Sekhonappliedfinitemathematics Small
Sekhonappliedfinitemathematics Small
Sekhonappliedfinitemathematics Small
Second Edition
Rupinder Sekhon
De Anza College
Cupertino, California
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Author: Rupinder Sekhon
Rupinder Sekhon has been teaching Mathematics at De Anza College since 1985. He earned his
B.S. degree from University of San Francisco and his M.S. degree from San Francisco State
University. He loves teaching mathematics and has been doing it since 1967.
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No part of this book may be reproduced or transmitted in any form by any means, electronic or
mechanical, including photocopying and recording or by an information storage or retrieval
system without the prior written permission of the author.
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This pdf file has been created from files of the textbook on the author’s website, with permission
of the author for use as a course textbook by De Anza College students and faculty.
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CHAPTER 1
Linear Equations
In this chapter, you will learn to:
1. Graph a linear equation.
2. Find the slope of a line.
3. Determine an equation of a line.
4. Solve linear systems.
5. Do application problems using linear equations.
x -1 0 1
y –1 2 5
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2 Chapter 1: Linear Equations
x -1 0 1
y 6 4 2
The points at which a line crosses the coordinate axes are called the intercepts. When
graphing a line, intercepts are preferred because they are easy to find. In order to find the x-
intercept, we let y = 0, and to find the y-intercept, we let x = 0.
Solution: To find the x-intercept, we let y = 0 in our equation, and solve for x.
2x - 3(0) = 6
2x - 0 = 6
2x = 6
x=3
Page 6
Chapter 1: Linear Equations 3
Note: If the x-intercept is 3, and the y-intercept is –2, then the corresponding points are (3, 0)
and (0, –2), respectively.
In higher math, equations of lines are sometimes written in parametric form. For example,
x = 3 + 2t, y = 1 + t. The letter t is called the parameter or the dummy variable. Parametric
lines can be graphed by finding values for x and y by substituting numerical values for t.
Solution: Let t = 0, 1 and 2, and then for each value of t find the corresponding values for x and y.
The results are given in the table below.
t 0 1 2
x 3 5 7
y 1 2 3
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4 Chapter 1: Linear Equations
Solution: The graph of the line x = –2 is a vertical line that has the x-coordinate –2 no matter what the
y-coordinate is. Therefore, the graph is a vertical line passing through (–2, 0).
The graph of the line y = 3, is a horizontal line that has the y-coordinate 3 regardless of what
the x-coordinate is. Therefore, the graph is a horizontal line that passes through (0, 3).
Page 8
Chapter 1: Linear Equations 5
Note: Most students feel that the coordinates of points must always be integers. This is not
true, and in real life situations, not always possible. Do not be intimidated if your points include
numbers that are fractions or decimals.
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Page 10
Name:_________________________________ Chapter 1 Problem Sets
1) Is the point (2, 3) on the line 5x – 2y = 4? 2) Is the point (1, – 2) on the line 6x – y = 4?
3) For the line 3x - y = 12, complete the following 4) For the line 4x + 3y = 24, complete the following
ordered pairs. ordered pairs.
(2, ) ( , 6) (3, ) ( , 4)
(0, ) ( , 0) (0, ) ( , 0)
5) Graph y = 2x + 3 6) Graph y = – 3x + 5
7) Graph y = 4x – 3 8) Graph x – 2y = 8
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Chapter 1 Problem Sets Name:_________________________________
13) Graph the following three equations on the same set 14) Graph the following three equations on the same set
of coordinate axes. of coordinate axes.
y = x +1 y = 2x + 1 y = -x + 1 y = 2x +1 y = 2x y = 2x - 1
15) Graph the line using the parametric equations 16) Graph the line using the parametric equations
x = 1 + 2t, y = 3 + t x = 2 – 3t, y = 1 + 2t
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6 Chapter 1: Linear Equations
In the last section, we learned to graph a line by choosing two points on the line. A graph of
a line can also be determined if one point and the "steepness" of the line is known. The
precise number that refers to the steepness or inclination of a line is called the slope of the
line.
From previous math courses, many of you remember slope as the "rise over run," or "the
vertical change over the horizontal change" and have often seen it expressed as:
Page 13
Chapter 1: Linear Equations 7
y2 – y1
Slope = m = x – x
2 1
Example 1 Find the slope of the line that passes through the points (-2, 3) and (4, -1), and graph the line.
Solution: Let (x1, y1) = (-2, 3) and (x2, y2) = (4, -1) then the slope
–1 – 3 4 2
m = 4 –(-2) = – 6 = – 3
To give the reader a better understanding, both the vertical change, –4, and the horizontal
change, 6, are shown in the above figure.
When two points are given, it does not matter which point is denoted as (x1, y1) and which
(x2, y2). The value for the slope will be the same. For example, if we choose (x1, y1) = (4, -
1) and (x2, y2) = (-2, 3), we will get the same value for the slope as we obtained earlier. The
steps involved are as follows.
3 – (-1) 4 2
m = –2 – 4 = –6 = – 3
The student should further observe that if a line rises when going from left to right, then it has
a positive slope; and if it falls going from left to right, it has a negative slope.
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8 Chapter 1: Linear Equations
Example 2 Find the slope of the line that passes through the points (2, 3) and (2, -1), and graph.
Solution: Let (x1, y1) = (2, 3) and (x2, y2) = (2, -1) then the slope
–1 – 3 4
m = 2–2 = –0 = undefined.
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Chapter 1: Linear Equations 9
3
Example 3 Graph the line that passes through the point (1, 2) and has slope – 4 .
rise –3
Solution: Slope equals run . The fact that the slope is 4 , means that for every rise of –3 units (fall
of 3 units) there is a run of 4. So if from the given point (1, 2) we go down 3 units and go
right 4 units, we reach the point (5, –1). The following graph is obtained by connecting these
two points.
3
Alternatively, since – 4 represents the same number, the line can be drawn by starting at the
point (1,2) and choosing a rise of 3 units followed by a run of –4 units. So from the point
(1, 2), we go up 3 units, and to the left 4, thus reaching the point (–3, 5) which is also on the
same line. See figure below.
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10 Chapter 1: Linear Equations
Solution: In order to find the slope of this line, we will choose any two points on this line.
Again, the selection of x and y intercepts seems to be a good choice. The x-intercept is (3, 0),
and the y-intercept is (0, 2). Therefore, the slope is
2–0 2
m = 0–3 = –3 .
The graph below shows the line and the intercepts:x and y.
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Chapter 1: Linear Equations 11
Solution: We again find two points on the line. Say (0, 2) and (1, 5).
5–2 3
Therefore, the slope is m = 1 – 0 = 1 = 3.
Look at the slopes and the y-intercepts of the following lines.
The line slope y-
interc
ept
y = 3x + 2 3 2
y = – 2x + 5 –2 5
y = 3/2 x – 4 3/2 –4
It is no coincidence that when an equation of the line is solved for y, the coefficient of the x
term represents the slope, and the constant term represents the y-intercept.
In other words, for the line y = mx + b, m is the slope, and b is the y-intercept.
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Name:_________________________________ Chapter 1 Problem Sets
Find the slope of the line passing through the following pair of points.
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Chapter 1 Problem Sets Name:_________________________________
Determine the slope of the line from the given equation of the line.
11) y = – 2x + 1 12) y = 3x – 2
13) 2x – y = 6 14) x + 3y = 6
15) 3x – 4y = 12 16) What is the slope of the x-axis? How about the y-
axis?
Graph the line that passes through the given point and has the given slope.
Solution: In the last section we learned that the equation of a line whose slope = m and y-intercept = b
is y = mx + b.
Since m = 5, and b = 3, the equation is y = 5x + 3.
Example 2 Find the equation of the line that passes through the point (2, 7) and has slope 3.
Example 3 Find an equation of the line that passes through the points (–1, 2), and (1, 8).
8–2 6
Solution: m = 1 – (-1) = 2 = 3
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Chapter 1: Linear Equations 13
Example 4 Find an equation of the line that has x-intercept 3, and y-intercept 4.
Solution: x-intercept = 3, and y-intercept = 4 correspond to the points (3, 0), and (0, 4), respectively.
4–0 4
m=0–3 = –3
So the partial equation for the line is y = – 4/3 x + b
Substituting (0, 4) gives
4 = – 4/3(0) + b
4=b
Therefore, the equation is y = – 4/3 x + 4.
The Standard form of a Line: Ax + By = C
Another useful form of the equation of a line is the Standard form.
Let L be a line with slope m, and containing a point (x1, y1). If (x, y) is any other point on
the line L, then by the definition of a slope, we get
y – y1
m= x–x
1
y – y1 = m(x – x1)
The last result is referred to as the point-slope form or point-slope formula. If we simplify
this formula, we get the equation of the line in the standard form, Ax + By = C.
Example 5 Using the point-slope formula, find the standard form of an equation of the line that passes
through the point (2, 3) and has slope –3/5.
Solution: Substituting the point (2, 3) and m= – 3/5 in the point-slope formula, we get
y – 3 = – 3/5(x - 2)
Multiplying both sides by 5 gives us
5(y – 3) = – 3(x - 2)
5y – 15 = – 3x + 6
3x + 5y = 21
Example 6 Find the standard form of the line that passes through the points (1, -2), and (4, 0).
0 – (-2) 2
Solution: m= 4–1 = 3
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14 Chapter 1: Linear Equations
3y + 6 = 2x - 2
– 2x + 3y = – 8
2x – 3y = 8.
We should always be able to convert from one form of an equation to another. That is, if we
are given a line in the slope-intercept form, we should be able to express it in the standard
form, and vice versa.
Finally, we learn a very quick and easy way to write an equation of a line in the standard
form. But first we must learn to find the slope of a line in the standard form by inspection.
By solving for y, it can easily be shown that the slope of the line Ax + By = C is –A/B. The
reader should verify.
3 3
Solution: a) A = 3, B = –5, therefore, m = – –5 = 5
2
b) A = 2, B = 7, therefore, m = – 7
4 4
c) m = – –3 =3
Now that we know how to find the slope of a line in the standard form by inspection, our job
in finding the equation of a line is going to be very easy.
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Chapter 1: Linear Equations 15
Example 10 Find an equation of the line that passes through (2, 3) and has slope – 4/5.
Solution: Since the slope of the line is – 4/5, we know that the left side of the equation is 4x + 5y, and
the partial equation is going to be
4x + 5y = c
Of course, c can easily be found by substituting for x and y.
4(2) + 5(3) = c
23 = c
The desired equation is
4x + 5y = 23.
If you use this method often enough, you can do these problems very quickly.
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Name:_________________________________ Chapter 1 Problem Sets
Write an equation of the line satisfying the following conditions. Write the equation in the form y = mx + b.
1) It passes through the point (3, 10) and has slope = 2) It passes through the point (4,5) and has m = 0.
2.
3) It passes through (3, 5) and (2, – 1). 4) It has slope 3, and its y-intercept equals 2.
5) It passes through (5, – 2) and m = 2/5. 6) It passes through (– 5, – 3) and (10, 0).
7) It passes through (4, – 4) and (5, 3). 8) It passes through (7, – 2) and its y-intercept is 5.
9) It passes through (2, – 5) and its x-intercept is 4. 10) Its a horizontal line through the point (2, – 1).
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Chapter 1 Problem Sets Name:_________________________________
11) It passes through (5, – 4) and (1, – 4). 12) It is a vertical line through the point (3, – 2).
13) It passes through (3, – 4) and (3, 4). 14) It has x-intercept = 3 and y-intercept = 4.
Write an equation of the line satisfying the following conditions. Write the equation in the form Ax + By = C.
15) It passes through (3, – 1) and m = 2. 16) It passes through (– 2, 1) and m = – 3/2.
17) It passes through (– 4, – 2) and m = 3/4. 18) Its x-intercept equals 3, and m = – 5/3.
19) It passes through (2, – 3) and (5, 1). 20) It passes through (1, – 3) and (– 5, 5).
