BUSINESS MATHEMATICS ASSIGNMENT

QUESTION-1:
Given:
1. Matrix s which summarize expected sales Region
1 2 3
500 200 350 1
S= 400 300 100 2
250 425 50 3 Products
100 150 350 4
200 175 225 5

2. Matrix R indicate no. of units used in production

Component
1 2 3 4
R= 1 0 2 0 1
1 1 1 0 2
2 1 0 3 3 Product
0 2 1 1 4
1 2 3 1 5

3. Matrix P indicate quantity of standard parts

Resources
F1 F2 F3 Prod. Labour Assem. Labour
P= 2 0 1 2 3 1
1 3 2 5 1 2 Components
0 2 1 4 2 3
0 4 1 1 6 4

4. Matrix C contains the Cost

P1 P2 P3 PL AL
C= 25 15 30 10 8 Cost

Solution:

A. Calculation for total exp. Demand

For this we will multiply S matrix with identity matrix i.e.,

D= 500 200 350

400 300 100 1
250 425 50 1
100 150 350 1
200 175 225

1050
D= 800
725
600
600

B. Calculate Quantity Needed

For this we will multiply D Matrix with R Matrix i.e.,
1 0 2 0
1 1 1 0
Q= 1050 800 725 600 600 2 1 0 3
0 2 1 1
1 2 3 1

Q= 3900 3925 5300 3375

C. Calculate Resource Requirement

For this we will multiply Q Matrix with P Matrix i.e.,
2 0 1 2 3
M= 3900 3925 5300 3375 1 3 2 5 1
0 2 1 4 2
0 4 1 1 6

M= 11725 35875 20425 52000 46475

D. Total Cost of Production

For this we will multiply M Matrix with C Matrix i.e.,

Total Cost= 11725

25 15 30 10 8 35875
20425
52000
46475
 Total Cost= 293125 538125 612750 520000 371800

Total Cost (Sum of all)= 2335800

QUESTION-2:
Given:

The Inter-Industry flow of the products,

Production Consumption Domestic
Sector Sector Demand
X Y Z
X 90 24 20 166
Y 60 96 20 64
Z 90 24 60 26

1.. Total No. of Output Total

X 90 24 20 166 300
Y 60 96 20 64 240
Z 90 24 60 26 200

TECHNOLOGY MATRIX,

A= 0.3 0.1 0.1

0.2 0.4 0.1
0.3 0.1 0.3

2..
Technology Coefficient a23 i.e. 20/200 in the technology matrix means that Sector Z is consuming 0.20
units of output of Sector Y as inputs for producing 200 units of output.

3..
If the technology Matrix Would have been 0.00 then it means that 2 sector has used its own output for
own consumption, rather it has distributed all its units of output to other sector and to domestic
demand.

4.. The first column of the table given above depicts how much units of output has been consumed by
sector X from itself from other sector Y and Z. a11= 0.30: Sector X uses 30% of its own.

5.. Sum of Second Row: The Second Row of the technology matrix describes how much sector Y demands
from Sector X and Z to produce one unit of output.
Sum of second row= 0.2+0.4+0.1= 0.7,
This means that 70% of
sector Y's output is dependent on intermediate output of X, Y and Z and 30% of production is derived
from extreme inputs.

6..
To Calculate: Hawkins-Simons Condition

Calculation: Identity matrix- A I-A

1 0 0 0.3 0.1 0.1

0 1 0 0.2 0.4 0.1
0 0 1 0.3 0.1 0.3

0.7 -0.1 -0.1

-0.2 0.6 -0.1
-0.3 -0.1 0.7

The Principal diagonal elements are positive and (I-A)^-1 also has non negative values thus
system is viable,

(I-A)^-1= 1/Det. A*adj A

Determinant of A= 0.25

Inverse of A= 1.64 0.32 0.28

0.68 1.84 0.36
 0.8 0.4 1.6

*Therefore, Determinant of A and inverse of A are positive,

7..

