. (2000). Learning the language of mathematics. Language and Learning
across the Disciplines, 4(1), 45-54

http://www.onemathematicalcat.org/pdf _files/LANG1.pdf

https://www.dpmms.cam.ac.uk/~wtg10/grammar.pdf
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Lesson 3. PROBLEM SOLVING AND REASONING

Inductive Reasoning

Inductive reasoning is the process of reaching a general conclusion by examining specific

examples.

When you examine a list of numbers and predict the next value in the list according to some
pattern you have observed, you are using inductive reasoning. The conclusion formed by using
inductive reasoning is a conjecture, since it may or may not be correct.

Examples of Inductive Reasoning

1. Henry is an American.
Henry is handsome.
Therefore, all Americans are handsome.

2. Alfred is a maritime student.

Alfred is male.
Therefore, all maritime students are males.

3. Ana and Elsa are female students of MU.

Ana and Elsa are beautiful.
Therefore, all female students of MU are beautiful.

Deductive Reasoning

Deductive reasoning is the process of reaching a conclusion by applying general assumptions,

procedures, or principles.

Examples of Deductive Reasoning

1. All men are mortal. (Major Premise)

Mario is a man. (Minor Premise)
Therefore, Mario is mortal. (Conclusion)

2. All of my cousins are tall.

Alex is one of my cousins.
Therefore, Alex is tall.

3. All birds have feathers.

Parrots are birds.
Therefore, parrots have feathers.
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Example

Determine whether each of the following arguments is an example of inductive reasoning or

deductive reasoning.

a. During the past 5 years, a tree has produced fruits every other year. Last year the tree did
not produce fruits, so this year the tree will produce fruits.
Inductive Reasoning

b. All home improvements cost more than the estimate. The contractor estimated that my
home improvement will cost $40,000. Thus my home improvement will cost more than
$40,000.
Deductive Reasoning

Logic Puzzles

Logic puzzles, similar to the one below, can be solved by using deductive reasoning and a chart
that enables us to display the given information in a visual manner.

Each of four neighbors, Sean, Maria, Sarah, and Brian, has a different occupation (editor, banker,
chef, or dentist). From the following clues, determine the occupation of each neighbor.

1. Maria gets home from work after the banker but before the dentist.
2. Sarah, who is the last to get home from work, is not the editor.
3. The dentist and Sarah leave for work at the same time.
4. The banker lives next door to Brian.

Editor Banker Chef Dentist

Sean x / x x
Maria / x x x
Sarah x x / x
Brian x x x /

C1: Banker, Maria, Dentist

C2: ____, ____, _____, Sarah
Answer

Sean is the banker

Maria is the editor
Sarah is the chef
Brian is the dentist
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Polya’s Four-Step Problem-Solving Strategy

1. Understand the problem.

2. Devise a plan.

3. Carry out the plan.

4. Review the solution.

Understand the Problem

 Can you restate the problem in your own words?
 Can you determine what is known about these types of problems?
 Is there missing information that, if known, would allow you to solve the problem?
 Is there extraneous information that is not needed to solve the problem?
 What is the goal?

Devise a plan
 Make a list of the known information.
 Make a list of information that is needed.
 Draw a diagram.
 Make an organized list that shows all the possibilities.
 Make a table or a chart.
 Work backwards.
The “Work Backward” method works well for problems where a series of operations is done on
an unknown number and you're only given the result. To use this method, start with the result and
apply the operations in reverse order until you find the starting number.

 Try to solve a similar but simpler problem.

 Look for a pattern.
 Write an equation. If necessary, define what each variable represents.
 Perform an experiment.

Carry out the Plan

 Work carefully.
 Keep an accurate and neat record of all your attempts.
 Realize that some of your initial plans will not work and that you may have to devise
another plan or modify your existing plan.

Review the Solution

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 Ensure that the solution is consistent with the facts of the problem.
 Interpret the solution in the context of the problem.
 Ask yourself whether there are generalizations of the solution that could apply to other
problems.

Example 1.

A baseball team won two out of their last four games. In how many different orders could they
have two wins and two losses in four games?

Solution

Understand the Problem. There are many different orders. The team may have won two straight
games and lost the last two (WWLL). Or maybe they lost the first two games and won the last
two (LLWW). Of course there are other possibilities, such as WLWL.

Devise a Plan We will make an organized list of all the possible orders. An organized list is a list
that is produced using a system that ensures that each of the different orders will be listed once
and only once.

Carry Out the Plan Each entry in our list must contain two Ws and two Ls. We will use a
strategy that makes sure each order is considered, with no duplications. One such strategy is to
always write a W unless doing so will produce too many Ws or a duplicate of one of the previous
orders. If it is not possible to write a W, then and only then do we write an L. This strategy
produces the six different orders shown below.

1. WWLL (Start with two wins)

2. WLWL (Start with one win)

3. WLLW

4. LWWL (Start with one loss)

5. LWLW

6. LLWW (Start with two losses)

Review the Solution We have made an organized list. The list has no duplicates and the list
considers all possibilities, so we are confident that there are six different orders in which a
baseball team can win exactly two out of four games.

2. How many possible swertres results are there?

Solution

Make an organized list (Write the results in increasing order)

Answer:
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Example 3. Find the three consecutive even integers whose sum is 198.

Solution 4, 6, 8

n,

Let n be the 1st of the three consecutive even integers.

n+2 = the 2nd of the ….
n+4 = the 3rd of the …

n+(n+2)+(n+4) = 198
n+n+n+2+4 = 198
3n + 6 = 198
3n = 198 – 6
3n = 192
n = 192/3 = 64 1st
n+2 = 64+2 = 66 2nd
n+4 = 64+4 = 68 3rd

4. Determine the digit 146 places to the right of the decimal point of the decimal
0.347534753475… Ans.

3 4 7 5
1st 2nd 3rd 4th
5th 6th 7th 8th
9th 10th 11th 12th

Determine the digit 916 places to the right of the decimal point of the decimal 0.213213213 ...

Answer:
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5. How many squares are there in the following figure?

6 x 6 grid

Total no. of squares =

Answer: squares

REFERENCES:

Aufmann et al. (2013). Mathematical Excursions 3rd ed. Belmont: Brooks/Cole, Cengage Learning

Aufmann et al. (2018). Mathematics in the Modern World Philippine ed. Manila: Rex Book Store, Inc.