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16 Chapter 1: Linear Equations
1.4 Applications
Now that we have learned to determine equations of lines, we get to apply these ideas in real-
life equations.
Example 1 A taxi service charges $0.50 per mile plus a $5 flat fee. What will be the cost of traveling 20
miles? What will be cost of traveling x miles?
Example 2 The variable cost to manufacture a product is $10 and the fixed cost $2500. If x represents
the number of items manufactured and y the total cost, write the cost function.
Solution: The fact that the variable cost represents the slope and the fixed cost represents the y-
intercept, makes m = 10 and y = 2500.
Therefore, the cost equation is y = 10x + 2500.
Example 3 It costs $750 to manufacture 25 items, and $1000 to manufacture 50 items. Assuming a
linear relationship holds, find the cost equation, and use this function to predict the cost of
100 items.
Solution: We let x = the number of items manufactured, and let y = the cost.
Solving this problem is equivalent to finding an equation of a line that passes through the
points (25, 750) and (50, 1000).
1000 - 750
m = 50 - 25 = 10
Therefore, the partial equation is y = 10x + b
By substituting one of the points in the equation, we get b = 500
Therefore, the cost equation is y = 10x + 500
Now to find the cost of 100 items, we substitute x = 100 in the equation y = 10x + 500
So the cost = y = 10(100) + 500 = 1500
Example 4 The freezing temperature of water in Celsius is 0 degrees and in Fahrenheit 32 degrees. And
the boiling temperatures of water in Celsius, and Fahrenheit are 100 degrees, and 212
degrees, respectively. Write a conversion equation from Celsius to Fahrenheit and use this
equation to convert 30 degrees Celsius into Fahrenheit.
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Chapter 1: Linear Equations 17
100 212
Again, solving this problem is equivalent to finding an equation of a line that passes through
the points (0, 32) and (100, 212).
Since we are finding a linear relationship, we are looking for an equation y = mx + b, or in
this case F = mC + b, where x or C represent the temperature in Celsius, and y or F the
temperature in Fahrenheit.
212 – 32 9
slope m = 100 – 0 = 5
9
The equation is F = 5 C + b
Substituting the point (0, 32), we get
9
F = 5 C + 32.
Now to convert 30 degrees Celsius into Fahrenheit, we substitute C = 30 in the equation
9
F = 5 C + 32
9
F = 5 (30) + 32 = 86
Example 5 The population of Canada in the year 1970 was 18 million, and in 1986 it was 26 million.
Assuming the population growth is linear, and x represents the year and y the population,
write the function that gives a relationship between the time and the population. Use this
equation to predict the population of Canada in 2010.
Solution: The problem can be made easier by using 1970 as the base year, that is, we choose the year
1970 as the year zero. This will mean that the year 1986 will correspond to year 16, and the
year 2010 as the year 40.
Solving this problem is equivalent to finding an equation of a line that passes through the
points (0, 18) and (16, 26).
26 – 18 1
m = 16 – 0 = 2
1
The equation is y = 2 x + b
Substituting the point (0, 18), we get
1
y = 2 x + 18
Now to find the population in the year 2010, we let x = 40 in the equation
1
y = 2 x + 18
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18 Chapter 1: Linear Equations
1
y = 2 (40) + 18 = 38
So the population of Canada in the year 2010 will be 38 million.
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Name:_________________________________ Chapter 1 Problem Sets
1) The variable cost to manufacture a product is $25, 2) It costs $90 to rent a car driven 100 miles and $140
and the fixed costs are $1200. If x represents the for one driven 200 miles. If x is the number of
number of items manufactured and y the cost, write miles driven and y the total cost of the rental, write
the cost function. the cost function.
3) The variable cost to manufacture an item is $20, 4) To manufacture 30 items, it costs $2700, and to
and it costs a total of $750 to produce 20 items. If x manufacture 50 items, it costs $3200. If x
represents the number of items manufactured and y represents the number of items manufactured and y
the cost, write the cost function. the cost, write the cost function.
5) To manufacture 100 items, it costs $32,000, and to 6) It costs $1900 to manufacture 60 items, and the
manufacture 200 items, it costs $40,000. If x fixed costs are $700. If x represents the number of
represents the number of items manufactured and y items manufactured and y the cost, write the cost
the cost, write the cost function. function.
7) A person who weighs 150 pounds has 60 pounds of 8) A spring on a door stretches 6 inches if a force of
muscles, and a person that weighs 180 pounds has 30 pounds is applied, and it stretches 10 inches if a
72 pounds of muscles. If x represents the body force of 50 pounds is applied. If x represents the
weight and y the muscle weight, write an equation number of inches stretched, and y the force applied,
describing their relationship. Use this relationship write an equation describing the relationship. Use
to determine the muscle weight of a person that this relationship to determine the amount of force
weighs 170 pounds. required to stretch the spring 12 inches.
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Chapter 1 Problem Sets Name:_________________________________
9). A male college student who is 64 inches tall weighs 10) EZ Clean company has determined that if it spends
110 pounds, and another student who is 74 inches $30,000 on advertisement, it can hope to sell
tall weighs 180 pounds. Assuming the relationship 12,000 of its Minivacs a year, but if it spends
between male students' heights (x), and weights (y) $50,000, it can sell 16,000. Write an equation that
is linear, write a function to express weights in gives a relationship between the number of dollars
terms of heights, and use this function to predict the spent on advertisement(x) and the number of
weight of a student who is 68 inches tall. minivacs sold(y).
11) The freezing temperatures for Celsius and 12) By reversing the coordinates in the previous
Fahrenheit scales are 0 degree and 32 degrees, problem, find a conversion function that converts
respectively. The boiling temperatures for Celsius Fahrenheit into Celsius, and use this conversion
and Fahrenheit are 100 degrees and 212 degrees, function to convert 72 degrees Fahrenheit into an
respectively. Let C denote the temperature in equivalent Celsius measure.
Celsius and F in Fahrenheit. Write the conversion
function from Celsius to Fahrenheit, and use this
function to convert 25 degrees Celsius into an
equivalent Fahrenheit measure.
13) The population of California in the year 1960 was 14) In the U. S. the number of people infected with the
17 million, and in 1995 it was 32 million. Write HIV virus in 1985 was 1,000, and in 1995 that
the population function, and use this function to number became 350,000. If the increase in the
find the population of California in the year 2010. number is linear, write an equation that will give
(Hint: Use the year 1960 as the base year, that is, the number of people infected in any year. If this
assume 1960 as the year zero. This will make trend continues, what will the number be in 2010?
1995, and 2010 as the years 35, and 50, (Hint: See previous problem.)
respectively.)
15) In 1975, an average house in San Jose cost $45,000 16) An average math text book cost $25 in 1980, and
and the same house in 1995 costs $195, 000. Write $60 in 1995. Write an equation that will give the
an equation that will give the price of a house in price of a math book in any given year, and use this
any year, and use this equation to predict the price equation to predict the price of the book in 2010.
of a similar house in the year 2010.
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Chapter 1: Linear Equations 19
Solution: We graph both lines on the same axes, as shown below, and read the solution (2, 5).
Finding an intersection of two lines graphically is not always easy or practical; therefore, we
will now learn to solve these problems algebraically.
At the point where two lines intersect, the x and y values for both lines are the same. So in
order to find the intersection, we either let the x-values or the y-values equal.
If we were to solve the above example algebraically, it will be easier to let the y-values equal.
Since y = 3x – 1 for the first line, and y = – x + 7 for the second line, by letting the y-values
equal, we get
3x – 1 = – x + 7
4x = 8
x=2
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20 Chapter 1: Linear Equations
Example 2 Find the intersection of the lines 2x + y = 7 and 3x – y = 3 by the elimination method.
Solution: We add the left and right sides of the two equations.
2x + y = 7
3x – y = 3
5x = 10
x=2
Solution: If we add the two equations, none of the variables are eliminated. But the variable x can be
eliminated by multiplying the first equation by –2, and leaving the second equation
unchanged.
– 2x – 4y = – 6
2x + 3y = 4
–y=–2
y=2
Substituting y = 2 in x + 2y = 3, we get
x + 2(2) = 3
x = –1
Therefore, the solution is (–1, 2).
Page 34
Chapter 1: Linear Equations 21
Solution: This time, we multiply the first equation by – 4 and the second by 3 before adding. (The
choice of numbers is not unique.)
– 12x + 16y = – 20
12x – 15y = 18
y=–2
By substituting y = – 2 in any one of the equations, we get x = –1. Hence the solution (–1, –2).
Example 5 The supply curve for a product is y = 1.5x + 10 and the demand curve for the same product is
y = – 2.5x + 34, where x is the price and y the number of items produced. Find the following.
a) How many items will be supplied at a price of $10?
b) How many items will be demanded at a price of $10?
c) Determine the equilibrium price.
d) How many items will be produced at the equilibrium price?
Solution: a) We substitute x = 10 in the supply equation, y = 1.5x + 10, and the answer is y = 25.
b) We substitute x = 10 in the demand equation, y = – 2.5x + 34, and the answer is y = 9.
c) By letting the supply equal the demand, we get
1.5x + 10 = – 2.5x + 34
4x = 24
x=6
d) We substitute x = 6 in either the supply or the demand equation and we get y = 19.
The graph below shows the intersection of the supply and the demand functions and their
point of intersection, (6, 19).
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22 Chapter 1: Linear Equations
Break-Even Point
In a business, the profit is generated by selling products. If a company sells x number of
items at a price P, then the revenue R is P times x , i.e., R = P . x. The production costs are
the sum of the variable costs and the fixed costs, and are often written as C = mx + b, where x
is the number of items manufactured.
A company makes a profit if the revenue is greater than the cost, and it shows a loss if the
cost is greater than the revenue. The point on the graph where the revenue equals the cost is
called the Break-even point.
Example 6 If the revenue function of a product is R = 5x and the cost function is y = 3x + 12, find the
following.
a) If 4 items are produced, what will the revenue be?
b) What is the cost of producing 4 items?
c) How many items should be produced to break-even?
d) What will be the revenue and the cost at the break-even point?
Solution: a) We substitute x = 4 in the revenue equation R = 5x, and the answer is R = 20.
b) We substitute x = 4 in the cost equation C = 3x + 12, and the answer is C = 24.
c) By letting the revenue equal the cost, we get
5x = 3x + 12
x=6
d) We substitute x = 6 in either the revenue or the cost equation, and we get R = C = 30.
The graph below shows the intersection of the revenue and the cost functions and their point
of intersection, (6, 30).
Page 36
Chapter 1: Linear Equations 23
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Page 38
Name:_________________________________ Chapter 1 Problem Sets
3) The supply curve for a product is y = 2000x + 4) The supply curve for a product is y = 300x + 9000,
13000, and the demand curve is y = – 1000x + and the demand curve is y = – 100x + 14000,
28000, where x represents the price and y the where x represents the price and y the number of
number of items. At what price will the supply items. At what price will the supply equal demand,
equal demand, and how many items will be and how many items will be produced at that price?
produced at that price?
5) A demand curve for a commodity is the number of 6) A supply curve for a commodity is the number of
items the consumer will buy at different prices. It items of the product that can be made available at
has been determined that at a price of $2 a store can different prices. A manufacturer of toy dolls can
sell 2400 of a particular type of toy dolls, and for a supply 2000 dolls if the dolls are sold for $8 each,
price of $8 the store can sell 600 such dolls. If x but he can supply only 800 dolls if the dolls are sold
represents the price of dolls and y the number of for $2 each. If x represents the price of dolls and y
items sold, write an equation for the demand curve. the number of items, write an equation for the
supply curve.
Page 39
Chapter 1 Problem Sets Name:_________________________________
7) The equilibrium price is the price where the supply 8) A car rental company offers two plans. Plan I
equals the demand. From the demand and supply charges $10 a day and 10 cents a mile, while Plan
curves obtained in the previous two problems, find II charges 14 cents a mile, but no flat fee. If you
the equilibrium price, and determine the number of were to drive 300 miles in a day, which plan is
items that can be sold at that price. better? For what mileage are both rates equal?