To Calculate : If the domestic Demand changes to 150, 200, 250 units, the calculate change in G output

Calculation: X= (I-A)^-1 x D

D Matrix= 150
200
250

X= 1.64 0.32 0.28 150

0.68 1.84 0.36 200
0.8 0.4 1.6 250

380 Sector X
X= 560 Sector Y
600 Sector Z

8..
Balancing Equation with new
To Calculate: figures

Calculation:

Balancing
Equation for
Sector X= a11.x1+a12.x2+a13.x3+d1=x1

0.30*380+0.10*560+0.10*600+150=380

Sector X= 380

Balancing
Equation for
Sector Y= a21.x1+a22.x2+a23.x3+d2=x2

0.20*380+0.40*560+0.10*600+200=560

Sector Y= 560

Balancing
equation for
Sector Z= a31.x1+a32.x2+a33.x3+d3=x3

0.30*380+0.10*560+0.30*600+250=600

Sector Z= 600

Balancing Equation should be:

0.3 0.1 0.1 380 150 380
0.2 0.4 0.1 560 200 560
0.3 0.1 0.3 600 250 600

9..
To Calculate: If the labour is the only primary input, what is the change in the total labour hours.

Calculations:
Labour Input Coefficients(C)
X= 1 0.3 0.2 0.3 0.2
Y= 1 0.1 0.4 0.1 0.4
Z= 1 0.1 0.1 0.3 0.5

1. C*D(initial)= 0.2 0.4 0.5 166

64
26
 Old Labour Hrs.= 71.8

2. C*D(new)= 0.2 0.4 0.5 150

200
250

New Labour hrs.= 235

Therefore, The change in Labour Hours is= 163.2 hrs.

10..
To Calculate: Transactional Matrix

Calculations: New Transactional Matrix,

X= 380 560 600

A*X= 0.3 0.1 0.1 380 0 0

0.2 0.4 0.1 0 560 0
0.3 0.1 0.3 0 0 600

Transactional Matrix= 114 56 60

76 224 60
114 56 180

11..
Calculations:
Total Labour hours= 0.2 New X= 380
0.4 560
0.5 600

Total Labour hours* New X= 0.2 0.4 0.5 380

560
600

New Gross Output Hours= 600 hrs.

Therefore, This is not Feasible.

12..
Calculations:
Labour Hours of each sector:
X= 0.2 * 380 Equal To 76 Hrs.
Y= 0.4 * 560 Equal To 224 Hrs.
Z= 0.5 * 600 Equal To 300 Hrs.

Wage Rate= ₹ 250.00

Value added of each sectors,

X= 76 * ₹ 250.00 Equal To ₹ 19,000.00
Y= 224 * ₹ 250.00 Equal To ₹ 56,000.00
Z= 300 * ₹ 250.00 Equal To ₹ 75,000.00

QUESTION-3:
Given:
Investment: $ 30,000.00
Bank deposits: x
Equity Shares: y
Unit Trust z

SOLUTION Equations
I. x+y+z=30000
II. 0.2x-y+0.2z=0
III. 3x+y-2z=0

MATRIX
A: X: B:
1 1 1 x 30000
0.2 -1 0.2 y 0
2 0 -3 z 0
 DETERMINANT 6
ADJOINT OF MATRIX A
3 3 1.2
1 -5 0
2 2 -1.2

Formula- X=1/determinant*adjt of A*B

Therefore the value invested are:
X= 15000 0 0 Bank Deposits(x): 15000
5000 0 0 Equity Shares(y): 5000
10000 0 0 Unit Trust(z): 10000
Question 4
Given
Loan 30000
n(in years) 6
i 0.06
instalments:
I ₹ 5,000.00 Present
II ₹ 15,000.00 -3
III ₹ 4,750.00 ?

SOLUTION

LHS 21148.8162131903
RHS 17594.2892454845

Equating LHS And RHS

3554.52696770576 4750*(1.06)^-n

0.748321466885424 (1.06)^-n

Taking log both side,

-0.125911796115787 n log 1.06 *log(1.06)= -0.0253058653

Equating both the sides,

n= 4.97559734861452 or approx. 5yrs

Question-5:
Given:
Effective Rate: 10.38%
Rate ?
No. of compounding 4

Solution Formula: [{Re+1)^n/m}-1]

Answer: 10%

Question-6:
Given:
Borrowings: ₹ 1,200,000.00
Rate 9%
n(yrs.) 9
n(At the end of 4th yr.) 3

Solution

LHS ₹ 1,200,000.00
RHS 3.46395222827515 *R

R= ₹ 346,425.10

Question-7:
Given:
Amount at the end of 2nd yr.: ₹ 4,686.64
Amount at the end of 4th yr.: ₹ 5,491.14
Money Deposited ?
Interest rate ?
Compounding in a year 4

Solution:

PART-1(Finding Interest Rate)

Equation-1 P(1+i/4)^16 5491.14
Equation-2 P(1+i/4)^8 4686.64

Dividing the equations 1 and 2 (1+i/4)^8 1.1716581602171

Taking log both the sides,

8log(1+i/4) 0.0688009215914

log(1+i/4) 0.0086001151989
 Taking Antilog, (1+i/4) 1.0199998671541

(i/4) 0.0199998671541

I= 0.0799994686163 or 8%

PART-2(Finding Principle amt.)

