The Association of Business Executives

QCF

Introduction to Quantitative
Methods
1 December 2011, Morning
1. Time allowed: 3 hours.
4IQM1211
Read the instructions at the top of each section carefully.
2. 
The number of questions you have to answer is marked clearly at the top of each section.
Do not answer more questions than instructed.
3. The number of marks per question may vary. Marks for subdivisions of questions and the
total marks for each question are shown in brackets after the question.
No books, dictionaries, notes or any other written materials are allowed in this
4. 
examination.
Calculators, including scientific calculators, are allowed providing they are not
5. 
programmable and cannot store or recall information. Electronic dictionaries and
personal organisers are NOT allowed. All workings must be shown.
6. Formulae and a table of standard normal distribution are printed on pages 6 to 9 for the
assistance of candidates. Their use is not compulsory. Graph paper is provided at the front
of the answer booklet. Note: £1 = 100p.
7. Candidates who break ABE Examination Regulations (Conduct during the Examinations), or
commit any misconduct, will be disqualified from the examinations.
8. Question papers must not be removed from the Examination Hall.

STRUCTURE OF PAPER: Answer BOTH sections

SECTION A: Answer ALL EIGHT questions Q1 10 marks

Q2 10 marks
Q3 10 marks
Q4 10 marks
Q5 12 marks
Q6 12 marks
Q7 12 marks
Q8 12 marks
SECTION B: Answer ONE question Either Q9 or Q10 12 marks

TOTAL MARKS AVAILABLE FOR THE PAPER 100 marks

053556

4IQM1211 © ABE 2011 D/600/0603

This paper consists of TWO SECTIONS.
Follow the instructions at the top of EACH section.

SECTION A
Candidates must answer ALL EIGHT questions in this section.
Questions do not carry equal marks. The mark allocation is shown after each question.
Section A is worth 88% of the total marks available for the paper.

Q1 (a) 
Without the use of a calculator, find the value of the following, showing all steps in
your calculations:
7 1 4
(i) +3  (3 marks)
8 2 16

2
 1 16
(ii)   × (3 marks)
2 4

(b) Use a calculator to find the value, correct to 2 decimal places, of:

(i) 5–2 (2 marks)

(ii) e5.04 (2 marks)

(Total 10 marks)

Q2 (a) Express two million in standard form A  10n, where 1 ≤ A <10 and n is an integer
(2 marks)

(b) Express:

(i) 0.75318 as a percentage correct to 2 decimal places (2 marks)

67
(ii) as a percentage correct to 1 decimal place (2 marks)
89
(iii) 7,528,390 correct to 3 significant figures (2 marks)

(iv) 25% as a fraction in its simplest form (2 marks)

(Total 10 marks)

Q3 (a) If a businesswoman invested £100,000 in a bank that paid 3% simple interest per
annum, calculate how much her investment would be worth after 8 years. (5 marks)

(b) Calculate the annual rate of compound interest that would be necessary for £100,000
to grow to £135,000 by the end of 8 years. (Give your answer correct to 1 decimal
place.) (5 marks)
(Total 10 marks)

4IQM1211 2
Q4  he demand curve of a retail food product can be represented by the equation
T
P = 42 – 0.25Q, where P is the price of the product (£) and Q is the quantity demanded
(units).

(a) From the equation, determine the co-ordinates at which the demand curve would
intercept the y-axis. (2 marks)

(b) From the equation, determine the gradient of this product’s demand curve. (2 marks)

(c) Using the equation, calculate the price charged if the quantity demanded was 38 units.
(3 marks)

(d) Using the equation, calculate the quantity demanded if the price was £5.50 per unit.
(3 marks)
(Total 10 marks)

Q5 (a) Solve 11x – 4 = 16 + x (4 marks)

(b) Solve x2 + 4x – 12 = 0, using factorisation (4 marks)

(c) Solve x2 + 6x – 16 = 0, using the quadratic formula (4 marks)

(Total 12 marks)

Q6 The following table contains data on the monthly sales revenue of a food retailer against its
expenditure on advertising activities over a 12 month period.

Advertising Expenditure (£000) Sales Revenue (£000)

2.3 123.4
2.5 134.6
2.8 150.4
3.1 179.1
3.3 191.8
3.6 200.4
4.3 203.6
4.9 210.3
1.2 62.2
1.9 106.8
1.7 91.1
1.5 89.3

(a) Using the data, draw a fully labelled scatter diagram of sales revenue against
advertising expenditure. Use the graph paper provided at the front of your answer book.
 (9 marks)

(b) Use your scatter diagram to comment on the possible relationship between advertising
expenditure and sales revenue. (3 marks)
(Total 12 marks)
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Q7 The following data shows the annual salaries (£’000) of 10 employees working for the same
company.