9) A break-even point is the intersection of the cost 10) A company's revenue and cost in dollars are given
function and the revenue function, that is, where by R = 225x and C = 75x + 6000, where x is the
the total cost equals revenue. Mrs. Jones Cookies number of items. Find the number of items that
Store's revenue and cost in dollars for x number of must be produced to break-even.
cookies is given by R = .80x and C = .05x + 3000.
Find the number of cookies that must be sold so that
the revenue and cost are the same.
11) A firm producing computer diskettes has a fixed 12) Whackemhard Sports is planning to introduce a
costs of $10,725, and variable cost of 20 cents a new line of tennis rackets. The fixed costs for the
diskette. Find the break-even point if the diskettes new line are $25,000 and the variable cost of
sell for $1.50 each. producing each racket is $60. If the racket sells for
$80, find the number of rackets that must be sold in
order to break even.
Page 40
Name:_________________________________ Chapter 1 Problem Sets
7) Find an equation of the line that has slope 3 and passes through the point (2, 15).
3
8) Find an equation of the line that has slope – 2 and passes through the point (4, 3).
9) Find an equation of the line that passes through the points (0, 32) and (100, 212).
10) Find an equation of the line that passes through the point (2, 5) and is parallel to the line y = 3x + 4.
13) Find two points on the line given by the parametric equations, x = 2 + 3t, y = 1 – 2t.
17) A female college student who is 60 inches tall weighs 100 pounds, and another female student who is 66
inches tall weighs 124 pounds. Assuming the relationship between the female students' weights and heights
is linear, write an equation giving the relationship between heights and weights of female students, and use
this relationship to predict the weight of a female student who is 70 inches tall.
18) In deep-sea diving, the pressure exerted by water plays a great role in designing underwater equipment. If at
a depth of 10 feet there is a pressure of 21 lb/in 2, and at a depth of 50 ft there is a pressure of 75 lb/in 2, write
an equation giving a relationship between depth and pressure. Use this relationship to predict pressure at a
depth of 100 ft.
19) If the variable cost to manufacture an item is $30, and the fixed costs are $2750, write the cost function.
20) The variable cost to manufacture an item is $10, and it costs $2,500 to produce 100 items. Write the cost
function, and use this function to estimate the cost of manufacturing 300 items.
21) It costs $2,700 to manufacture 100 items of a product, and $4,200 to manufacture 200 items. If x represents
the number of items, and y the costs, find the cost equation, and use this function to predict the cost of 1,000
items.
22) In 1980, the average house in Palo Alto cost $280,000 and the same house in 1997 costs $450,000.
Assuming a linear relationship, write an equation that will give the price of the house in any year, and use
this equation to predict the price of a similar house in the year 2010.
Page 41
Chapter 1 Problem Sets Name:_________________________________
23) The population of Argentina in 1987 was 31.5 million and in 1997 it was 42.5 million. Assuming a linear
relationship, write an equation that will give the population of Argentina in any year, and use this equation to
predict the population of Argentina in the year 2010.
24) In 1955, an average new Chevrolet sold for $2,400, and a similar Chevrolet sold for $15,000 in 1995.
Assuming a linear relationship, write an equation that will give the price of an average Chevrolet in any year.
Use this equation to predict the price of an average Chevrolet in the year 2010.
25) Two-hundred items are demanded at a price of $5, and 300 items are demanded at a price of $3. If x
represents the price, and y the number of items, write the demand function.
26) A supply curve for a product is the number of items of the product that can be made available at different
prices. A manufacturer of Tickle Me Elmo dolls can supply 2000 dolls if the dolls are sold for $30 each, but
he can supply only 800 dolls if the dolls are sold for $10 each. If x represents the price of dolls and y the
number of items, write an equation for the supply curve.
27) Suppose you are trying to decide on a price for your latest creation - a coffee mug that never tips. Through a
survey, you have determined that at a price of $2, you can sell 2100 mugs, but at a price of $12 you can only
sell 100 mugs. Furthermore, your supplier can supply you 3500 mugs if you charge your customers $12, but
only 500 if you charge $2. What price should you charge so that the supply equals demand, and at that price
how many coffee mugs will you be able to sell?
28) A car rental company offers two plans. Plan I charges $12 a day and 12 cents a mile, while Plan II charges
$30 a day but no charge for miles. If you were to drive 300 miles in a day, which plan is better? For what
mileage are both rates the same?
29) The supply curve for a product is y = 250x – 1,000 and the demand curve for the same product is y = – 350x
+ 8,000, where x is the price and y the number of items produced. Find the following.
30) The supply curve for a product is y = 625x – 600 and the demand curve for the same product is y = – 125x +
8,400, where x is the price and y the number of items produced. Find the equilibrium price and determine
the number of items that will be produced at that price.
31) Both Jenny and Masur are sales people for Athletic Shoes. Jenny gets paid $8 per hour plus 4% commission
on the sales. Masur gets paid $10 per hour plus 8% commission on the sales in excess of $1,000. If they
work 8-hour days, for what sales amount would they both earn the same daily amounts?
32) A company's revenue and cost in dollars are given by R = 25x and C = 10x + 9,000, where x represents the
number of items. Find the number of items that must be produced to break-even.
33) A firm producing video tapes has fixed costs of $6,800, and a variable cost of 30 cents per tape. If the video
tapes sell for $2 each, find the number of tapes that must be produced to break-even.
34) A firm producing disposable cameras has fixed costs of $8,000, and variable cost of 50 cents a camera. If the
cameras sell for $3.50, how many cameras must be produced to break-even?
35) The Stanley Company is coming up with a new cordless travel shaver just before the Christmas holidays . It
hopes to sell 10,000 of these shavers in the month of December alone. The manufacturing variable cost is $3
and the fixed costs $100,000. If the shavers sell for $11 each, how many must be produced to break-even?
Page 42
CHAPTER 2
Matrices
In this chapter, you will learn to:
1. Do matrix operations.
2. Solve linear systems using the Gauss-Jordan method.
3. Solve linear systems using the matrix inverse method.
4. Do application problems.
Example 1 Fine Furniture Company makes chairs and tables at its San Jose, Hayward, and Oakland
factories. The total production, in hundreds, from the three factories for the years 1994 and
1995 is listed in the table below.
1994 1995
CHAIRS TABLES CHAIRS TABLES
SAN JOSE 30 18 36 20
HAYWARD 20 12 24 18
OAKLAND 16 10 20 12
a) Represent the production for the years 1994 and 1995 as the matrices A and B.
b) Find the difference in sales between the years 1994 and 1995.
c) The company predicts that in the year 2000 the production at these factories will double
that of the year 1994. What will the production be for the year 2000?
30 18 36 20
Solution: a) The matrices are as follows: A = 20 12 B= 24 18
16 10 20 12
b) We are looking for the matrix B – A. When two matrices have the same number of rows
and columns, the matrices can be added or subtracted entry by entry. Therefore, we get
36–30 20–18 6 2
B–A = 24–20 18–12 = 4 6
20–16 12–10 4 2
c) We would like a matrix that is twice the matrix of 1994, i.e., 2A.
Page 43
32 Chapter 2: Matrices
30 18 60 36
2A = 2 20 12 = 40 24
16 10 32 20
Before we go any further, we need to familiarize ourselves with some terms that are
associated with matrices. The numbers in a matrix are called the entries or the elements of a
matrix. Whenever we talk about a matrix, we need to know the size or the dimension of the
matrix. The dimension of a matrix is the number of rows and columns it has. When we say a
matrix is a 3 by 4 matrix, we are saying that it has 3 rows and 4 columns. The rows are
always mentioned first and the columns second. This means that a 3 4 matrix does not have
the same dimension as a 4 3 matrix. A matrix that has the same number of rows as columns
is called a square matrix. A matrix with all entries zero is called a zero matrix. A square
matrix with 1's along the main diagonal and zeros everywhere else, is called an identity
matrix. When a square matrix is multiplied by an identity matrix of same size, the matrix
remains the same. A matrix with only one row is called a row matrix or a row vector, and a
matrix with only one column is called a column matrix or a column vector. Two matrices
are equal if they have the same size and the corresponding entries are equal.
Matrix Addition and Subtraction
If two matrices have the same size, they can be added or subtracted. The operations are
performed on corresponding entries.
1 2 4 2 -1 3 4 –2
A= 2 3 1 B= 2 4 2 C= 2 D= –3
5 0 3 3 6 1 3 4
Find, if possible. a) A + B b) C – D c) A + D.
Solution: As we mentioned earlier, matrix addition and subtraction involves performing these
operations entry by entry.
a) We add each element of A to the corresponding entry of B.
3 1 7
A+B = 4 7 3
8 6 4
b) Just like the problem above, we perform the subtraction entry by entry.
6
C–D = 5
-1
c) The sum A + D cannot be found because the two matrices have different sizes.
Note: Two matrices can only be added or subtracted if they have the same dimension.
Multiplying a Matrix by a Scalar
Page 44
Chapter 2: Matrices 33
Example 3 Given the matrix A and C in the example above, find 2A and – 3C.
Solution: To find 2A, we multiply each entry of matrix A by 2, and to find –3C, we multiply each entry
of C by –3. The results are given below.
a) We multiply each entry of A by 2.
2 4 8
2A = 4 6 2
10 0 6
b) We multiply each entry of C by –3.
–12
–3C = –6
–9
a
Example 4 Given A = [ 2 3 4 ] and B = b , find the product AB.
c
Solution: The product is a 1 1 matrix whose entry is obtained by multiplying the corresponding
entries and then forming the sum.
a
AB = [ 2 3 4 ] b
c
= [ (2a + 3b + 4c)]
Note that AB is a 1 1 matrix, and its only entry is 2a + 3b + 4c.
Page 45
34 Chapter 2: Matrices
5
Example 5 Given A = [ 2 3 4 ] and B = 6 , find the product AB.
7
5
AB = [ 2 3 4 ] 6
7
= [2. 5 + 3. 6+ 4. 7]
= [ 10 + 18 + 28 ]
= [ 56 ]
Note: In order for a product of a row matrix and a column matrix to exist, the number of
entries in the row matrix must be the same as the number of entries in the column matrix.
5 3
Example 6 Given A = [ 2 3 4 ] and B = 6 4 , find the product AB.
7 5
Solution: We already know how to multiply a row matrix by a column matrix. To find the product
AB, in this example, we will be multiplying the row matrix A to both the first and second
columns of matrix B, resulting in a 1 2 matrix.
AB = [ 2 . 5 + 3 . 6 + 4 . 7 2. 3 + 3. 4+ 4. 5 ]
= [ 56 38 ]
We have just multiplied a 1 3 matrix by a matrix whose size is 3 2. So unlike addition
and subtraction, it is possible to multiply two matrices with different dimensions as long as
the number of entries in the rows of the first matrix are the same as the number of entries in
columns of the second matrix.
5 3
2 3 4
Example 7 Given A = and B = 6 4 , find the product AB.
1 2 3
7 5
Solution: This time we are multiplying two rows of the matrix A with two columns of the matrix B.
Since the number of entries in each row of A are the same as the number of entries in each
column of B, the product is possible. We do exactly what we did in the last example. The
only difference is that the matrix A has one more row.
We multiply the first row of the matrix A with the two columns of B, one at a time, and then
repeat the process with the second row of A. We get
Page 46
Chapter 2: Matrices 35
5 3
2 3 4
AB = 6 4
1 2 3
7 5
2. 5 + 3. 6+ 4. 7 2. 3 + 3. 4+ 4. 5
=
1. 5 + 2. 6+ 3.7 1. 3 + 2. 4+ 3. 5
56 38
= 38 26
1 2
2 -1 –3
E= 4 2 F= 3 2 G= [ 4 1 ] H= –1
3 1
Find, if possible. a) EF b) FE c) FH d) GH
2 –1
Solution: a) To find EF, we multiply the first row [ 1 2 ] of E with the columns 3 and 2 of
the matrix F, and then repeat the process by multiplying the other two rows of E with these
columns of F. The result is as follows:
1 2
2 -1
EF = 4 2
3 2
3 1
1. 2 + 2. 3 1 . -1 + 2 . 2 8 3
= 4. 2 + 2. 3 4 . -1 + 2 . 2 = 14 0
3. 2 + 1. 3 3 . -1 + 1 . 2 9 –1
b) The product FE is not possible because the matrix F has two entries in each row, while
the matrix E has three entries in each column. In other words, the matrix F has two
columns, while the matrix E has three rows.