Jamison, R.E. (2000). Learning the language of mathematics. Language and Learning
across the Disciplines, 4(1), 45-54

http://www.onemathematicalcat.org/pdf _files/LANG1.pdf

https://www.dpmms.cam.ac.uk/~wtg10/grammar.pdf
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Lesson 4. DESCRIPTIVE STATISTICS

Statistics involves the collection, organization, summarization, presentation, and

interpretation of data.

Areas / Branches of Statistics

1. Descriptive Statistics is the branch of statistics that involves the collection,

summarization, organization, and presentation of data.

2. Inferential Statistics is the branch that interprets and draws conclusions from the
data.

Population and Sample

Statisticians often collect data from small portions of a large group in order to
determine information about the group. The entire group under consideration is known as
the population, and any subset of the population is called a sample.

Population
All graduating students of Misamis University during S.Y. 2020-2021
All registered voters in Ozamiz City
All sales made by a restaurant last month
Weights of all college students of MU

Sample
A random sample of 50 graduating students of Misamis University during S.Y. 2020-
2021
A random sample of 100 registered voters in Ozamiz city
A random sample of 80 sales made by a restaurant last month
Weights of a random sample of 200 college students of MU

Summation Notation

n
∑ x i= x1 + x2 +.. .+ x n
i =1 read as “summation of x sub i where i is from 1 to n.”

4
∑ x 2i =x12 + x 22 + x 23 + x 24
i =1
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3
∑ ( x i −μ )2 =( x 1 −μ )2 + ( x 2−μ )2 + ( x3 −μ ) 2
i =1

Measures of Central Tendency

1. The Arithmetic Mean

The mean of n numbers is the sum of the numbers divided by n.

n
∑ xi
i=1

Mean = n
μ → population mean . Greek letter “ mu”
x̄ → sample mean “x bar”

Rounding Rule for the Mean: The mean should be rounded to one more decimal place
than occurs in the raw data.

Example 1. Six friends in a biology class of 20 students received test scores of 92, 84,
65, 76, 88, and 90. Find the mean of these sample test scores.

Solution

n=6

92+84 +65+76+88+90 495

x̄= = =82 .5
6 6 one decimal place

Example 2. The number of employees at 5 different drugstores are 3, 5, 6, 4, and 6.

Treating the data as a population, find the mean number of employees for the 5 stores.

Solution
N=5
3+5+6 +4 +6 24
μ= = =4 . 8
5 5

Example 3. The weights of a random sample of 4 college students are 116.2, 130.4,
140.5, and 135.6 lbs. Find the mean weight of these students.

Solution
n=4
116 .2+130 . 4 +140 .5+135 . 6 522. 7
x̄= = =130. 675=130. 68
4 4 lbs two decimal places
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2. The Median

The median of a set of observations arranged in an increasing order of magnitude is

the middle value when the number of observations is odd or the arithmetic mean of the
two middle values when the number of observations is even.

~μ
----- population median read as “mu curl”
~x
---- sample median read as “x curl”

Example1. On 5 term tests in statistics a student has made grades of 82, 93, 86, 92, and
79. Find the median for this population of grades.

Solution

Arranging the data values in increasing order yields

79, 82, 86, 92, 93.

~
The middle value is 86; hence μ=86 .

Example 2. The nicotine contents for a random sample of 6 cigarettes of a certain brand
are found to be 2.3, 2.7, 2.5, 2.9, 3.1, and 1.9 milligrams. Find the median.

Solution

Arranging the data values in increasing order yields

1.9, 2.3, 2.5, 2.7, 2.9, 3.1

The two middle values are 2.5 and 2.7; hence

~ 2. 5+2 .7
x= =2. 6
2 mg

3. The Mode

The mode of a set of observations is that value which occurs most often or with the
greatest frequency. The mode does not always exist. This is certainly true when all
observations occur with the same frequency. For some sets of data there may be several
values occurring with the greatest frequency in which case we have more than one mode.
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Examples

Find the mode or modes for each of the following sets of data.

a). 9, 10, 5, 9, 9, 7, 8, 6, 10, and 11.

Answer: The mode is

b). 2, 0, 3, 1, 2, 4, 2, 5, 4, 0, 1, and 4
Answer: The modes are

c). 8, 5, 6, 7, and 4
Answer: The mode

d) 2, 3, 2, 3, 4, 4

4. The Weighted Mean

The weighted mean of the n numbers x1 , x2 , … , x n with the respective

weights w1 , w2 , … , wn is

n
∑ ( xi w i)
weighted mean= i =1n
∑ wi
i =1

Example. The table below shows John’s summer course grades. Use the weighted mean
formula to find John’s GPA for the fall semester. Round off the result to two decimal
places (nearest hundredths).

Course Grade Units

English 1.5 4
History 2.0 3
Chemistry 2.5 4
Algebra 1.0 3

Solution

4
∑ ( xi w i) ( 1. 5×4 )+ ( 2 .0×3 ) + ( 2 .5×4 ) + ( 1. 0×3 )
weighted mean= i =14 =
4+ 3+4 +3
∑ wi
i =1
 23

6+6+10+3 25
= = =1 .79
14 14 two decimal places

Measures of Variation / Dispersion

The three basic measures of variation are range, variance, and standard deviation.

I. Range. The range of a set of data is the difference between the largest and smallest number
in the set.

Range = Largest - Smallest

II. Population Variance

Given the finite population x1 , x2 , … , xN , the population variance is

N
∑ ( x i− μ )2
i=1
σ 2=
N “sigma squared”

III. Sample Variance

Given a random sample x1 , x2 , … , xn , the sample variance is

(∑ )
n n 2
n∑ x 2i − xi
i=1 i=1
s2=
n ( n−1 )

IV. Standard Deviation. The standard deviation is the positive square root of the variance.

σ =√ σ 2 population standard deviation

s= √ s2 sample standard deviation

Example 1. The following scores were given by 6 judges for a gymnast’s performance in the
vault of an international meet : 7, 5, 9, 7, 8, and 6. Find the range, variance, and the standard
deviation of this population.

Solution

N=6
Range = 9 – 5 = 4

7+5+ 9+7+8+ 6 42
μ= = =7 . 0
6 6
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6
∑ ( x i−7 )2 ( 7−7 )2 + (5−7 )2 + ( 9−7 )2 + ( 7−7 )2 + ( 8−7 )2 + ( 6−7 )2
σ 2 = i=1 =
6 6
0+4 +4 +0+1+1
6
10
=
6
=1.6667 four decimal places

σ=√ 1.6667=1.29 two decimal places

Example 2. A comparison of coffee prices at 4 randomly selected grocery stores in San Diego
showed increases from the previous month of 12, 15, 17, and 20 cents for a 200-gram jar. Find
the range, variance, and the standard deviation of this random sample of price increases.