16 18 20 58 22 24 20 32 20 10

(a) Using the annual salary data, calculate the following:

(i) mode
(ii) median
(iii) mean
(iv) range (8 marks)

(b) Based on the measures of location and dispersion calculated in (a), comment on the
distribution of the annual salaries of the 10 employees. (4 marks)
(Total 12 marks)

Q8 (a) Explain the difference between qualitative and quantitative data, giving an example of
each. (6 marks)

(b) Classify each of the following data as either continuous or discrete:

(i) The number of orange trees in an orchard

(ii) The height of the orange trees
(iii) The number of oranges produced on each tree
(iv) The number of labourers required to pick the oranges within one day
(v) The time it takes to pick the oranges from a tree
(vi) The volume of oranges picked by weight (6 marks)
(Total 12 marks)

END OF SECTION A
MAXIMUM MARKS FOR SECTION A: 88

4IQM1211 4
 SECTION B
You must answer ONE question in this section. DO NOT answer BOTH Q9 and Q10.
Each question carries 12 marks.
Section B is worth 12% of the total marks available for the paper.

EITHER:
Q9 A business studies class has 20 students, 8 of whom are female. Of these 8 female
students, 6 have previously studied a quantitative methods course. Only 4 of the entire
class of 20 students have not previously studied a quantitative methods course.

(a) Given this information, construct a two-way contingency table showing male and
female students and those that have and have not studied a quantitative methods
course previously. (4 marks)

(b) Using the contingency table constructed in (a) or otherwise, calculate the probability
that a student picked at random is:

(i) male
(ii) male and has previously studied a quantitative methods course
(iii) male or has previously studied a quantitative methods course (8 marks)
(Total 12 marks)

OR:
Q10 The weight of a jar of coffee is found to be normally distributed with a mean of 500 grams
and a standard deviation of 10 grams.

(a) Find the probability that a randomly selected jar of coffee weighs:

(i) less than 498 grams

(ii) between 498 grams and 510 grams (8 marks)

(b) If 200 jars of coffee were selected at random, calculate how many would weigh less
than 498 grams. (Give your answer to the nearest whole number.) (4 marks)
(Total 12 marks)

END OF SECTION B
MAXIMUM MARKS FOR SECTION B: 12

TOTAL MAXIMUM MARKS: 100

END OF QUESTION PAPER

4IQM1211 5 [Turn over

 INTRODUCTION TO QUANTITATIVE METHODS

FORMULAE FOR BUSINESS MATHEMATICS AND STATISTICS

INTEREST
The formula for calculating compound interest:
n
 r 
A = P 1 +
 100 
where: A = Accrued amount
P = Original principal
r = Rate of interest (for a particular time period, usually annual)
n = Number of time periods.

DEPRECIATION
� Straight-line method:
Cost of asset
Annual depreciation = ––––––––––––
Useful life

(Cost of asset) – (Value at end of useful life)

or Annual depreciation = ––––––––––––––––––––––––––––––––––––
Useful life

� Reducing balance method:

D = B (1 – i) n

where: D = Depreciated value at the end of the n th time period

B = Original value at beginning of time period
i = Depreciation rate (as a proportion)
n = Number of time periods (normally years)

STRAIGHT LINE

A linear function is one for which, when the relationship is plotted on a graph, a straight line is
obtained.

The expression of a linear function, and hence the formula of a straight line, takes the following
form:
y = mx + c

Note that: c = the y intercept (the point where the line crosses the y axis)
m = the gradient (or slope) of the line

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QUADRATIC EQUATION

A quadratic equation of the form ax 2 + bx + c = 0 can be solved using the following formula:

– b ± b 2 – 4ac
x=
2a

RULES FOR LOGARITHMS

1. log(p × q) = log p + log q

 p
2. log   = log p – log q
q
3. log pn = n log p
4. If y = axn then n = (log y – log a) ÷ log x

PROBABILITY

� Probability rules:
Probability limits: 0 ≤ P(A) ≤ 1
Total probability rule: ΣP = 1 (for all outcomes)
–
For complementary events: P(A) + P(A ) = 1
For two mutually exclusive events: P(A and B) = 0
For independent events: P(A) = P(A |B) and/or P(B) = P(B |A)
� Multiplication rules:
For independent events: P(A and B) = P(A) × P(B)
For dependent events: P(A and B) = P(A) × P(B|A)
� Additional rules:
For mutually exclusive events: P(A or B) = P(A) + P(B)
For non-mutually exclusive events: P(A or B) = P(A) + P(B) – P(A and B)
� Conditional rules:
P(A and B) P(A and B)
P(A|B) = –––––––––– and P(B |A) = –––––––––
P(B) P(A)