2 -1 –3 2 . -3 + -1 . -1 –5
c) FH = 3 2 –1 = =
3 . -3 + 2 . -1 –11
–3
d) GH = [ 4 1 ]
–1 = [ 4 . –3 + 1 . -1 ] = [ -13 ]
Page 47
36 Chapter 2: Matrices
1 0 2 0 –1 2 –2 3 0
R= 2 1 5 S= 3 1 0 T= –3 2 2
2 3 1 4 2 1 –1 1 0
Find 2RS – 3ST.
8 3 4
RS = 23 9 9
13 3 5
8 3 4 16 6 8
2RS = 2 23 9 9 = 46 18 18
13 3 5 26 6 10
1 0 –2
ST = –9 11 2
–15 17 4
1 0 –2 3 0 –6
3ST = 3 –9 11 2 = –27 33 6
–15 17 4 –45 51 12
16 6 8 3 0 –6
2RS – 3ST = 46 18 18 – –27 33 6 =
26 6 10 –45 51 12
13 6 14
73 –15 12
71 –45 –2
In this chapter, we will be using matrices to solve linear systems. In section 2.4, we will be
asked to express linear systems as the matrix equation AX = B, where A, X, and B are
matrices. The matrix A is called the coefficient matrix.
Example 10 Verify that the system of two linear equations with two unknowns:
ax + by = h
cx + dy = k
can be written as AX = B, where
a b x h
A= c d X= y and B = k
a b x ax + by
AX = c d y = cx + dy
If AX = B then
Page 48
Chapter 2: Matrices 37
ax + by h
cx + dy = k
If two matrices are equal, then their corresponding entries are equal. Therefore, it follows
that
ax + by = h
cx + dy = k
Solution: The above system of equations can be expressed in the form AX = B as shown below.
2 3 –4 x 5
3 4 –5 y = 6
5 0 –6 z 7
Page 49
Page 50
Name:_________________________________ CHAPTER 2 PROBLEMS SETS
1) Determine total sales for the two months, that is, 2) Find the difference in sales, J – F.
find J + F.
3) If hot dogs sell for $3 and corn dogs for $2, find the 4) If March sales will be up from February by 10%,
revenue from the sale of hot dogs and corn dogs. 15%, and 20% at Place I, Place II, and Place III,
Hint: Let P be a 2 1 matrix. Find (J + F)P. respectively, find the expected number of hot dogs,
and corn dogs to be sold in March. Hint: Let R be a
1 3 matrix with entries 1.10, 1.15, and 1.20. Find
RF.
Determine the sums and products in problems 5-10. Given the matrices A, B, C, and D as follows:
3 6 1 1 -1 2 1
A= 0 1 3 B= 1 4 2 C= 2 D= [ 2 3 2]
2 4 1 3 1 1 3
5) 3A – 2B 6) AB + BA
Page 51
CHAPTER 2 PROBLEMS SETS Name:_________________________________
7) A2 8) 2BC
9) 2CD + 3AB 2
10) A B
m n a b 3 6 1 x
11) Let E = p q and F = c d , find EF. 12) Let G = 0 1 3 H = y , find GH.
2 4 1 z
15) 2x + 3z = 17 16) x + 2y + 3z + 2w = 14
3x – 2y = 10 x – 2y – z = –5
5y + 2z = 11 y – 2z + 4w = 9
x + 3z + 3w = 15
Page 52
38 Chapter 2: Matrices
Solution: We express the above information in matrix form. Since a system is entirely determined by
its coefficient matrix and by its matrix of constant terms, the augmented matrix will include
only the coefficient matrix and the constant matrix. So the augmented matrix we get is as
follows:
2 3 –4 | 5
3 4 –5 | –6
4 5 –6 | 7
In the last section, we expressed the system of equations as AX = B, where A represented the
coefficient matrix, and B the matrix of constant terms. As an augmented matrix, we write the
matrix as [ A | B]. It is clear that all of the information is maintained in this matrix form, and
only the letters x, y and z are missing. A student may choose to write x, y and z on top of the
first three columns to help ease the transition.
Example 2 For the following augmented matrix, write the system of equations it represents.
1 3 –5 | 2
2 0 –3 | –5
3 2 –3 | –1
Page 53
Chapter 2: Matrices 39
The method is not much different form the algebraic operations we employed in the
elimination method in the first chapter. The basic difference is that it is algorithmic in nature,
and, therefore, can easily be programmed on a computer.
We will next solve a system of two equations with two unknowns, using the elimination
method, and then show that the method is analogous to the Gauss-Jordan method.
Solution: We multiply the first equation by – 3, and add it to the second equation.
–3x – 9y = – 21
3x + 4y = 11
– 5y = –10
By doing this we have transformed our original system into an equivalent system as follows.
x + 3y = 7
– 5y = –10
We divide the second equation by – 5, and we get the next equivalent system.
x + 3y = 7
y = 2
Now we multiply the second equation by – 3 and add to the first, we get
x = 1
y = 2
Example 4 Solve the following system from Example 3 by the Gauss-Jordan method, and show the
similarities in both methods by writing the equations next to the matrices.
x + 3y = 7
3x + 4y = 11
1 3 | 7 x + 3y = 7
3 4 | 11 3x + 4y = 11
We multiply the first row by – 3, and add to the second row.
1 3 | 7 x + 3y = 7
0 –5 | –10 – 5y = –10
We divide the second row by – 5, we get,
Page 54
40 Chapter 2: Matrices
1 3 | 7 x + 3y = 7
0 1 | 2 y = 2
Finally, we multiply the second row by – 3 and add to the first row, and we get,
1 0 | 1 x = 1
0 1 | 2 y = 2
Now we list the three row operations the Gauss-Jordan method employs.
Row Operations
1. Any two rows in the augmented matrix may be interchanged.
2. Any row may be multiplied by a non-zero constant.
3. A constant multiple of a row may be added to another row.
One can easily see that these three row operation may make the system look different, but
they do not change the solution of the system.
The first row operation states that if any two rows of a system are interchanged, the new
system obtained has the same solution as the old one. Let us look at an example in two
equations with two unknowns. Consider the system
x + 3y = 7
3x + 4y = 11
We interchange the rows, and we get,
3x + 4y = 11
x + 3y = 7
Clearly, this system has the same solution as the one above.
The second operation states that if a row is multiplied by any non-zero constant, the new
system obtained has the same solution as the old one. Consider the above system again,
x + 3y = 7
3x + 4y = 11
We multiply the first row by –3, we get,
–3x – 9y = – 21
3x + 4y = 11
Again, it is obvious that this new system has the same solution as the original.
The third row operation states that any constant multiple of one row added to another
preserves the solution. Consider our system,
x + 3y = 7
Page 55
Chapter 2: Matrices 41
3x + 4y = 11
If we multiply the first row by – 3, and add it to the second row, we get,
x + 3y = 7
– 5y = –10
And once again, the same solution is maintained.
Now that we understand how the three row operations work, it is time to introduce the Gauss-
Jordan method to solve systems of linear equations.
As mentioned earlier, the Gauss-Jordan method starts out with an augmented matrix, and by a
series of row operations ends up with a matrix that is in the reduced row echelon form. A
matrix is in the reduced row echelon form if the first nonzero entry in each row is a 1, and the
columns containing these 1's have all other entries as zeros. The reduced row echelon form
also requires that the leading entry in each row be to the right of the leading entry in the row
above it, and the rows containing all zeros be moved down to the bottom.
We state the Gauss-Jordan method as follows.
Gauss-Jordan Method
1. Write the augmented matrix.
2. Interchange rows if necessary to obtain a non-zero number in the first row, first
column.
3. Use a row operation to make the entry in the first row, first column, a 1.
4. Use row operations to make all other entries as zeros in column one.
5. Interchange rows if necessary to obtain a nonzero number in the second row,
second column. Use a row operation to make this entry 1. Use row operations to
make all other entries as zeros in column two.
6. Repeat step 5 for row 3, column 3. Continue moving along the main diagonal
until you reach the last row, or until the number is zero.
The final matrix is called the reduced row-echelon form.
Page 56
42 Chapter 2: Matrices
2 1 2 | 10
1 2 1 | 8
3 1 -1 | 2
We want a 1 in row one, column one. This can be obtained by dividing the first row by 2, or
interchanging the second row with the first. Interchanging the rows is a better choice because
that way we avoid fractions.
1 2 1 | 8
2 1 2 | 10 we interchanged row 1(R1) and row 2(R2)
3 1 –1 | 2
We need to make all other entries zeros in column 1. To make the entry (2) a zero in row 2,
column 1, we multiply row 1 by - 2 and add it to the second row. We get,
1 2 1 | 8
0 –3 0 | –6 –2R1 + R2
3 1 –1 | 2
To make the entry (3) a zero in row 3, column 1, we multiply row 1 by - 3 and add it to the
third row. We get,
1 2 1 | 8
0 –3 0 | –6 –3R1 + R3
0 –5 –4 | –22
So far we have made a 1 in the left corner and all other entries zeros in that column. Now we
move to the next diagonal entry, row 2, column 2. We need to make this entry(–3) a 1 and
make all other entries in this column zeros. To make row 2, column 2 entry a 1, we divide
the entire second row by –3.
1 2 1 | 8
0 1 0 | 2 R2 ÷ (–3)
0 –5 –4 | –22
Next, we make all other entries zeros in the second column.
1 0 1 | 4
0 1 0 | 2 –2R2 + R1 and 5R2+ R3
0 0 –4 | –12
We make the last diagonal entry a 1, by dividing row 3 by – 4.
1 0 1 | 4
0 1 0 | 2 R3 ÷ (– 4)
0 0 1 | 3
Finally, we make all other entries zeros in column 3.
Page 57
Chapter 2: Matrices 43
1 0 0 | 1
0 1 0 | 2 –R3 + R1
0 0 1 | 3
Clearly, the solution reads x =1, y = 2, and z = 3.
Before we leave this section, we mention some terms we may need in the fourth chapter. The
process of obtaining a 1 in a location, and then making all other entries zeros in that column,
is called pivoting. The number that is made a 1 is called the pivot element, and the row that
contains the pivot element is called the pivot row. We often multiply the pivot row by a
number and add it to another row to obtain a zero in the latter. The row to which a multiple
of pivot row is added is called the target row.
Page 58
Name:_________________________________ CHAPTER 2 PROBLEMS SETS
1) x + 3y = 1 2) x – y – z = –1
2x – 5y = 13 x – 3y + 2z = 7
2x – y + z = 3
3) x + 2y + 3z = 9 4) x + 2y = 0
3x + 4y + z = 5 y + z = 3
2x – y + 2z = 11 x + 3z = 14
Page 59
CHAPTER 2 PROBLEMS SETS Name:_________________________________
5) Two apples and four bananas cost $2.00 and three 6) A bowl of corn flakes, a cup of milk, and an egg
apples and five bananas cost $2.70. Find the price provide 16 grams of protein. A cup of milk and two
of each. eggs provide 21 grams of protein, and two bowls of
corn flakes with two cups of milk provide 16 grams
of protein. How much protein is provided by one
unit of each of these three foods.
7) x + 2y = 10 8) x + w = 6
y + z = 5 2x + y + w = 16
z + w = 3 x – 2z = 0
x + w = 5 z +w =5
Page 60
44 Chapter 2: Matrices
If we consider the intersection of two lines in a plane, three things can happen.
1. The lines intersect in exactly one point. This is called an independent system.
2. The lines are parallel, so they do not intersect. This is called an inconsistent system.
3. The lines coincide, so they intersect at infinitely many points. This is a dependent
system.