Solution

n=4
Range = 20 – 12 = 8 cents

(∑ )
n n 2
n∑ x 2i − xi
i=1 i=1
s2=
n ( n−1 )

4
∑ x i=12+15+ 17+20=64
i =1

4
∑ x 2i =122 +152 + 172 +20 2=144 +225+289+ 400=1 , 058
i =1

2
2 4 ( 1 , 058 )−( 64 ) 4 ,232−4096 136
s= = = =11 .3333
4 ( 4−1 ) 12 12 four decimal places

s= √11 .3333=3.37 cents two decimal places

Example 3. Find the range, variance, and standard deviation of the given sample below.
4kg, 6kg, 7kg, 9kg, 11kg

Solution
n= 5
Range = 11 – 4 = 7 kg

(∑ )
n n 2
n∑ x 2i − xi
i=1 i=1
s2=
n ( n−1 )
5
∑ x i=4+ 6+7+ 9+11=37
i =1
 25

5
∑ x 2i =4 2 +6 2 +72 +92 + 112=16+ 36+49+ 81+ 121=303
i =1

2 5 ( 303 ) −( 37 )2 1515−1369 146

s= = = =7 . 3
5 ( 5−1 ) 20 20
s= √ 7.3=2.70 kg

Exercise Set 6

1. Find the mean, median, mode, range, variance and standard deviation of the given
population.
21, 15, 18, 18

2. Find the mean, median, mode, range, variance and standard deviation of the given
sample.
12, 9, 11, 10, 13, 14

3. Compute the GPA (weighted mean) in nearest hundredths.

Subject Grade Units

Math 1 1.5 3
History 1.0 3
Chemistry 2.5 4
English 1.75 3
Filipino 1.5 3
 26

Measures of Relative Position

1. Z – Scores

The z-score for a given data value x is the number of standard deviations that x is above
or below the mean of the data. The following formulas show how to calculate the z-score
for a data value x in a population and in a sample.

x −μ
zx =
σ for population

x − x̄
zx =
s for sample

Example 1.

Mario has taken two tests in his history class. He scored 72 on the first test, for
which the mean of all scores was 65 and the standard deviation was 8. He received a 60
on the second test, for which the mean of all scores was 45 and the standard deviation
was 12. In comparison to the other students, did Mario do better on the first test or the
second test?

Solution
Find the z – score for each test.

1st Test 2nd test

x = 72 x = 60
µ = 65 µ = 45
σ=8 σ = 12

72−65 60− 45
z 72= =0 . 88 z 60 = =1. 25
8 12
 27

Mario scored 0.88 standard deviation above the mean on the first test and 1.25 standard
deviations above the mean on the second test. These z-scores indicate that, in comparison
to his classmates, Mario scored better on the second test than he did on the first test.

2. Percentiles

Percentiles are values that divide a set of observations into 100 equal parts. These
values, denoted by P1, P2, … , P99 , are such that 1% of the data falls below P1 , 2% of the
data falls below P2 , … , and 99% falls below P99 .

3. Quartiles
Quartiles are values that divide a set of observations into 4 equal parts. These
values denoted by Q1 , Q2 , and Q3 , are such that 25% of the data falls below Q1 , 50%
falls below Q2 , and 75% falls below Q3 .

Example. The following table lists the calories per 100 ml of 25 popular sodas. Find the
P50 , P84 and Q1 for the data.

43 26 41 62 39
37 53 36 36 45
42 73 58 32 48
40 48 42 50 40
53 45 39 49 56

Solution

n = 25
Arrange first the data values in an increasing order.
1st 7th 12th 13th
26, 32, 36, 36, 37, 39, 39, 40, 40, 41, 42, 42, 43, 45, 45, 48, 48, 49, 50, 53,
21st 22nd 25th
53, 56, 58, 62, 73

i.) No. of data values below P50 = 50% of 25 = .5 x 25 = 12.5 round up

P50 = 13th data value = 43

ii.) No. of data values below P84 = .84 x 25 = 21

21 st+22 nd 53+ 56
P84= = =
2 2 54.5
 28

iii.) No. of data values below Q1 = .25 x 25 = 6.25 round up

Q1= 7th data value = 39

Exercise. Find P45 , P72 , Q1, and Q3 for the data below.

5, 6, 7, …, 40

n= 36

1st 2nd 3rd 36 th 17th

5, 6, 7, …, 40 21

Solution

n = 36

a) No. of data values below P45 = .45 x 36 = 16.2 round up

P45 = 17th data value = 21

b) No. of data values below P72 = .72 x 36 = 25.92 round up

P72 = 26th data value = 30

c) No. of data values below Q1 = .25 x 36 = 9

9 th+10 th 13+14
Q1 = = =13 . 5
2 2

d) No. of data values below Q3 = .75 x 36 = 27

27 th+28 th 31+32
Q3 = = =31. 5
2 2

References
Triola, Mario F. (1992). Elementary Statistics 5th ed. Addison-Wesley
Walpole, R. E. (1982). Introduction to statistics. New York: Macmillan.
 29

Lesson 5. NORMAL DISTRIBUTION

One of the most important probability distribution in the entire field of statistics is
the normal distribution. Its graph, called the normal curve, is the bell-shaped curved of
figure 1 that describes so many sets of data that occur in nature, industry, and research.

Figure 1

A continuous random variable X having the bell-shaped distribution of figure 1 is

called a normal random variable.

Properties of a Normal Distribution

1. The mean, median, and mode are equal.

2. The normal curve is bell-shaped and is symmetric about the mean.
3. The total area under the curve is equal to one or 100%.
4. The normal curve approaches, but never touches the x-axis.
5. Between μ – σ and μ + σ the graph is concave down and elsewhere the graph is
concave up. The points at which the graph changes concavity are called inflection
points.

Empirical Rule for a Normal Distribution

 30

In a normal distribution, approximately

■ 68% of the data lie within 1 standard deviation of the mean.
■ 95% of the data lie within 2 standard deviations of the mean.
■ 99.7% of the data lie within 3 standard deviations of the mean.

The Standard Normal Distribution

The standard normal distribution is the normal distribution that has a mean of 0
and a standard deviation of 1.

z
 31

Table of Areas Under the Standard Normal Curve

This table shows the area between zero (the mean of the standard normal variable) and z.
For example, if z=1.61, look at the row titled 1.6 and then move over to the column titled .01 to
get the result .4463.