Putting the value of Interest in Eq.1 P(1+0.08/4)^8 ₹ 4,686.64

P(1.1716) ₹ 4,686.64

P= ₹ 4,000.20

Question-8:
Given:
Sums- Due at the end of(yrs.)-
₹ 20,000.00 2
₹ 30,000.00 4
₹ 40,000.00 8
Single sum of- ₹ 90,000.00
Effective Rate 10%
No. of years ?

Solution:
LHS RHS

90000/(1.10)^n 20000/(1.10)^2 30000/(1.10)^4 40000/(1.10)^8

90000/(1.10)^n 16528.9256198347 20490.403660952 18660.2952084

Adding RHS
90000/(1.10)^n 55679.6244891761

Equating them,
1.61639021142277 (1.10)^n

Taking log both sides,

0.208546211766931 nlog(1.10) *log (1.10) = 0.04139268516
5.03823830152007 n

So, N= 5.03823830152007 or approximately 5yrs

QUESTION-9:
Given:
10 annual payment each of: ₹ 100,000.00
Received At: The End of each year
Option 1: Lump sum amount of: ₹ 600,000.00
Money Worth compounded annually(i): 10%
Present Value ?

Solution:

Formula PV=(R(1-(1+i)^-n)/i
* (1.10)^-10 = 0.38554328943
Putting Values in the formula, PV=R(1-(1+0.10)^-10)/0.10

PV= ₹ 614,456.71
Therefore, Option 1 is higher than Option 2, So that is more preferable.

Question-10:
Given:
Loan: ₹ 10,000.00
n(yrs.): 20
Effective Rate of interest(i): 3%
Find-
1. Annual instalments ?
2. Capital Contained in 8th instalment ?
3. Principal repaid after 12 instalments ?

Solution:

1. Annual Instalments
Formula= R=P(i/1-(1+i)^-n

Putting the Values, R=10000(0.03/(1-(1+0.03)^-20) *(1.03)^-20= 0.5536757541863

R= ₹ 672.16

2. Capital Contained in 8th Instalment

Formula= P=R(1-(1+i)^-n)/i
 Putting the Values, P=672.157076(1-(1+0.03)^-13/0.03 *(1.03)^-13= 0.6809513399932

P= ₹ 7,148.36

3. Principal paid after 12 instalments

Total annual
Year Beginning balance Annual interest Instal. Principal Paid Ending Balance
1 ₹ 10,000.00 ₹ 300.00 ₹ 672.16 ₹ 372.16 ₹ 9,627.84
2 ₹ 9,627.84 ₹ 288.84 ₹ 672.16 ₹ 383.32 ₹ 9,244.52
3 ₹ 9,244.52 ₹ 277.34 ₹ 672.16 ₹ 394.82 ₹ 8,849.69
4 ₹ 8,849.69 ₹ 265.49 ₹ 672.16 ₹ 406.67 ₹ 8,443.02
5 ₹ 8,443.02 ₹ 253.29 ₹ 672.16 ₹ 418.87 ₹ 8,024.15
6 ₹ 8,024.15 ₹ 240.72 ₹ 672.16 ₹ 431.44 ₹ 7,592.72
7 ₹ 7,592.72 ₹ 227.78 ₹ 672.16 ₹ 444.38 ₹ 7,148.34
8 ₹ 7,148.34 ₹ 214.45 ₹ 672.16 ₹ 457.71 ₹ 6,690.63
9 ₹ 6,690.63 ₹ 200.72 ₹ 672.16 ₹ 471.44 ₹ 6,219.19
10 ₹ 6,219.19 ₹ 186.58 ₹ 672.16 ₹ 485.58 ₹ 5,733.60
11 ₹ 5,733.60 ₹ 172.01 ₹ 672.16 ₹ 500.15 ₹ 5,233.45
12 ₹ 5,233.45 ₹ 157.00 ₹ 672.16 ₹ 515.16 ₹ 4,718.29
₹ 5,281.71

The principal repaid after 12 instalments have been paid = ₹ 5,281.71