The figures below shows all three cases.
Every system of equations has either one solution, no solution, or infinitely many solutions.
In the last section, we used the Gauss-Jordan method to solve systems that had exactly one
solution. In this section, we will determine the systems that have no solution, and solve the
systems that have infinitely many solutions.
Page 61
Chapter 2: Matrices 45
Solution: Let us use the Gauss-Jordan method to solve this system. The augmented matrix is as
follows.
1 1 | 7 x+y = 7
1 1 | 9 x+y = 9
If we multiply the first row by – 1 and add to the second row, we get
1 1 | 7 x + y = 7
0 0 | 2 0x + 0y = 2
Since 0 cannot equal 2, the last equation cannot be true for any choices of x and y.
Alternatively, it is clear that the two lines are parallel; therefore, they do not intersect.
At this stage, we are going to start using a calculator to row reduce the augmented matrix.
2 3 –4 | 7
3 4 –2 | 9
5 7 –6 | 20
Now by pressing the key to obtain the reduced row-echelon form, we get
1 0 10 | 0
0 1 –8 | 0
0 0 0 | 1
The last row indicates that the system is inconsistent; therefore, there is no solution.
Solution: The problem clearly asks for the intersection of two lines that are the same; that is, the lines
coincide. This means the lines intersect at an infinite number of points.
A few intersection points are listed as follows: (3, 4), (5, 2), (–1, 8), (–6, 13) etc. However,
when a system has an infinite number of solutions, the solution is often expressed in the
parametric form. This can be accomplished by assigning an arbitrary constant, t, to one of the
variables, and then solving for the remaining variables. Therefore, if we let y = t, then x = 7 –
t. Or we can say all ordered pairs of the form (7 – t, t) satisfy the given system of equations.
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46 Chapter 2: Matrices
Alternatively, while solving the Gauss-Jordan method, we will get the reduced row-echelon
form given below.
1 1 | 7
0 0 | 0
The row of all zeros, can simply be discarded in a manner that it never existed. This leaves us
with only one equation but two variables. And whenever there are more variables than the
equations, the solution must be expressed in terms of an arbitrary constant, as above. That is,
x = 7 – t, y = t.
Solution: The augmented matrix and the reduced row-echelon form are given below.
1 1 1 | 2
2 1 –1 | 3
3 2 0 | 5
1 0 –2 | 1
0 1 3 | 1
0 0 0 | 0
Since the last equation dropped out, we are left with two equations and three variables. This
means the system has infinite number of solutions. We express those solutions in the
parametric form by letting the last variable z equal the parameter t.
The first equation reads x – 2z = 1, therefore, x = 1 + 2z.
The second equation reads y + 3z = 1, therefore, y = 1 – 3z.
And now if we let z = t, the solution is expressed as follows:
x = 1 + 2t, y = 1 – 3t, z = t.
The reader should note that particular solutions to the system can be obtained by assigning
values to the parameter t. For example, if we let t = 2, we have the solution (5, –5, 2).
Page 63
Chapter 2: Matrices 47
1 2 –3 | 5
0 0 0 | 0
0 0 0 | 0
This time the last two equations drop out, and we are left with one equation and three
variables. Again, there are infinite number of solutions. But this time the answer must be
expressed in terms of two arbitrary constants.
If we let z = t and let y = s, then the first equation x + 2y –3z = 5 results in x = 5 – 2s + 3t.
We rewrite the solution as: x = 5 – 2s + 3t, y = s, z = t.
1. If any row of the reduced row-echelon form of the matrix gives a false statement
such as 0 = 1, the system is inconsistent and has no solution.
2. If the reduced row echelon form has fewer equations than the variables and the
system is consistent, then the system has an infinite number of solutions.
Remember the rows that contain all zeros are dropped.
a. If a system has an infinite number of solutions, the solution must be
expressed in the parametric form.
b. The number of arbitrary parameters equals the number of variables minus
the number of equations.
Page 64
Name:_________________________________ CHAPTER 2 PROBLEMS SETS
Solve the following inconsistent or dependent systems by using the Gauss-Jordan method.
3) 2x – y = 10 4) x+ y + z = 6
– 4x + 2y = 15 3x + 2y + z = 14
4x + 3y + 2z = 20
Page 65
CHAPTER 2 PROBLEMS SETS Name:_________________________________
9) Find three solutions to the following system of 10) For what values of k the following system of
equations. equations have a). No solution? b). Infinitely
many solutions?
x + 2y + z = 12
x + 2y = 5
y = 3
2x + 4y = k
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48 Chapter 2: Matrices
Example 1 Given matrices A and B below, verify that they are inverses.
4 1 1 –1
A = 3 1 B = –3 4
Solution: The matrices are inverses if the product AB and BA both equal I2, the identity matrix of
dimension 2 2.
4 1 1 –1 1 0
AB = 3 1 –3 4 = 0 1 and
1 –1 4 1 1 0
BA = –3 4 3 1 = 0 1
Clearly that is the case; therefore, the matrices A and B are inverses of each other.
3 1
A = 5 2
a b
B= c d
Then AB = I
3 1 a b 1 0
5 2 c d = 0 1
After multiplying the two matrices on the left side, we get
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Chapter 2: Matrices 49
3a + c 3b + d 1 0
5a + 2c 5b + 2d = 0 1
Equating the corresponding entries, we get four equations with four unknowns as follows:
3a + c =1 3b + d = 0
5a + 2c = 0 5b + 2d = 1
Solving this system, we get
a=2 b = –1 c = –5 d=3
Therefore, the inverse of the matrix A is
2 –1
–5 3
In this problem, finding the inverse of matrix A amounted to solving the system of equations:
3a + c =1 3b + d = 0
5a + 2c = 0 5b + 2d = 1
Actually, it can be written as two systems, one with variables a and c, and the other with b
and d. The augmented matrices for both are given below.
3 1 | 1 3 1 | 0
5 2 | 0 and 5 2 | 1
As we look at the two augmented matrices, we notice that the coefficient matrix for both the
matrices is the same. Which implies the row operations of the Gauss-Jordan method will also
be the same. A great deal of work can be saved if the two right hand columns are grouped
together to form one augmented matrix as below.
3 1 | 1 0
5 2 | 0 1
And solving this system, we get
1 0 | 2 –1
0 1 | –5 3
The matrix on the right side of the vertical line is the A–1 matrix.
What you just witnessed is no coincidence. This is the method that is often employed in
finding the inverse of a matrix.
We list the steps, as follows:
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50 Chapter 2: Matrices
1 –1 1
A = 2 3 0
0 –2 1
1 –1 1 | 1 0 0
2 3 0 | 0 1 0
0 –2 1 | 0 0 1
We reduce this matrix using the Gauss-Jordan method.
Multiplying the first row by –2 and adding it to the second row, we get
1 –1 1 | 1 0 0
0 5 –2 | –2 1 0
0 –2 1 | 0 0 1
If we swap the second and third rows, we get
1 –1 1 | 1 0 0
0 –2 1 | 0 0 1
0 5 –2 | –2 1 0
Divide the second row by –2. The result is
1 –1 1 | 1 0 0
0 1 –1/2 | 0 0 –1/2
0 5 –2 | –2 1 0
Let us do two operations here. 1) Add the second row to first, 2) Add -5 times the second
row to the third. And we get
1 0 1/2 | 1 0 –1/2
0 1 –1/2 | 0 0 –1/2
0 0 1/2 | –2 1 5/2
Multiplication of the third row by 2 results in
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Chapter 2: Matrices 51
1 0 1/2 | 1 0 –1/2
0 1 –1/2 | 0 0 –1/2
0 0 1 | –4 2 5
Multiply the third row by 1/2 and add it to the second. Also, multiply the third row by –1/2
and add it to the first. We get
1 0 0 | 3 –1 –3
0 1 0 | –2 1 2
0 0 1 | –4 2 5
Therefore, the inverse of matrix A is
3 –1 –3
–2 1 2
–4 2 5
One should verify the result by multiplying the two matrices to see if the product does,
indeed, equal the identity matrix.
Now that we know how to find the inverse of a matrix, we will use inverses to solve systems
of equations. The method is analogous to solving a simple equation like the one below.
2
3 x=4
2
3 x=4
Solution: To solve the above equation, we multiply both sides of the equation by the multiplicative
2 3
inverse of 3 which happens to be 2 . We get
3 .2 .3
2 3 x=4 2
x = 6.
We use the above example as an analogy to show how linear systems of the form AX = B are
solved.
To solve a linear system, we first write the system in the matrix equation AX = B, where A is
the coefficient matrix, X the matrix of variables, and B the matrix of constant terms. We then
multiply both sides of this equation by the multiplicative inverse of the matrix A.
Consider the following example.
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52 Chapter 2: Matrices
3 1 x 3
5 2 y = 4
To solve this system, we multiply both sides of the matrix equation AX = B by A–1. Since
the matrix A is the same matrix A whose inverse we found in Example 2,
2 -1
A–1 = -5 3
2 -1 3 1 x 2 -1 3
-5 3 5 2 y = -5 3 4
1 0 x 2
0 1 y = –3
x 2
y = –3
Therefore, x = 2, and y = –3.
Solution: To solve the above equation, we write the system in the matrix form AX = B as follows:
1 –1 1 x 6
2 3 0 y = 1
0 –2 1 z 5
3 –1 –3
A–1 = –2 1 2
–4 2 5
We multiply both sides of the matrix equation AX = B, by A-1, we get
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Chapter 2: Matrices 53
3 –1 –3 1 –1 1 x 3 –1 –3 6
–2 1 2 2 3 0 y = –2 1 2 1
–4 2 5 0 –2 1 z –4 2 5 5
After multiplying the matrices, we get
1 0 0 x 2
0 1 0 y = –1
0 0 1 z 3
x 2
y = –1
z 3
Once again, we remind the reader that not every system of equations can be solved by the
matrix inverse method. Although the Gauss-Jordan method works for every situation, the
matrix inverse method works only in cases where the inverse of the square matrix exists. In
such cases the system has a unique solution.
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Name:_________________________________ CHAPTER 2 PROBLEMS SETS
In problems 1- 2, verify that the given matrices are inverses of each other.
1) 7 3 1 -3 1 -1 0 3 - 4 1
2 1 -2 7 2) 1 0 -1 2 - 4 1
2 3 -4 3 -5 1
3 -5 1 0 2
3) -1 2
4) 0 1 4
0 0 1
1 1 -1 1 1 1
5) 1 0 1 6) 3 1 0
2 1 1 1 1 2
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CHAPTER 2 PROBLEMS SETS Name:_________________________________
In Problems 7-10, first express the system as AX = B, and then solve using matrix inverses found in problems 3-6.
7) 3x – 5y = 2 8) x + 2z = 8
–x + 2y = 0 y + 4z = 8
z = 3
9) x + y – z = 2 10) x + y + z = 2
x + z = 7 3x + y = 7
2x + y + z = 13 x + y + 2z = 3
11) Why is it necessary that a matrix be a square matrix 12) Suppose we are solving a system AX = B by the
for its inverse to exist? Explain by relating the matrix inverse method, but discover A has no
matrix to a system of equations. inverse. How else can we solve this system? What
can be said about the solutions of this system?
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54 Chapter 2: Matrices
1 2
Example 1 Use the matrix A = 1 3 to encode the message: ATTACK NOW!
A 1 T 20 C 3
T = 20 A = 1 K = 11
– 27 O 15
N = 14 W = 23
1 20 3 27 15
20 1 11 14 23 (I)
Now to encode, we multiply, on the left, each matrix of our message by the matrix A. For
example, the product of A with our first matrix is
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Chapter 2: Matrices 55
1 2 1 41
1 3 20 = 61
By multiplying each of the matrices in ( I ) by the matrix A, we get the desired coded
message given below.
41 22 25 55 61
61 23 36 69 84
1 2
Example 2 Decode the following message that was encoded using matrix A = 1 3 .