Z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
0. .012 .027
.0000 .0040 .0080 .0150 .0199 .0239 .0319 .0359
0 0 9
0. .051 .067
.0398 .0438 .0478 .0557 .0596 .0636 .0714 .0754
1 7 5
0. .091 .106
.0793 .0832 .0871 .0948 .0987 .1026 .1103 .1141
2 0 4
0. .129 .144
.1179 .1217 .1253 .1331 .1368 .1406 .1480 .1517
3 3 3
0. .166 .180
.1554 .1591 .1628 .1700 .1736 .1772 .1844 .1879
4 4 8
0. .201 .215
.1915 .1950 .1985 .2054 .2088 .2123 .2190 .2224
5 9 7
0. .235 .248
.2257 .2291 .2324 .2389 .2422 .2454 .2518 .2549
6 7 6
0. .267 .279
.2580 .2612 .2642 .2704 .2734 .2764 .2823 .2852
7 3 4
0. .296 .307
.2881 .2910 .2939 .2996 .3023 .3051 .3106 .3133
8 7 8
0. .328 .334
.3159 .3186 .3212 .3264 .3289 .3315 .3365 .3389
9 8 0
1. .348 .355
.3413 .3438 .3461 .3508 .3531 .3554 .3559 .3621
0 5 7
1. .370 .379
.3642 .3665 .3686 .3729 .3749 .3770 .3810 .3830
1 8 0
1. .390 .398
.3849 .3869 .3888 .3925 .3944 .3962 .3997 .4015
2 7 0
1. .4032 .4049 .4066 .408 .4099 .4115 .4131 .414 .4162 .4177
 32

3 2 7
1. .423 .429
.4192 .4207 .4222 .4251 .4265 .4279 .4306 .4319
4 6 2
1. .437 .441
.4332 .4345 .4357 .4382 .4394 .4406 .4429 .4441
5 0 8
1. .448 .452
.4452 .4463 .4474 .4495 .4505 .4515 .4535 .4545
6 4 5
1. .458 .461
.4554 .4564 .4573 .4591 .4599 .4608 .4625 .4633
7 2 6
1. .466 .469
.4641 .4649 .4656 .4671 .4678 .4686 .4699 .4706
8 4 3
1. .473 .475
.4713 .4719 .4726 .4738 .4744 .4750 .4761 .4767
9 2 6
2. .478 .480
.4772 .4778 .4783 .4793 .4798 .4803 .4812 .4817
0 8 8
2. .483 .485
.4821 .4826 .4830 .4838 .4842 .4846 .4854 .4857
1 4 0
2. .487 .488
.4861 .4864 .4868 .4875 .4878 .4881 .4887 .4890
2 1 4
2. .490 .491
.4893 .4896 .4898 .4904 .4906 .4909 .4913 .4916
3 1 1
2. .492 .493
.4918 .4920 .4922 .4927 .4929 .4931 .4934 .4936
4 5 2
2. .494 .494
.4938 .4940 .4941 .4945 .4946 .4948 .4951 .4952
5 3 9
2. .495 .496
.4953 .4955 .4956 .4959 .4960 .4961 .4963 .4964
6 7 2
2. .496 .497
.4965 .4966 .4967 .4969 .4970 .4971 .4973 .4974
7 8 2
2. .497 .497
.4974 .4975 .4976 .4977 .4978 .4979 .4980 .4981
8 7 9
2. .498 .498
.4981 .4982 .4982 .4984 .4984 .4985 .4986 .4986
9 3 5
Z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
3. .498 .498
.4987 .4987 .4987 .4988 .4989 .4989 .4990 .4990
0 8 9
3. .499 .499
.4990 .4991 .4991 .4992 .4992 .4992 .4993 .4993
1 1 2
3. .499 .499
.4993 .4993 .4994 .4994 .4994 .4994 .4995 .4995
2 4 5
3. .499 .499
.4995 .4995 .4995 .4996 .4996 .4996 .4996 .4997
3 6 6
 33

3. .499 .499
.4997 .4997 .4997 .4997 .4997 .4997 .4997 .4998
4 7 7
3. .499 .499
.4998 .4998 .4999 .4999 .4999 .4999 .4999 .4999
6 9 9
3.
.5000
9

What is the area from z = 0 to z = 2.06 ?

What is the area from z = 0 to z = 3.15 ?
What is the area from z =0 to z = 3.06 ?
What is the area from z = 0 to z = 3.54?
What is the area from z = 0 to z = 0.07 ?

Example 1.
Find the area of the standard normal distribution between z = - 1.27 and z = 0.

Solution
Since a normal curve is symmetric, the area between z = - 1.27 and z = 0 is just equal to
the area between z = 0 and z = 1.27. From the table, the area is 0.3980.

Example 2.
Find the area of the standard normal distribution to the right of z = 2.08.
Solution
Area to the right of z = 2.08
= 0.5 – (Area from z=0 to z = 2.08)
= 0.5 – 0.4812
= 0.0188

Example 3.
Find the area of the standard normal distribution between z = - 2.14 and z = 1.59.
Solution
Area = (Area bet. z=0 and z = 2.14) + (Area bet. z =0 and z = 1.59)
= 0.4838 + 0.4441
= 0.9279

Example 4.
Find the area of the standard normal distribution between z = 1.07 and z = 2.95.
Solution

Area = (area bet. z =0 and z =2.95) – (area bet. z = 0 and z = 1.07)

 34

=0.4984 – 0.3557
= 0.1427

Example 5.
Find the area of the standard normal distribution to the right of z = -0.35.
Solution

Area = (area bet. z = 0 and z = 0.35) + (area to the right of z = 0)

= 0.1368 + 0.5
= 0.6368

Applications of the Normal Distribution

Example 1.
A coffee machine dispenses coffee into 11-ounce cups. Tests show that the actual
amount of coffee dispensed is normally distributed, with a mean of 8.4 oz and a standard
deviation of 0.1 oz.
a. What percent of cups will receive less than 8.2 oz of coffee?
b. What percent of cups will receive between 8.3 oz and 8.7 oz of coffee?

