Business Mathematics and Statistics

BUSINESS
MATHEMATICS AND STATISTICS




DIPLOMA IN CREDIT MANAGEMENT (DCM)
ACCOUNTING TECHNICIAN DIPLOMA (ATD)




LEVEL II




STUDY TEXT




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,KASNEB SYLLABUS

GENERAL OBJECTIVE

This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her
to apply mathematical and statistical skills in business transactions.

7.0 LEARNING OUTCOMES

A candidate who passes this paper should be able to:

 Apply linear, quadratic and simultaneous equations to solve business problems
 Compute simple and compound interests
 Solve problems involving appreciation, depreciation, hire purchase and foreign exchange
 Solve business problems using matrix algebra
 Solve business problems involving commercial mathematics
 Present data in form of tables, graphs and curves
 Calculate measures of location, dispersion skewness and kurtosis
 Compute simple, general and weighted index numbers.



CONTENT

7.1Equations

 Linear equations; solving and graphs
 Quadratic equations: solving and graphs
 Differentiation
 Simultaneous equations; solving
 Break-even analysis
 Total revenue, total cost and profit equations; application of errors

7.2 Matrices

 Introduction; order, types
 Addition, subtraction and multiplication
 Determinants of 2x2 matrices
 Inverses of 2x2 matrices
 Application of matrices to business problems

7.3 Commercial mathematics

 Buying and selling; discounts, profit and loss, margins and mark-ups
 Commissions and salaries: piece and hourly rates, gross and net pay, PAYE
 Bills calculations; water and electricity /
 Simple and compound interest
 Depreciation and appreciation of assets

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,  Hire purchase
 Foreign exchange

7.4 Elementary statistics

 Introduction: definitions and branches of statistics^
 Methods of data collection: primary and secondary data./
 Sampling techniques J
 Presentation of data:
 Tables
 Diagrams: bar charts and pie charts
 Graphs: Basic time series graphs, Z-charts, Lorenz curves and semi-log graphs
 Frequency distribution tables
 Histogram and frequency polygons'
 Cumulative frequency curve (ogive) and its application

7.5 Descriptive statistics

 Measures of central tendency:
 Mean: arithmetic mean, weighted arithmetic mean, geometric mean and harmonic mean
 Mode
 Median
 Measures of dispersion: range, quartile, deciles, percentiles, mean deviation, standard deviation
and coefficient of variation
 Measures of skewness and kurtosis excluding computation of the coefficients

7.6 Set theory

 Introduction to set theory
 Types of sets: universal, empty/null. Sublets, finite and infinite
 Operation of sets: unions, intersecting, complements and set difference
 Venn diagrams

7.7 Basic probability theory

 Introduction to probability: definitions, events, outcomes, sample space
 Types of events: simple, compound, independent, mutually exclusive,
 Mutually inclusive, dependent events
 Rules of probability: additive and multiplicative rules
 Baye’s Theorem
 Elementary probability trees

7.8 Index numbers

 Construction of index numbers Purpose of index numbers
 Simple index numbers; fixed base method and chain base method
 Consumer Price Index (CPI)

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,  Weighted index numbers; Laspeyre’s, Paasche's, Fisher’s ideal and Marshall- Edgeworth’s
methods (both price and quantity index numbers)
 Limitations of index numbers
 Emerging issues and trends

7.9 Emerging trends




CONTENT PAGE

Chapter 1: Equations………………………………………………………………………5
Chapter 2: Matrices………………………………………………………………….…...31
Chapter 3: Commercial mathematics…………………………………………………….52
Chapter 4: Elementary statistics……………………………………………………….....77
Chapter 5: Descriptive statistics…………………………………………………….…...109
Chapter 6: Set theory…………………………………………………………….………146
Chapter 7: Basic probability theory……………………………………………..……….176
Chapter 8: Index numbers …………………………………………………………….....205




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