21 37 45 74 53
26 53 54 101 69 ( II )
Solution: Since this message was encoded by multiplying by the matrix A in Example 1, we decode this
message by first multiplying each matrix, on the left, by the inverse of matrix A given below.
3 –2
A–1 = –1 1
For example,
3 –2 21 11
–1 1 26 = 5
By multiplying each of the matrices in ( II ) by the matrix A–1, we get the following.
11 5 27 20 21
5 16 9 27 16
Finally, by associating the numbers with their corresponding letters, we obtain the following.
K E – T U
E P I – P
Now suppose we wanted to use a 3 3 matrix to encode a message, then instead of dividing
the letters into groups of two, we would divide them into groups of three.
1 1 -1
Example 3 Using the matrix B = 1 0 1 , encode the message: ATTACK NOW!
2 1 1
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56 Chapter 2: Matrices
Note that since the single letter "W" was left over on the end, we added two spaces to make it
into a triplet.
Now we assign the numbers their corresponding letters from the table, and convert each
triplet of numbers into 3 1 matrices. We get
A 1 A 1 – 27 W
T = 20 C = 3 N = 14 – =
T 20 K 11 O 15 –
23
27
27
So far we have,
1 1 27 23
20 3 14 27 ( III )
20 11 15 27
We multiply, on the left, each matrix of our message by the matrix B. For example,
1 1 -1 1 1
1 0 1 20 = 21
2 1 1 20 42
By multiplying each of the matrices in ( III ) by the matrix B, we get the desired coded
message as follows:
1 –7 26 23
21 12 42 50
42 16 83 100
If we need to decode this message, we simply multiply the coded message by B–1, and
associate the numbers with the corresponding letters of the alphabet.
1 1 -1
Example 4 Decode the following message that was encoded using matrix B = 1 0 1 .
2 1 1
11 25 22
20 10 14 ( IV )
43 41 41
Solution: Since this message was encoded by multiplying by the matrix B. We first determine inverse
of B.
1 2 -1
B–1 = -1 -3 2
-1 -1 1
To decode the message, we multiply each matrix, on the left, by B-1. For example,
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Chapter 2: Matrices 57
1 2 -1 11 8
-1 -3 2 20 = 15
-1 -1 1 43 12
By multiplying each of the matrices in ( IV ) by the matrix B–1, we get the following.
8 4 9
15 27 18
12 6 5
Finally, by associating the numbers with their corresponding letters, we obtain the following.
H D I
O – R
L F E
TO ENCODE A MESSAGE
1. Divide the letters of the message into groups of two or three.
2. Convert each group into a string of numbers by assigning a number to
each letter of the message. Remember to assign letters to blank spaces.
3. Convert each group of numbers into column matrices.
3. Convert these column matrices into a new set of column matrices by
multiplying them with a compatible square matrix of your choice that has
an inverse. This new set of numbers or matrices represents the coded
message.
TO DECODE A MESSAGE
1. Take the string of coded numbers and multiply it by the inverse of the
matrix that was used to encode the message.
2. Associate the numbers with their corresponding letters.
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Name:_________________________________ CHAPTER 2 PROBLEMS SETS
1) Encode the message: WATCH OUT! 2) Encode the message: HELP IS ON THE WAY.
In problems 5 - 6, use the matrix B, given below, to encode the given messages.
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CHAPTER 2 PROBLEMS SETS Name:_________________________________
1 0 0
B= 2 1 2
1 0 -1
In problems 7 - 8, decode the messages that were encoded using matrix B.
Make sure to consider the spaces between words, but ignore all punctuation. Add a final space(s) if necessary.
5) Encode the message using matrix B: 6) Encode the message using matrix B:
LUCK IS ON YOUR SIDE. MAY THE FORCE BE WITH YOU.
7) Decode the following message that was encoded 8) Decode the following message that was encoded
using matrix B: using matrix B:
8 23 7 4 47 – 2 15 102 –12 20 58 15 12 69 – 3 11 53 9 5 46 –10 18 95 – 9
27 80 18 12 74 –7 25 107 4 27 76 22 1 72 –26
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58 Chapter 2: Matrices
Example 1 We assume that in a village there is a farmer, carpenter, and a tailor, who provide the three
essential goods: food, shelter, and clothing. Suppose the farmer himself consumes 40% of the
food he produces, and gives 40% to the carpenter, and 20% to the tailor. Thirty percent of the
carpenter's production is consumed by himself, 40% by the farmer, and 30% by the carpenter.
Fifty percent of the tailor's production is used by himself, 30% by the farmer, and 20% by the
tailor. Write the matrix that describes this closed model.
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Chapter 2: Matrices 59
Example 2 In Example 1 above, how much should each person get for his efforts?
29 12
x = 26 t y = 13 t and z = t
Since we are only trying to determine the proportions of the pay, we can choose t to be any
value. Suppose we let t = $2600, then we get
Note: The use of a calculator in solving these problems is strongly recommended. Although
we at De Anza College use TI-85 calculators, any calculator that handles matrices will do.
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60 Chapter 2: Matrices
40
D= 50
60
Example 3 In the example above, what should be, in billions of dollars, the required output by each
industry to meet the demand given by the matrix D?
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Chapter 2: Matrices 61
83.7999
X= 74.2341
84.8138
Therefore, the three industries must produce the following amount of goods in billions of
dollars.
Farmer = $83.7999 Carpenter = $74.2341 Tailor = $84.813
We will do one more problem like the one above, except this time we give the amount of
internal and external consumption in dollars and ask for the proportion of the amounts
consumed by each of the industries. In other words, we ask for the matrix A.
Example 4 Suppose an economy consists of three industries F, C, and T. Again, each of the industries
produces for internal consumption among themselves, as well as, the external demand by the
consumer. The following table gives information about the use of each industry's production
in dollars.
F C T Demand Tota
l
F 4 5 6 100 250
0 0 0
C 3 4 4 110 220
0 0 0
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62 Chapter 2: Matrices
T 2 3 3 120 200
0 0 0
The first row says that of the $250 dollars worth of production by the industry F, $40 is used
by F, $50 is used by C, $60 is used by T, and the remainder of $100 is used by the consumer.
The other rows are described in a similar manner.
Find the proportion of the amounts consumed by each of the industries. In other words, find
the matrix A.
Once again, the total input equals the total output.
or
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Chapter 2: Matrices 63
LEONTIEF'S MODELS
THE CLOSED MODEL
1. All consumption is within the industries. There is no external demand.
2. Input = Output
3. X = AX or (I – A)X = 0
THE OPEN MODEL
1. In addition to internal consumption, there is an outside demand by the consumer.
2. Input = Output
3. X = AX + D or X = (I – A)–1 D
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Name:_________________________________ CHAPTER 2 PROBLEMS SETS
3) Chris and Ed decide to help each other by doing repairs on each others houses. Chris is a carpenter, and Ed
is an electrician. Chris does carpentry work on his house as well as on Ed's house. Similarly, Ed does
electrical repairs on his house and on Chris' house. When they are all finished they realize that Chris spent
60% of his time on his own house, and 40% of his time on Ed's house. On the other hand Ed spent half of
his time on his house and half on Chris's house. If they originally agreed that each should get about a $1000
for their work, how much money should each get for their work?
4) Chris, Ed, and Paul decide to help each other by doing repairs on each others houses. Chris is a carpenter,
Ed is an electrician, and Paul is a plumber. Each does work on his own house as well as on the others houses.
When they are all finished they realize that Chris spent 30% of his time on his own house, 40% of his time
on Ed's house, and 30% on Paul's house. Ed spent half of his time on his own house, 30% on Chris' house,
and remaining on Paul's house. Paul spent 40% of the time on his own house, 40% on Chris' house, and 20%
on Ed's house. If they originally agreed that each should get about a $1000 for their work, how much money
should each get for their work?
5) Given the internal consumption matrix A, and the external demand matrix D as follows.
6) Given the internal consumption matrix A, and the external demand matrix D as follows.
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CHAPTER 2 PROBLEMS SETS Name:_________________________________
7) An economy has two industries, farming and building. For every $1 of food produced, the farmer uses $.20
and the builder uses $.15. For every $1 worth of building, the builder uses $.25 and the farmer uses $.20. If
the external demand for food is $100,000, and for building $200,000, what should be the total production for
each industry in dollars?
8) An economy has three industries, farming, building, and clothing. For every $1 of food produced, the farmer
uses $.20, the builder uses $.15, and the tailor $.05. For every $1 worth of building, the builder uses $.25, the
farmer uses $.20, and the tailor $.10. For every $1 worth of clothing, the tailor uses $.10, the builder uses
$.20, the farmer uses $.15. If the external demand for food is $100 million, for building $200 million, and for
clothing $300 million, what should be the total production for each in dollars?
9) Suppose an economy consists of three industries F, C, and T. The following table gives information about the
internal use of each industry's production and external demand in dollars.
F C T Demand Tota
l
F 30 10 20 40 100
C 20 30 20 50 120
T 10 10 30 60 110
Find the proportion of the amounts consumed by each of the industries; that is, find the matrix A.
10) If in problem 9, the consumer demand for F, C, and T becomes 60, 80, and 100, respectively, find the total
output and the internal use by each industry to meet that demand.
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Name:_________________________________ CHAPTER 2 PROBLEMS SETS
1) To reinforce her diet, Mrs. Tam bought a bottle containing 30 tablets of Supplement A and a bottle
containing 50 tablets of Supplement B. Each tablet of supplement A contains 1000 mg of calcium, 400 mg of
magnesium, and 15 mg of zinc, and each tablet of supplement B contains 800 mg of calcium, 500 mg of
magnesium, and 20 mg of zinc.
a) Represent the amount of calcium, magnesium and zinc in each tablet as a 2 3 matrix.
c) Use matrix multiplication to determine the total amount of calcium, magnesium, and zinc in both bottles.
1 –1 3 3 3 –1
2) Let matrix A = 3 –2 1 and B= 1 4 –3 . Find the following.
1
a) 2 (A + B) b) 3A – 2B
1 1 -1 2 -3 -1
3) Let matrix C = 2 1 1 and D = 3 -1 -2 . Find the following.
1 0 1 3 -3 -2
a) 2(C – D) b) C – 3D
1 -1
2 1 –1
4) Let matrix E = 2 3 and F =
1 2 –3 . Find the following.
1 2
a) 2EF b) 3FE
1 –1 3 a b
5) Let matrix G = 3 2 1 and H = c d . Find the following.
e f
a) 2GH b) HG
a) + 3y – 2z = 7 b) 2x – 4y + 4z = 2
x
2x + 7y – 5z = 16 2x + y + 9z = 17
+ 5y – 3z = 10 3x – 2y + 2z = 7
x
7) An apple, a banana and three oranges or two apples, two bananas, and an orange, or four bananas and two
oranges cost $2. Find the price of each.
8) Solve the following systems. If a system has an infinite number of solutions, first express the solution in
parametric form, and then determine one particular solution.
a) + y + z = 6 b) + y + 3z = 4
x x
2x – 3y + 2z = 12 + z = 1
x
3x – 2y + 3z = 18 2x – y = 2
9) Elise has a collection of 12 coins consisting of nickels, dimes and quarters. If the total worth of the coins is
$1.80, how many are there of each? Find all possible solutions.
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CHAPTER 2 PROBLEMS SETS Name:_________________________________
10) Solve the following systems. If a system has an infinite number of solutions, first express the solution in
parametric form, and then find a particular solution.
a) + 2y = 4 b) – 2y + 2z = 1
x x
2x + 4y = 8 2x – 3y + 5z = 4
3x + 6y – 3z = 3
11) Solve the following systems. If a system has an infinite number of solutions, first express the solution in
parametric form, and then provide one particular solution.
a) 2x + y – 2z = 0 b) 3x + 4y – 3z = 5
2x + 2y – 3z = 0 2x + 3y – z = 4
6x + 4y – 7z = 0 + 2y + z = 1
x
2 3 1 1 1
a) 3 5 b) 1 2 1
2 3 1
13) Solve the following systems using the matrix inverse method.
a) 2x + 3y + z = 12 b) + 2y – 3z + w = 7
x
+ 2y + z = 9 – z = 4
x x
+ y + z = 5 – 2y + z = 0
x x
y – 2z + w = –1
14) Use matrix A, given below, to encode the following messages. The space between the letters is represented by
the number 27, and all punctuation is ignored.