Solution
x = amount of coffee dispensed (normal variable)
μ = 8.4 oz
σ = 0.1 oz

a) x = 8.2 oz
x−μ 8 . 2−8 . 4
z 8. 2 = = =−2 .00
σ 0.1 two decimal places
Area to the left of (x = 8.2 oz) = Area to the left of (z = -2.00)
= 0.5 – 0.4772
= 0.0228
Answer: 2.28%

b) x = 8.3 x = 8.7
x −μ 8 . 3−8. 4
z 8. 3 = = =−1 . 00
σ 0. 1

x−μ 8. 7−8 . 4
z 8. 7 = = =3 . 00
σ 0 .1

Area between x = 8.3 and x = 8.7

= Area between z = -1.00 and z = 3.00
= 0.3413 + 0.4987
= 0.84
Answer: 84%
 35

Example 2. A study of the careers of professional football players shows that the lengths
of their careers are normally distributed with a mean of 6.8 years and a standard deviation
of 1.3 years.
a. What percent of professional football players have a career of more than 6.4 years?
b. If a professional football player is chosen at random, what is the probability that the
player will have a career of between 6.4 and 6.7 years?

Exercises.

1. Find the area of the standard normal distribution to the right of z = -1.24.
2. Find the area of the standard normal distribution of the left of z = -2.17.
3. Find the area of the standard normal distribution between z = -1.18 and z = 3.10.
4. A delivery company found that the weights of their parcels where normally distributed
with a mean of 30 oz and a standard deviation of 7.2 oz.
a. What percent of their parcels weighed less than 32 oz?
b. What percent of their parcels weighed between 28 oz and 34 oz ?

References
Triola, Mario F. (1992). Elementary Statistics 5th ed. Addison-Wesley
Walpole, R. E. (1982). Introduction to statistics. New York: Macmillan.
 36

Lesson 6. SIMPLE HYPOTHESIS TEST

 37

A statistical hypothesis is an assertion or conjecture concerning one or more populations.

Null hypothesis (denoted by H0 )

The statement of a zero or null difference that is directly tested. This will correspond to
the original claim if that claim includes the condition of no change or difference (such as =, ≤ ,
≥). Otherwise, the null hypothesis is the negation of the original claim. We test the null
hypothesis directly in the sense that the final decision will be either Rejection of H0 or Do not
reject H0 .

Alternative hypothesis (denoted by H1 )

The statement that must be true if the null hypothesis is false.

Type I and Type II errors

Type I error : The mistake of rejecting the null hypothesis when it is true.
Type II error : The mistake of failing to reject the null hypothesis when it is false.

Level of Significance (α)

The probability of making a type I error is called the significance level of a test. A 5%
significance level implies that we are 95% confident that we have made the right decision. A 1%
significance level implies that we are 99% confident that we have made the right decision.

One-tailed Tests

Ex. 1. H0 : μ ≥ 80 kg
H1: μ < 80 kg

Ex. 2. H0 : μ ≤ 60 years
H1: μ > 60 years

Two-tailed Tests

Ex. 1. H0 : μ = 80 kg
H1: μ ≠ 80 kg

Ex. 2. H0 : μ = 60 years
H1: μ ≠ 60 years

H0 H1
μ = μ0 μ ≠ μ0 Two-tailed
μ ≥ μ0 μ <μ0 One-tailed
μ ≤ μ0 μ >μ0 One-tailed

Testing a Claim About a Mean

Steps in Hypothesis Testing

 38

1. Formulate the null hypothesis (H0) and the alternative hypothesis (H1).
2. Set the level of significance, α .
3. Determine the test to be used (z-test or t-test) and the critical regions.
4. Compute for z or t.
5. Make a decision. If the computed value of z or t falls in a critical region reject H0 .
6. State the conclusion.

Z – test

Use the z-test if σ is known or n ≥ 30. If σ is unknown and n ≥ 30 use the value of s for σ.

H0 Value of Test Statistic H1 Critical Region

μ < μ0 Z < - Zα
( x̄−μ0 ) √ n μ >μ0 Z > Zα
μ=μ0 z=
σ
μ ≠ μ0 Z < - Zα/2 and Z > Zα/2

Critical Values
Z -test α = 0.01 α = 0.05 α = 0.025
One-tailed ± 2.33 ± 1.645 ± 1.96
Two-tailed ± 2.575 ± 1.96 ± 2.33

Wording of Final Conclusion

Case 1. The original claim corresponds to H0 and the decision is Reject H0

“There is sufficient evidence to warrant rejection of the claim that … (original claim) “

Case 2.The original claim corresponds to H0 and the decision is Do not reject H0

“ There is not sufficient evidence to warrant rejection of the claim that … (original
claim)”

Case 3. The original claim does not correspond to H0 and the decision is Reject H0

“ The sample data support the claim that … (original claim)”

Case 4. The original claim does not correspond to H0 and the decision is Do not
reject H0

“There is not sufficient sample evidence to support the claim that … (original claim)”

1. A random sample of 49 business establishments shows that the average monthly water
consumption is 35 cubic meters with a standard deviation of 5 cubic meters. Test the
claim that the average monthly water consumption is 34 cubic meters at 1% level of
significance.
 39

Solution

n = 49
x̄ = 35 cu. m.
σ = s = 5 cu. m.

Claim : μ = 34 cu. m. (It corresponds to H0)

Step 1. H0 : μ = 34 cu. m.
H1 : μ ≠ 34 cu. m.

Step 2. α = 0.01

Step 3. Use z-test (Two-tailed)

Critical Regions: z < - 2.575 and z > 2.575

Step 4. Computations:
( x̄−μ0 ) √ n
z=
σ
( 35−34 ) √ 49
z= =1. 40
5

Step 5. Decision: Do not reject H0

Step 6. Conclusion:

There is not sufficient evidence to warrant rejection of the claim that the average
monthly water consumption is 34 cubic meters.

2. It is claimed that an automobile is driven on the average less than 20,000 km per year. To
test this claim, a random sample of 100 automobile owners are asked to keep a record of
the kilometers they travel. Would you agree with this claim if the random sample showed
an average of 22,500 km and a standard deviation of 3,900 km? Use a 0.05 level of
significance.

Solution

n = 100
x̄ = 22,500 km
σ = s = 3,900 km

Claim : μ < 20,000 km (It does not correspond to H0.)

Step 1. H0 : μ ≥ 20,000 km
H1 : μ < 20,000 km

Step 2. α = 0.05

Step 3. Use the z-test (One-tailed)

Critical Region: z < - 1.645

Step 4. Computations:
 40

( 22,500−20,000 ) √ 100
z= =6.41
3 ,900
Step 5. Decision: Do not reject H0

Step 6. Conclusion:

There is not sufficient sample evidence to support the claim that an automobile is
driven on the average less than 20,000 km per year.

3. A random sample of 100 recorded deaths in the United States during the past year
showed an average life span of 71.8 years, with a standard deviation of 8.9 years. Does
this seem to indicate that the average life span today is greater than 70 years? Use a 0.05
level of significance.

