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524.financial Mathematics

This document contains instructions for an assignment with 5 questions. It provides the details of the assignment such as the due date and submission requirements. The questions cover a range of mathematical and economic topics, including systems of equations, elasticity, profit maximization, and input-output matrices. Students are asked to show calculations, solve problems, and provide interpretations of results.

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15 views

524.financial Mathematics

This document contains instructions for an assignment with 5 questions. It provides the details of the assignment such as the due date and submission requirements. The questions cover a range of mathematical and economic topics, including systems of equations, elasticity, profit maximization, and input-output matrices. Students are asked to show calculations, solve problems, and provide interpretations of results.

Uploaded by

joseph.kabaso96
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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INFORMATION AND COMMUNICATIONS UNIVERSITY

SCHOOL OF HUMANITIES AND BUSINESS MANAGEMENT


ECONOMICS & BUSINESS DEPARTMENT

FINANCIAL MATHEMATICS I |MATHEMATICS FOR SOCIAL SCIENCES I

TUTOR: MR. B. CHANSA EMAIL: [email protected]


ASSIGNMENT
INSTRUCTIONS
a) Answer all the questions.
b) Any Assignment submitted after due date will not be considered for Continuous Assessment.
c) Your assignment should be scanned and uploaded on AIMS as one document in pdf format.
d) Due Date: Friday5 April 2019

QUESTION 1 [25 Marks]

a) Of the cars sold during the month of July, 90 had air conditioning, 100 had automatic
transmissions, and 75 had power steering. Five cars had all three of these extras. Twenty cars
had none of these extras. Twenty cars had only air conditioning, 60 cars had only automatic
transmissions, and 30 cars had only power steering. Ten cars had both automatic
transmission and power steering,
i. How many cars had both power steering and air conditioning? [1]
ii. How many cars had both automatic transmission and air conditioning? [1]
iii. How many cars had neither power steering nor automatic transmission? [1]
iv. How many cars were sold in July? [1]
v. How many had automatic transmission or air conditioning or both? [1]

b) The Chisha Company produces a product for which the variable cost per unit is K6 and fixed
cost is K80 000. Each unit has a selling price of K10. Determine the number of units that
must be sold for the company to earn a profit of K60 000. [4]
c) Perform the indicated operations and simplify the following:
x 
2
2 3  x3 
i.  2 
[2]
x4  
 x 3 
1
ii. Rationalize the denominator of [2]
x 5

“The whole purpose of education is to turn mirrors into windows.”


2
d) The demand law for a certain commodity is p  x  40 and the supply law for a certain
5
commodity is 3 p  4 x  30 where p is the price and x is the quantity of the good.
i. Find the equilibrium price and quantity. [3]
ii. Find the equilibrium price and quantity after a tax of 6 per unit is imposed. [4]
iii. Find the contribution in tax paid by the consumer and supplier. [2]
iv. Show the equilibrium in both (i) and (ii) graphically. [3]

QUESTION 2 [25 Marks]


a) The Profit function of Mbozi Ltd. is of the form π = aQ2 + bQ + c if it is known that π = 31,
34, and 27 when Q = 1, 2, and 3 respectively, write down a set of three unknowns, a, b, and
c. Solve this system to find a, b, and c. hence find the profit when Q = 5. [6]
b) For the given function f and g , find the indicated function values

5 2
f ( x)  g ( x) 
x3 x2

i.  f  g 7.5 [3]
ii.  f  g  4.15 [3]
c) Determine the equilibrium income and interest rate given the following information about the
commodity market.
C  0.8Y  185
I  30r  1200
and the money market
M S  1500
L1  0.3Y
L2  35r  2300
M d = L1 + L2
What effect would a decrease in the money supply have on the equilibrium levels of Y and r ?
[6]
d) Solve the following non-linear system of equations

p 2  q  0,
3q  2 p  1  0. [4]
3x  8
e) Solve the given inequality and show the solution on a real number line 4 [3]
3

“The whole purpose of education is to turn mirrors into windows.”


QUESTION 3 [25 Marks]
a) Given the demand function for computers to be P = 2400 – 0.4Q
i. Determine the coefficient of point elasticity of demand when P = 1800, P = 1200, and P =
600 and give an interpretation of each result. [7]
ii. If the price of computers increases by 12%, calculate the percentage change in quantity
demanded at P = 1800, P = 1200, and P = 600. [9]
b) The demand and supply functions for three interdependent commodities are
Qd 1  15  P1  2 P2  P3
Qd 2  9  P1  P2  P3
Qd 3  8  2 P1  P2  4 P3
Qs1  7  P1
Qs 2  4  4 P1
Qs 3  5  2 P3
Calculate the value of equilibriums prices P1, P2 and P3 using Cramer’s Rule. [9]

QUESTION 4 [25 Marks]

a) For a given set of constants α, β, and γ the functions

are homogeneous of degree 2 and 1 respectively. Determine the values for α, β, and γ. [6]
b) Solve the following given non-linear equations and inequalities.
i. 25x2  53x4 [2]
5 y  1 7 y  1
ii.  [2]
3 2
iii. 3 x4  x4 [3]
iv. log4 2 x  4  3  log4 3 [3]
c) A company can use types of machine A and B, in a manufacturing plant. The number of
operators required and the running cost per day are given as
Cost per day Available Floor area m 2  Profit per
operators machine
Machine A 6 2 2 20
Machine B 3 4 2 30
Maximum 360 280 160
available

“The whole purpose of education is to turn mirrors into windows.”


(a) Write down the inequality constraint and profit function. [3]
(b) Graph the inequalities. Determine the number of machines A and B which should
be used to maximize profits. [6]

QUESTION 5 [25 Marks]


a) A fast food chain has three shops, A, B and C. The average daily sales and profit in each
shop is given in the following table:

Units Sold Units Profit


Shop A Shop B Shop C Shop A Shop B Shop C
900 600 700 1500 2500 3000
Burgers
Chips 2000 800 900 3500 2500 4000
Drinks 700 1400 2000 2500 3500 2500

Use matrix multiplication to determine

i.The profit for each product; [4]


ii.The profit for each shop. [4]
b) Given the input-output matrix below
Industry Final
Demand
A B C
Industry A 100 400 240 260
B 100 80 480 140
C 300 160 240 500
Other 500 160 240

a) Find the output matrix if final demand changes to 300 for A, 200 for B, and 400 for
C. [17]

~End of Assignment~
“a bird in your hands is worth 2 in the bush”

“The whole purpose of education is to turn mirrors into windows.”

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