1 2 0
A= 1 2 1
0 1 0
a) TAKE IT AND RUN. b) GET OUT QUICK.
15) Decode the following messages that were encoded using matrix A in the above problem.
a) 44, 71, 15, 18, 27, 1, 68, 82, 27, 69, 76, 27, 19, 33, 9
b) 37, 64, 15, 36, 54, 15, 67, 75, 20, 59, 66, 27, 39, 43, 12
16) Chris, Bob, and Matt decide to help each other study during the final exams. Chris's favorite subject is
chemistry, Bob loves biology, and Matt knows his math. Each studies his own subject as well as helps the
others learn their subjects. After the finals, they realize that Chris spent 40% of his time studying his own
subject chemistry, 30% of his time helping Bob learn chemistry, and 30% of the time helping Matt learn
chemistry. Bob spent 30% of his time studying his own subject biology, 30% of his time helping Chris learn
biology, and 40% of the time helping Matt learn biology. Matt spent 20% of his time studying his own
subject math, 40% of his time helping Chris learn math, and 40% of the time helping Bob learn math. If they
originally agreed that each should work about 33 hours, how long did each work?
17) As in the previous problem, Chris, Bob, and Matt decide to not only help each other study during the final
exams, but also tutor others to make a little money. Chris spends 30% of his time studying chemistry, 15% of
his time helping Bob with chemistry, and 25% helping Matt with chemistry. Bob spends 25% of his time
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Name:_________________________________ CHAPTER 2 PROBLEMS SETS
studying biology, 15% helping Chris with biology, and 30% helping Matt. Similarly, Matt spends 20% of his
time on his own math, 20% helping Chris, and 20% helping Bob. If they spend respectively, 12, 12, and 10
hours tutoring others, how many total hours are they going to end up working?
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CHAPTER 3
Linear Programming:
A Geometrical Approach
In this chapter, you will learn to:
1. Solve linear programming problems that maximize the objective function.
2. Solve linear programming problems that minimize the objective function.
Example 1 Niki holds two part-time jobs, Job I and Job II. She never wants to work more than a total of
12 hours a week. She has determined that for every hour she works at Job I, she needs 2
hours of preparation time, and for every hour she works at Job II, she needs one hour of
preparation time, and she cannot spend more than 16 hours for preparation. If she makes $40
an hour at Job I, and $30 an hour at Job II, how many hours should she work per week at
each job to maximize her income?
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78 Chapter 3: Linear Programming: A Geometrical Approach
The fact that x and y can never be negative is represented by the following two constraints:
x ≥ 0, and y ≥ 0.
Well, good news! We have formulated the problem. We restate it as
Maximize I = 40x + 30y
Subject to: x + y ≤ 12
2x + y ≤ 16
x ≥ 0; y ≥ 0
In order to solve the problem, we graph the constraints as follows.
Observe that we have shaded the region where all conditions are satisfied. This region is
called the feasibility region or the feasibility polygon.
The Fundamental Theorem of Linear Programming states that the maximum (or
minimum) value of the objective function always takes place at the vertices of the feasibility
region.
Therefore, we will identify all the vertices of the feasibility region. We call these points
critical points. They are listed as (0, 0), (0, 12), (4, 8), (8, 0). To maximize Niki's income,
we will substitute these points in the objective function to see which point gives us the
highest income per week. We list the results below.
Critical points Income
(0, 0) 40(0) + 30(0) = $0
(0, 12) 40(0) + 30(12) = $360
(4, 8) 40(4) + 30(8) = $400
(8,0) 40(8) + 30(0) = $320
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Chapter 3: Linear Programming: A Geometrical Approach 79
Example 2 A factory manufactures two types of gadgets, regular and premium. Each gadget requires the
use of two operations, assembly and finishing, and there are at most 12 hours available for
each operation. A regular gadget requires 1 hour of assembly and 2 hours of finishing, while
a premium gadget needs 2 hours of assembly and 1 hour of finishing. Due to other
restrictions, the company can make at most 7 gadgets a day. If a profit of $20 is realized for
each regular gadget and $30 for a premium gadget, how many of each should be
manufactured to maximize profit?
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80 Chapter 3: Linear Programming: A Geometrical Approach
Again, we have shaded the feasibility region, where all constraints are satisfied.
Since the extreme value of the objective function always takes place at the vertices of the
feasibility region, we identify all the critical points. They are listed as (0, 0), (0, 6), (2, 5),
(5, 2), and (6, 0). To maximize profit, we will substitute these points in the objective function
to see which point gives us the maximum profit each day. The results are listed below.
Critical point Income
(0, 0) 20(0) + 30(0) = $0
(0, 6) 20(0) + 30(6) = $180
(2, 5) 20(2) + 30(5) = $190
(5, 2) 20(5) + 30(2) = $160
(6,0) 20(6) + 30(0) = $120
The point (2, 5) gives the most profit, and that profit is $190. Therefore, we conclude that we
should manufacture 2 regular gadgets and 5 premium gadgets daily for a profit of $190.
Although we are mostly focusing on the standard maximization problems where all
constraints are of the form ax + by ≤ 0, we will now consider an example where that is not the
case.
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Chapter 3: Linear Programming: A Geometrical Approach 81
The five critical points are listed in the above figure. Clearly, the point (2, 2) maximizes the
objective function to a maximum value of 50. The reader should observe that the first
constraint x + y ≥ 1 requires that feasibility region must be bounded below by the line x + y
=1.
Finally, we address an important question. Is it possible to determine the point that gives the
maximum value without calculating the value at each critical point?
The answer is yes.
For example, in the above problem, we substituted the points (0, 0), (0, 6), (2, 5), (5, 2), and
(6, 0), in the objective function P = 20x + 30y, and we got the values $0, $180, $190, $160,
$120, respectively. Sometimes that is not the most efficient way of finding the optimum
solution.
To determine the largest P, we graph P = 20x + 30y for any value P of our choice. Let us
say, we choose P = 60. We graph 20x + 30y = 60. Now we move the line parallel to itself,
that is, keeping the same slope at all times. Since we are moving the line parallel to itself, the
slope is kept the same, and the only thing that is changing is the P. As we move away from
the origin, the value of P increases. The largest value of P is realized when the line touches
the last corner point. The figure below shows the movements of the line, and the optimum
solution is achieved at the point (2, 5). In maximization problems, as the line is being moved
away from the origin, this optimum point is the farthest critical point.
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82 Chapter 3: Linear Programming: A Geometrical Approach
We summarize:
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2) Mr. Tran has $24,000 to invest, some in bonds and the rest in stocks. He has decided that the money invested
in bonds must be at least twice as much as that in stocks. But the money invested in bonds must not be
greater than $18,000. If the bonds earn 6%, and the stocks earn 8%, how much money should he invest in
each to maximize profit?
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3) A factory manufactures chairs and tables, each requiring the use of three operations: Cutting, Assembly, and
Finishing. The first operation can be used at most 40 hours; the second at most 42 hours; and the third at
most 25 hours. A chair requires 1 hour of cutting, 2 hours of assembly, and 1 hour of finishing; a table needs
2 hours of cutting, 1 hour of assembly, and 1 hour of finishing. If the profit is $20 per unit for a chair and
$30 for a table, how many units of each should be manufactured to maximize revenue?
4) The Silly Nut Company makes two mixtures of nuts: Mixture A and Mixture B. A pound of Mixture A
contains 12 oz of peanuts, 3 oz of almonds and 1 oz of cashews and sells for $4. A pound of Mixture B
contains 12 oz of peanuts, 2 oz of almonds and 2 oz of cashews and sells for $5. The company has 1080 lb. of
peanuts, 240 lb. of almonds, 160 lb. of cashews. How many pounds of each of mixtures A and B should the
company make to maximize profit?
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Chapter 3: Linear Programming: A Geometrical Approach 83
Example 1 Professor Symons wishes to employ two students, John and Mary, to grade the homework
papers for his classes. John can mark 20 papers per hour and charges $5 per hour, and Mary
can mark 30 papers per hour and charges $8 per hour. Each student must be employed at
least one hour a week to justify their employment. If Mr. Symons has at least 110 homework
papers to be marked each week, how many hours per week should he employ each student to
minimize his cost?
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84 Chapter 3: Linear Programming: A Geometrical Approach
Again, we have shaded the feasibility region, where all constraints are satisfied.
Since the extreme value of the objective function always takes place at the vertices of the
feasibility region, we identify the two critical points, (1, 3) and (4, 1). To minimize cost, we
will substitute these points in the objective function to see which point gives us the minimum
cost each week. The results are listed below.
Critical points Income
(1, 3) 5(1) + 8(3) = $29
(4, 1) 5(4) + 8(1) = $28
The point (4, 1) gives the least cost, and that cost is $28. Therefore, we conclude that
Professor Symons should employ John 4 hours a week, and Mary 1 hour a week at a cost of
$28 per week.
Example 2 Professor Hamer is on a low cholesterol diet. During lunch at the college cafeteria, he always
chooses between two meals, Pasta or Tofu. The table below lists the amount of protein,
carbohydrates, and vitamins each meal provides along with the amount of cholesterol he is
trying to minimize. Mr. Hamer needs at least 200 grams of protein, 960 grams of
carbohydrates, and 40 grams of vitamins for lunch each month. Over this time period, how
many days should he have the Pasta meal, and how many days the Tofu meal so that he gets
the adequate amount of protein, carbohydrates, and vitamins and at the same time minimizes
his cholesterol intake?
PASTA TOFU
PROTEIN 8g 16g
CARBOHYDRATES 60g 40g
VITAMIN C 2g 2g
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86 Chapter 3: Linear Programming: A Geometrical Approach
Again, we have shaded the unbounded feasibility region, where all constraints are satisfied.
To minimize the objective function, we find the vertices of the feasibility region. These
vertices are (0, 24), (8, 12), (15, 5) and (25, 0). To minimize cholesterol, we will substitute
these points in the objective function to see which point gives us the smallest value. The
results are listed below.
Critical points Income
(0, 24) 60(0) + 50(24) = 1200
(8, 12) 60(8) + 50(12) = 1080
(15, 5) 60(15) + 50(5) = 1150
(25, 0) 60(25) + 50(0) = 1500
The point (8, 12) gives the least cholesterol, which is 1080 mg. This states that for every 20
meals, Professor Hamer should eat Pasta 8 days, and Tofu 12 days.
Although the method of solving minimization problems is similar to that of the maximization
problems, we still feel that we should summarize the steps involved.
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2) A computer store sells two types of computers, desktops and laptops. The supplier demands that at least 150
computers be sold a month. In order to keep profits up, the number of desktops sold must be at least twice of
laptops. The store pays its sales staff a $75 commission for each desk top, and a $50 commission for each lap
top. How many of each type of computers must be sold to minimize commission to its sales people? What is
the minimum commission?
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3) An oil company has two refineries. Each day, Refinery A produces 200 barrels of high-grade oil, 300 barrels
of medium-grade oil, and 200 barrels of low-grade oil and costs $12,000 to operate. Each day, Refinery B
produces 100 barrels of high-grade oil, 100 barrels of medium-grade oil, and 200 barrels of low-grade oil and
costs $10,000 to operate. The company must produce at least 800 barrels of high-grade oil, 900 barrels of
medium-grade oil, and 1,000 barrels of low-grade oil. How many days should each refinery be operated to
meet the goals at a minimum cost?
4) A print shop at a community college in Cupertino, California, employs two different contractors to maintain
its copying machines. The print shop needs to have 12 IBM, 18 Xerox, and 20 Canon copying machines
serviced. Contractor A can repair 2 IBM, 1 Xerox, and 2 Canon machines at a cost of $800 per month,
while Contractor B can repair 1 IBM, 3 Xerox, and 2 Canon machines at a cost of $1000 per month. How
many months should each of the two contractors be employed to minimize the cost?