Solution

n = 100
x̄ = 71.8 yrs
σ = s = 8.9 yrs

Claim : μ > 70 yrs (It does not correspond to H0.)

Step 1. H0 : μ ≤ 70 yrs
H1 : μ > 70 yrs

Step 2. α = 0.05

Step 3. Use the z-test (One-tailed)

Critical Region: z > 1.645

Step 4. Computations:

( 71. 8−70 ) √ 100

z= =2 .02
8.9
Step 5. Decision: Reject H0 .

Step 6. Conclusion:

The sample data support the claim that the average life span today is greater than
70 years.

t – test
 41

Use the t-test if σ is unknown and n < 30.

H0 Value of Test Statistic H1 Critical Region

μ < μ0 t < - tα
( x̄−μ0 ) √n μ >μ0 t > tα
μ=μ0 t=
s

v = n – 1 no. of μ ≠ μ0 t < - tα/2 and t > tα/2

degrees of freedom

1. A random sample of 8 cigarettes of a certain brand has an average nicotine content of 4.2
mg and a standard deviation of 1.4 mg. Is this in line with the manufacturer’s claim that
the average nicotine content is less than 3.5 mg? Use a 0.01 level of significance and
assume the distribution of the nicotine contents to be normal.

2. Last year the employees of the city health department donated an average of $ 8 to the
rescue squad. Test the hypothesis at the 0.01 level of significance that the average
contribution this year is still $ 8 if a random sample of 12 employees showed an average
donation of $ 8.90 with a standard deviation of $ 1.75.

3. It is claimed that the average time it takes high school seniors to complete a standardized
test is more than 30 minutes. A random sample of 24 high school seniors took an average
of 33.1 minutes to complete this test with a standard deviation of 4.3 minutes. Test the
claim at 5% level of significance.

References
Triola, Mario F. (1992). Elementary Statistics 5th ed. Addison-Wesley
Walpole, R. E. (1982). Introduction to statistics. New York: Macmillan.

Lesson 7. SIMPLE LINEAR REGRESSION

 42

Bivariate Data

A data set with two variables contains what is called bivariate data. This lesson
discusses ways to describe the relationship between two variables. For example, you may
wish to describe the relationship between the heights and weights of people to determine
the extent to which taller people weigh more.

Simple Linear Regression

When performing research studies, scientists often wish to know whether two
variables are related. If the variables are related, a scientist may then wish to find an
equation that can be used to model the relationship.
In simple linear regression, we predict scores on one variable from the scores on a
second variable. The variable we are predicting is called the criterion variable and is
referred to as Y. The variable we are basing our predictions on is called the predictor
variable and is referred to as X.
The example data in Table 1 are plotted in Figure 2. You can see that there is a
relationship between X and Y. If you were going to predict Y from X, the higher the
value of X, the higher your prediction of Y.

X Y
2 4
3 6
5 6
7 9
9 11

Table 1

12

10

6
Y
4

0
1 2 3 4 5 6 7 8 9 10
X

Figure 2. Scatter Plot

 43

Linear regression consists of finding the best-fitting line through the points. The
best-fitting line is called the line of best fit or the least-squares regression line.

12

10 f(x) = 0.939024390243903 x + 2.31707317073171

6 Series2
Linear (Series2)
4

0
1 2 3 4 5 6 7 8 9 10

The Formulas for the Least-Squares Regression Line

y=ax+b
n ∑ xy −( ∑ x )( ∑ y )
a= 2
n ∑ x 2 −( ∑ x )

b= ȳ−a x̄

Example 1. Find the equation of the LSRL for the data on Table 1. Use the equation of
the LSRL to predict the value of y when x = 12.

x y xy x2
 44

Example 2. Given the bivariate data:

x 1 2 3 5 6
y 7 5 3 2 1

a. Find the equation of the LSRL.

b. Predict the value of y when x = 7.

x y xy x2
1 7 7 1
2 5 10 4
3 3 9 9
5 2 10 25
6 1 6 36
Total 17 18 42 75
 45

n=5

∑ x= 17
∑ y= 18
∑ xy= 42
∑ x2= 75
17
x̄= =3 . 4
5

18
ȳ= =3 .6
5

n ∑ xy −( ∑ x )( ∑ y ) 5 ( 42 )−( 17 ) ( 18 ) 210−306 −96

a= = = =
2
n ∑ x 2 −( ∑ x ) 5 ( 75 )−( 17 )2 375−289 86

a = -1.1162790698

b= ȳ−a x̄
b = 3.6 – (-1.1162790698)(3.4)

= 3.6 + 3.7953488373

= 7.3953488373

y = - 1.116 x + 7.395 LSRL

When x = 7

y = -1.116(7) + 7.395 = -0.417 = 0

References
Triola, Mario F. (1992). Elementary Statistics 5th ed. Addison-Wesley
Walpole, R. E. (1982). Introduction to statistics. New York: Macmillan.
 46

Lesson 8. LINEAR CORRELATION COEFFICIENT

(PEARSON’S CORRELATION COEFFICIENT)

To determine the strength of a linear relationship between two variables, statisticians use
a statistic called the linear correlation coefficient, which is denoted by the variable r .

n ( ∑ xy )−( ∑ x )( ∑ y )
r=
√ n ( ∑ x ) −( ∑ x ) . √ n ( ∑ y ) −( ∑ y )
2 2 2 2

−1≤r ≤1
 47

If r is positive , the relationship between the variables has a positive correlation. In this
case, if one variable increases, the other variable also tends to increase. If r is negative, the
relationship between the variables has a negative correlation. In this case, if one variable
increases, the other variable tends to decrease.

r=1 → perfect positive correlation

0.5 < r < 1 → strong positive correlation
r = 0.5 → positive correlation
0 < r < 0.5 → weak positive correlation
r=0 → no correlation
- 0.5 < r < 0 → weak negative correlation
r = - 0.5 → negative correlation
-1 < r < -0.5 → strong negative correlation
r = -1 → perfect negative correlation

Example 3. Given the bivariate data:

X Y
2 4
3 6
5 6
7 9
9 11

Compute the value of r and interpret the result.

Example 4. Given the bivariate data:

x 1 2 3 5 6
y 7 5 3 2 1

Compute the value of r and interpret the result.

x y xy x2 y2
1 7 7 1 49
2 5 10 4 25
3 3 9 9 9
 48

5 2 10 25 4
6 1 6 36 1
Total 17 18 42 75 88

n ( ∑ xy )−( ∑ x )( ∑ y )
r=
√ 2
√
n ( ∑ x 2 ) −( ∑ x ) . n ( ∑ y 2 ) −( ∑ y )
2

5 ( 42 )−( 17 )( 18 ) −96 −96

r= = =
√ 5 ( 75 )−( 17 )2 . √ 5 ( 88 )−( 18 )2 √ 86 √ 116 √ 9976
r = - 0.9611540778

There is a strong negative correlation.