Expected value of variables x with associated probabilities P(x) is E(x) = ΣxP(x)

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STATISTICAL MEASURES

● Mean for ungrouped data:

∑x
x=
n

● Mean for grouped data:

∑fx ∑f x
x= or x=
n ∑f

● Standard deviation for ungrouped data:

∑(x − x ) 2 ∑x 2 ∑x 2  ∑x 2
σ= = −x2 = −
n n n  n 
● Standard deviation for grouped data:

σ=
∑f ( x − x )
2
=
1 2 ( ∑fx ) 
2

 ∑fx − 
∑f n n 

where: n = ∑f

● Pearson’s measure of skewness:

Mean – Mode 3(Mean – Median)
Psk = or
Standard deviation Standard deviation

● Coefficient of variation:

Standard deviation 100

×
Mean 1

4IQM1211 8
STANDARD NORMAL DISTRIBUTION

The table of values of the standard normal distribution set out below provides a means of
determining the probability of an observation (x ) lying within specified standard deviations (σ) of
the mean of the distribution (µ ).

µ x

AREAS IN TAIL OF THE STANDARD NORMAL DISTRIBUTION

(x – µ)
–––––- .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
σ

0.0 .5000 .4960 .4920 .4880 .4840 .4801 .4761 .4721 .4681 .4641
0.1 .4602 .4562 .4522 .4483 .4443 .4404 .4364 .4325 .4286 .4247
0.2 .4207 .4168 .4129 .4090 .4052 .4013 .3874 .3936 .3897 .3859
0.3 .3821 .3783 .3745 .3707 .3669 .3632 .3594 .3557 .3520 .3483
0.4 .3446 .3409 .3372 .3336 .3300 .3264 .3228 .3192 .3156 .3121

0.5 .3085 .3050 .3015 .2981 .2946 .2912 .2877 .2843 .2810 .2776
0.6 .2743 .2709 .2676 .2643 .2611 .2578 .2546 .2514 .2483 .2451
0.7 .2420 .2389 .2358 .2327 .2296 .2266 .2236 .2206 .2177 .2148
0.8 .2119 .2090 .2061 .2033 .2005 .1977 .1949 .1922 .1894 .1867
0.9 .1841 .1814 .1788 .1762 .1736 .1711 .1685 .1660 .1635 .1611

1.0 .1587 .1562 .1539 .1515 .1492 .1469 .1446 .1423 .1401 .1379
1.1 .1357 .1335 .1314 .1292 .1271 .1251 .1230 .1210 .1190 .1170
1.2 .1151 .1131 .1112 .1093 .1075 .1056 .1038 .1020 .1003 .0985
1.3 .0968 .0951 .0934 .0918 .0901 .0885 .0869 .0853 .0838 .0823
1.4 .0808 .0793 .0778 .0764 .0749 .0735 .0721 .0708 .0694 .0681

1.5 .0668 .0655 .0643 .0630 .0618 .0606 .0594 .0582 .0571 .0559
1.6 .0548 .0537 .0526 .0516 .0505 .0495 .0485 .0475 .0465 .0455
1.7 .0446 .0436 .0427 .0418 .0409 .0401 .0392 .0384 .0375 .0367
1.8 .0359 .0351 .0344 .0336 .0329 .0322 .0314 .0307 .0301 .0294
1.9 .0287 .0281 .0274 .0268 .0262 .0256 .0250 .0244 .0239 .0233

2.0 .02275 .02222 .02169 .02118 .02068 .02018 .01970 .01923 .01876 .01831
2.1 .01786 .01743 .01700 .01659 .01618 .01578 .01539 .01500 .01463 .01426
2.2 .01390 .01355 .01321 .01287 .01255 .01222 .01191 .01160 .01130 .01101
2.3 .01072 .01044 .01017 .00990 .00964 .00939 .00914 .00889 .00866 .00842
2.4 .00820 .00798 .00776 .00755 .00734 .00714 .00695 .00676 .00657 .00639

2.5 .00621 .00604 .00587 .00570 .00554 .00539 .00523 .00508 .00494 .00480
2.6 .00466 .00453 .00440 .00427 .00415 .00402 .00391 .00379 .00368 .00357
2.7 .00347 .00336 .00326 .00317 .00307 .00298 .00289 .00280 .00272 .00264
2.8 .00256 .00248 .00240 .00233 .00226 .00219 .00212 .00205 .00199 .00193
2.9 .00187 .00181 .00175 .00169 .00164 .00159 .00154 .00149 .00144 .00139

3.0 .00135

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