Example 5. Given the bivariate data:

x 2 4 6 8 10 7
y 6 1 15 3 14 7

x y xy x2 y2
2 6 12 4 36
4 1 4 16 1
6 15 90 36 225
8 3 24 64 9
10 14 140 100 196
7 7 49 49 49
Total 37 46 319 269 516
 49

n=6

n ( ∑ xy )−( ∑ x )( ∑ y )
r=
√ n ( ∑ x ) −( ∑ x ) . √ n ( ∑ y ) −( ∑ y )
2 2 2 2

6 ( 319 )−( 37 )( 46 ) 212 212

r= = =
√ 6 ( 269 )−( 37 ) . √ 6 ( 516 ) −( 46 )
2 2
√245 √ 980 √240 , 100

r = 0.4326530612
There is a weak positive correlation.

References
Triola, Mario F. (1992). Elementary Statistics 5th ed. Addison-Wesley
Walpole, R. E. (1982). Introduction to statistics. New York: Macmillan.
 50

Lesson 9. Mathematics of Finance

Simple Interest

Suppose that an investor lends money to a debtor. Then the latter must pay back the
money originally borrowed, and also an additional sum called interest. From the
investor’s standpoint , interest is income from the invested capital. From the debtor’s
viewpoint, interest is money paid for the use of money. The amount of money borrowed
or invested is called the principal. The sum of the principal and the interest is called the
amount.

Formulas

I = Prt
A=P+I
A = P(1 + rt)

where
I = simple interest
P = principal
r = rate
t = time expressed in years
A = amount

If the time is given in months or days, convert this to year using the following
formulas:

t = number of months / 12

t = number of days / 360

t = number of days / 365

Note: Unless specified, 360 days is used in all simple interest computations.

1. If ₱3,000 was borrowed at 6% simple interest, how much will be the interest for 2 years?

Solution
 51

Given :
P = ₱ 3,000
r = 6 % = 0.06
t = 2 years
I=?

I = Prt = (3,000) (0.06) (2) = ₱ 360

2. Accumulate (Find A) ₱12,000 for 30 months at 8% simple interest.

Solution

Given:
P = ₱ 12,000
30
t= years=2. 5 years
12

r = 8% = 0.08
A=?

Solution

A = P(1 + rt) = 12,000 [1 + (0.08)(2.5)] = ₱ 14,400

3. If ₱ 400 is the interest at 10 % after 1 year, how much was borrowed?

Given:
I = ₱ 400
r = 0.1
t = 1 yr
P=?

I 400 400
P= = = =4000
rt 0 . 1(1) 0 . 1

P = ₱ 4,000

Exercises

1. Mr. Cruz borrowed ₱ 10,000 for 3 months and paid ₱ 237.50 interest. What was the annual
rate of interest?

Soln.

Given: P = ₱ 10,000
t = 3 mos. = 3/12 yr. = 0.25 yr
I = ₱ 237.50
r=?
 52

I 237 . 5
r= = =0 . 095=9 . 5 %
Pt 10 , 000(0 . 25)

2. Find the interest and amount on ₱ 25,000 at 10.5% for 60 days.

Given:

P = ₱ 25,000

r = 10.5% = 0.105

t = 60 days = 60/360 yr. = 1/6 yr.

I=?

A=?

I = Prt = 25,000(0.105)(1/6) = 437.5 = ₱ 437.50

A = P + I = ₱ 25,000 + ₱ 437.50 = ₱ 25,437.50

3. Discount(Find P) ₱ 16,000 for 45 days at 6 % simple interest.

P=?
A = ₱ 16,000
r = 6% = 0.06
t = 45/360 = 0.125 yr

A 16 , 000
P= = =15 , 880. 89
1+rt 1+(. 06 )(.125 )

P = ₱ 15,880.89

4. What principal will amount to ₱ 9,621.25 in 9 months if the interest rate is 10% ?

P=?

A 9 ,621 .25
P= = =8 ,950
1+rt 1+(0. 1)(0 . 75)
 53

P = ₱ 8,950

Compound Interest

From the previous topic, it has been discussed that one person has the right to use another
person’s money for a period of time and return the money with interest at the end of the period.
This is fine for short-term loans. For long-term obligations, interest computation is commonly
made on the basis of compound interest. In compound interest, if the interest is not paid but is
allowed to accumulate, at the end of the interest period, it is added to the principal and the
resulting amount becomes the new principal for the next interest period.

Interest is said to be compounded monthly, quarterly, semi-annually or annually when the

interest period is a month, three months, six months, or a year, respectively. The sum by which
the original principal has been increased by the end of the contract is called COMPOUND
INTEREST. The total accumulated amount at the end of the period, i. e., the original principal
plus the compound interest, is called the COMPOUND AMOUNT.

Example 1.

Find the compound amount of ₱10,000 compounded quarterly for a year at 12%. (Note
that 12% interest rate for a year, compounded quarterly, means 3% interest rate for each quarter,
12 %
=3 %
4 .)

12% -- nominal rate of interest per year

3% -- rate of interest per conversion period

Solution
₱10,000 = original principal
+ 300 = interest at the end of 3 months (10,000 x .03)
-----------
10,300 = new principal at the end of 3 months
+ 309 = interest at the end of 6 months (10,300 x 0.03)
-----------
10,609 = new principal at the end of 6 months
+ 318.27 = interest at the end of 9 months (10,609 x 0.03)
-------------
10,927.27 = new principal at the end of 9 months
+ 327.82 = interest at the end of 1 year (10,927.27 x 0.03)
--------------
₱11,255.09 = Final amount at the end of one year

Compound interest = ₱11,255.09 - ₱10,000 = ₱1,255.09

 54

Formulas

( )
mt
j
A=P 1+
m
n
A=P ( 1+i )

I = A– P

A
P=
( )
mt
j
1+
m

where

P → Original principal
A → Compound amount to which P will accumulate
I → compound interest
t → time or term of investment which is expressed in years
m → number of conversion periods per year
n → number of conversion periods for the whole term (n = mt)
j → nominal rate of interest per year
j
i=
i → rate of interest per conversion period ( m )

Let us solve example 1 using a formula.

Given: P = ₱ 10,000
m=4
t = 1 yr
n = mt =4(1) = 4
j = 12%
i = j/m = 12% / 4 = 0.12 / 4 = .03
A=?

n 4 4
A=P ( 1+i ) =10 , 000 ( 1+.03 ) =10 ,000 ( 1 .03 ) =11 ,255 .0881

A = ₱11,255.09
 55

Example 2
Accumulate ₱ 20,000 for 10 years at 6% compounded quarterly.

Solution
P = ₱ 20,000
t = 10 yrs
m=4
n = 4(10) = 40
j = 6%
i = 6% / 4 = 0.06/4 = 0.015
A=?
A = 20,000(1+0.015)40 = 20,000(1.015)40 = ₱36,280.37
Example 3

To what sum of money will ₱10,000 accumulate in 5 years and 3 months at 6%

compounded monthly?

Soln.
Given:
A =?
P = ₱10,000
t = 5yrs + 3 mos. = 5 yrs + 3/12 yr = 5.25 yrs
m = 12
n = mt = 12(5.25)= 63
j = 6%
i = j/m = 6% /12 = 0.06/12 = 0.005

n
A=P ( 1+i )

= 10,000 (1 + 0.005)63 = 10,000(1.005)63 = ₱13,691.84

I = 13,691.84 – 10,000 = ₱3,691.84

Exercises

1. What is the compound amount and interest if ₱15,000 is invested at 2% compounded

monthly for 2 years?

Soln.

Given: P = ₱15,000
 56

t = 2 yrs.
m = 12
n = (12)(2) = 24
j = 2%
i = j/m = 2% / 12 = 0.02 / 12 = 0.0016666... (nonterminating decimal)
i = 0.002/12 = 1/600

( )
n 24
A=P ( 1+i ) ¿ 15,000 1+ 1
600
= ₱15,611.64

I = A – P = ₱15,611.64 – ₱15,000 = ₱611.64

2. How much interest is earned in 3 years on ₱20,000 deposited in an account paying 6%

compounded semi-annually ?

3. How much money should you invest at an interest rate of 8% compounded semi-annually
to have ₱500,000 in 5 years?

4. How much money should you invest at an interest rate of 6% compounded monthly to
have ₱100,000 in 2 years?
 57

Credit Cards

When a customer uses a credit card to make a purchase, the customer is actually receiving a loan.
Therefore, there is frequently an added cost to the consumer who purchases on credit. This added
cost may be in the form of an annual fee or interest charges on purchases. A finance charge is an
amount paid in excess of the cash price; it is the cost to the customer for the use of credit. Most
credit card companies issue monthly bills. The due date on the bill is usually 1 month after the
billing date (the date the bill is prepared and sent to the customer). If the bill is paid in full by the
due date, the customer pays no finance charge. If the bill is not paid in full by the due date, a
finance charge is added to the next bill.
Suppose a credit card billing date is the 10th day of each month. If a credit card purchase is
made on April 15, then May 10 is the billing date (the 10th day of the month following April).
The due date is June 10 (one month from the billing date). If the bill is paid in full before June
10, no finance charge is added. However, if the bill is not paid in full, interest charges on the
outstanding balance will start to accrue (be added) on June 10, and any purchase made after
June 10 will immediately start accruing interest. The most common method of determining
finance charges is the average daily balance method. Interest charges are based on the credit
card’s average daily balance, which is calculated by dividing the sum of the total amounts owed
each day of the month by the number of days in the billing period.

sum of the total amounts owed each day of the month

Average daily balance = -------------------------------------------------------------------------
number of days in the billing period

An example of calculating the average daily balance follows. Suppose an unpaid bill for $315
had a due date of April 10. A purchase of $28 was made on April 12, and $123 was charged on
April 24. A payment of $50 was made on April 15. The next billing date is May 10. The interest
on the average daily balance is 1.5% per month. Find the finance charge on the May 10 bill.
Solution To find the finance charge, first prepare a table showing the unpaid balance for each
purchase, the number of days the balance is owed, and the product of these numbers. A negative
sign in the Payments or Purchases column of the table indicates that a payment was made on that
date.

Date Payments or Balance Number of days Unpaid balance

purchases each day until balance times number of
changes days
April 10-11 $315 2 $630
April 12-14 $28 $343 3 $1,029
April 15-23 - $50 $293 9 $2,637
April 24-May 9 $123 $416 16 $6,656
Total $10,952

The sum of the total amounts owed each day of the month is $10,952.
Find the average daily balance.

10 , 952
≈365 . 07
Average daily balance = 30

Find the finance charge.

 58

I = Prt = 365.07(0.015)(1)
I ¿ 5. 48
The finance charge on the May 10 bill is $5.48.

Stocks

When owners of a company want to raise money, generally to expand their business, they may
decide to sell part of the company to investors. An investor who purchases a part of the company
is said to own stock in the company. Stock is measured in shares; a share of stock in a company
is a certificate that indicates partial ownership in the company. The owners of the certificates are
called stockholders or shareholders. As owners, the stockholders share in the profits or losses of
the corporation. A company may distribute profits to its shareholders in the form of dividends. A
dividend is usually expressed as a per-share amount—for example, $0.07 per share.

Bonds

Aside from stocks, a corporation or company may also issue a bond to finance their
expansion programs. When a company issues a bond, it is borrowing money from the
bondholder. A bondholder is a person who lends money to a company.

Bonds are usually issued in units of ₱1000. The price paid for the bond is the face value. The
company promises to repay the bondholder on the maturity date at a given rate of interest called
the coupon.

Home Ownership

When you purchase a home, you generally make a down payment and finance the remainder of
the purchase price with a loan obtained through a bank or savings and loan association. The
amount of the down payment can vary, but it is normally between 10% and 30% of the selling
price. The mortgage is the amount that is borrowed to buy the real estate. The amount of the
mortgage is the difference between the selling price and the down payment.

Mortgage = selling price – down payment

 59

REFERENCES:

Aufmann et al. (2013). Mathematical Excursions 3rd ed. Belmont: Brooks/Cole, Cengage Learning

Aufmann et al. (2018). Mathematics in the Modern World Philippine ed. Manila: Rex Book Store, Inc.

Jamison, R.E. (2000). Learning the language of mathematics. Language and Learning
across the Disciplines, 4(1), 45-54

http://www.etereaestudios.com/docs html/nbyn htm/intro.htm

http://www.onemathematicalcat.org/pdf _files/LANG1.pdf

https://www.dpmms.cam.ac.uk/~wtg10/grammar.pdf