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1) Mr. Shoemacher has $20,000 to invest in two types of mutual funds, Coleman High-yield Fund, and Coleman
Equity Fund. The High-yield fund gives an annual yield of 12%, while the Equity fund earns 8%. Mr.
Shoemacher would like to invest at least $3000 in the High-yield fund and at least $4000 in the Equity fund.
How much money should he invest in each to maximize his annual yield, and what is the maximum yield?
2) Dr. Lum teaches part-time at two different community colleges, Hilltop College and Serra College. Dr. Lum
can teach up to 5 classes per semester. For every class taught by him at Hilltop College, he needs to spend 3
hours per week preparing lessons and grading papers, and for each class at Serra College, he must do 4 hours
of work per week. He has determined that he cannot spend more than 18 hours per week preparing lessons
and grading papers. If he earns $4,000 per class at Hilltop College and $5,000 per class at Serra College, how
many classes should he teach at each college to maximize his income, and what will be his income?
3) Mr. Shamir employs two part-time typists, Inna and Jim for his typing needs. Inna charges $10 an hour and
can type 6 pages an hour, while Jim charges $12 an hour and can type 8 pages per hour. Each typist must be
employed at least 8 hours per week to keep them on the payroll. If Mr. Shamir has at least 208 pages to be
typed, how many hours per week should he employ each student to minimize his typing costs, and what will
be the total cost?
4) Mr. Boutros wants to invest up to $20,000 in two stocks, Cal Computers and Texas Tools. The Cal
Computers stock is expected to yield a 16% annual return, while the Texas Tools stock promises a 12% yield.
Mr. Boutros would like to earn at least $2,880 this year. According to Value Line Magazine's safety index (1
highest to 5 lowest), Cal Computers has a safety number of 3 and Texas Tools has a safety number of 2. How
much money should he invest in each to minimize the safety number? Note: A lower safety number means
less risk.
5) A department store sells two types of televisions: Regular and Big Screen. The store can sell up to 90 sets a
month. A Regular television requires 6 cubic feet of storage space, and a Big Screen television requires 18
cubic feet of space, and a maximum of 1080 cubic feet of storage space is available. The Regular and Big
Screen televisions take up, respectively, 2 and 3 sales hours of labor, and a maximum of 198 hours of labor is
available. If the profit made from each of these types is $60 and $80, respectively, how many of each type of
television should be sold to maximize profit, and what is the maximum profit?
6) A company manufactures two types of printers, the Inkjet and the Laser. The Inkjet generates a profit of
$100 per printer and the Laser a profit of $150. On the assembly line the Inkjet requires 7 hours, while the
Laser takes 11 hours. Both printers require one hour for testing. The Inkjet requires one hour and the Laser
needs 3 hours for finishing. On a particular production run the company has available 1,540 work hours on
the assembly line, 200 work hours in the testing department, and 360 work hours for finishing. How many
sets of each type should the company produce to maximize profit, and what is that maximum profit?
7) John wishes to choose a combination of two types of cereals for breakfast - Cereal A and Cereal B. A small
box(one serving) of Cereal A costs $0.50 and contains 10 units of vitamins, 5 units of minerals, and 15
calories. A small box(one serving) of Cereal B costs $0.40 and contains 5 units of vitamins, 10 units of
minerals, and 15 calories. John wants to buy enough boxes to have at least 500 units of vitamins, 600 units of
minerals, and 1200 calories. How many boxes of each food should he buy to minimize his cost, and what is
the minimum cost?
8) Jessica needs at least 60 units of vitamin A, 40 units of vitamin B, and 140 units of vitamin C each week.
She can choose between Costless brand or Savemore brand tablets. A Costless tablet costs 5 cents and
contains 3 units of vitamin A, 1 unit of vitamin B, and 2 units of vitamin C, and a Savemore tablet costs 7
cents and contains 1 unit of A, 1 of B, and 5 of C. How many tablets of each kind should she buy to
minimize cost, and what is the minimum cost?
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9) A small company manufactures two types of radios- regular and short-wave. The manufacturing of each
radio requires three operations: Assembly, Finishing and Testing. The regular radios require 1 hour of
Assembly, 3 hours of Finishing, and 1 hour of Testing. The short-wave radios require 3 hours of Assembly, 1
hour of Finishing, and 1 hour of Testing. The total work-hours available per week in the Assembly division
is 60, in the Finishing division is 60, and in the Testing is 24. If a profit of $50 is realized for every regular
radio, and $75 for every short-wave radio, how many of each should be manufactured to maximize profit, and
what is the maximum profit?
10) A factory manufactures two products, A and B. Each product requires the use of three machines, Machine I,
Machine II, and Machine III. The time requirements and total hours available on each machine are listed
below.
If product A generates a profit of $60 per unit and product B a profit of $50 per unit, how many units of each
product should be manufactured to maximize profit, and what is the maximum profit?
11) A company produces three types of shoes, formal, casual, and athletic, at its two factories, Factory I and
Factory II. Daily production of each factory for each type of shoe is listed below.
Factory I Factory II
Formal 100 100
Casual 100 200
Athletic 300 100
The company must produce at least 6000 pairs of formal shoes, 8000 pairs of casual shoes, and 9000 pairs of
athletic shoes. If the cost of operating Factory I is $1500 per day and the cost of operating Factory II is
$2000, how many days should each factory operate to complete the order at a minimum cost, and what is the
minimum cost?
12) A professor gives two types of quizzes, objective and recall. He is planning to give at least 15 quizzes this
quarter. The student preparation time for an objective quiz is 15 minutes and for a recall quiz 30 minutes.
The professor would like a student to spend at least 5 hours (300 minutes) preparing for these quizzes above
and beyond the normal study time. The average score on an objective quiz is 7, and on a recall type 5, and
the professor would like the students to score at least 85 points on all quizzes. It takes the professor one
minute to grade an objective quiz, and 1.5 minutes to grade a recall type quiz. How many of each type should
he give in order to minimize his grading time?
13) A company makes two mixtures of nuts: Mixture A and Mixture B. Mixture A contains 30% peanuts, 30%
almonds and 40% cashews and sells for $5 per pound. Mixture B contains 30% peanuts, 60% almonds and
10% cashews and sells for $3 a pound. The company has 540 pounds of peanuts, 900 pounds of almonds,
480 pounds of cashews. How many pounds of each of mixtures A and B should the company make to
maximize profit, and what is the maximum profit?
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CHAPTER 4
Linear Programming:
The Simplex Method
In this chapter, you will learn to:
1. Solve linear programming maximization problems using the simplex method.
2. Solve the minimization problems using the simplex method.
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94 Chapter 4: Linear Programming: The Simplex Method
7. When there are no more negative entries in the bottom row, we are
finished; otherwise, we start again from step 4.
Example 1 Niki holds two part-time jobs, Job I and Job II. She never wants to work more than a total of
12 hours a week. She has determined that for every hour she works at Job I, she needs 2
hours of preparation time, and for every hour she works at Job II, she needs one hour of
preparation time, and she cannot spend more than 16 hours for preparation. If she makes $40
an hour at Job I, and $30 an hour at Job II, how many hours should she work per week at
each job to maximize her income?
Solution: In solving this problem, we will follow the algorithm listed above.
1. Set up the problem. That is, write the objective function and the constraints.
Since the simplex method is used for problems that consist of many variables, it is not
practical to use the variables x, y, z etc. We use the symbols x1, x2, x3, and so on.
Let x1 = The number of hours per week Niki will work at Job I.
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Chapter 4: Linear Programming: The Simplex Method 95
and x2 = The number of hours per week Niki will work at Job II.
It is customary to choose the variable that is to be maximized as Z.
The problem is formulated the same way as we did in the last chapter.
Maximize Z = 40x1 + 30x2
Subject to: x1 + x2 ≤ 12
2x1 + x2 ≤ 16
x1 ≥ 0; x2 ≥ 0
2. Convert the inequalities into equations. This is done by adding one slack variable for
each inequality.
For example to convert the inequality x1 + x2 ≤ 12 into an equation, we add a non-negative
variable y1, and we get
x1 + x2 + y1 = 12
Here the variable y1 picks up the slack, and it represents the amount by which x1 + x2 falls
short of 12. In this problem, if Niki works fewer that 12 hours, say 10, then y1 is 2. Later
when we read off the final solution from the simplex table, the values of the slack variables
will identify the unused amounts.
We can even rewrite the objective function Z = 40x1 + 30x2 as – 40x1 – 30x2 + Z = 0.
After adding the slack variables, our problem reads
Objective function: – 40x1 – 30x2 + Z = 0
Subject to constraints: x1 + x2 + y1 = 12
2x1 + x2 + y2 = 16
x1 ≥ 0; x2 ≥ 0
3. Construct the initial simplex tableau. Write the objective function as the bottom row.
Now that the inequalities are converted into equations, we can represent the problem into an
augmented matrix called the initial simplex tableau as follows.
x1 x2 y1 y2 Z C
1 1 1 0 0 12
2 1 0 1 0 16
–40 –30 0 0 1 0
Here the vertical line separates the left hand side of the equations from the right side. The
horizontal line separates the constraints from the objective function. The right side of the
equation is represented by the column C.
The reader needs to observe that the last four columns of this matrix look like the final matrix
for the solution of a system of equations. If we arbitrarily choose x1 = 0 and x2 = 0, we get
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96 Chapter 4: Linear Programming: The Simplex Method
y1 y2 Z | C
1 0 0 | 12
0 1 0 | 16
0 0 1 | 0
Which reads
y1 = 12
y2 = 16
Z =0
The solution obtained by arbitrarily assigning values to some variables and then solving for
the remaining variables is called the basic solution associated with the tableau. So the above
solution is the basic solution associated with the initial simplex tableau. We can label the
basic solution variable in the right of the last column as shown in the table below.
x1 x2 y1 y2 Z
1 1 1 0 0 12 y1
2 1 0 1 0 16 y2
–40 –30 0 0 1 0 Z
4. The most negative entry in the bottom row identifies a column.
The most negative entry in the bottom row is –40, therefore the column 1 is identified.
x1 x2 y1 y2 Z
1 1 1 0 0 12 y1
2 1 0 1 0 16 y2
–40 –30 0 0 1 0 Z
Question Why do we choose the most negative entry in the bottom row?
Answer The most negative entry in the bottom row represents the largest coefficient in the objective
function – the coefficient whose entry will increase the value of the objective function the
quickest.
The simplex method begins at a corner point where all the main variables, the variables that
have symbols such as x1, x2, x3 etc., are zero. It then moves from a corner point to the
adjacent corner point always increasing the value of the objective function. In the case of the
objective function Z = 40x1+ 30x2, it will make more sense to increase the value of x1 rather
than x2. The variable x1 represents the number of hours per week Niki works at Job I.
Since Job I pays $40 per hour as opposed to Job II which pays only $30, the variable x1 will
increase the objective function by $40 for a unit of increase in the variable x1.
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5. Calculate the quotients. The smallest quotient identifies a row. The element in the
intersection of the column identified in step 4 and the row identified in this step is
identified as the pivot element.
As mentioned in the algorithm, in order to calculate the quotient, we divide the entries in the
far right column by the entries in column 1, excluding the entry in the bottom row.
x1 x2 y1 y2 Z
1 1 1 0 0 12 y1 12 ÷ 1 = 12
2 1 0 1 0 16 y2 16 ÷ 2 = 8
–40 –30 0 0 1 0 Z
The smallest of the two quotients, 12 and 8, is 8. Therefore row 2 is identified. The
intersection of column 1 and row 2 is the entry 2, which has been highlighted. This is our
pivot element.
Question Why do we find quotients, and why does the smallest quotient identify a row?
Answer When we choose the most negative entry in the bottom row, we are trying to increase the
value of the objective function by bringing in the variable x1. But we cannot choose any
value for x1. Can we let x1 = 100? Definitely not! That is because Niki never wants to
work for more than 12 hours at both jobs combined. In other words, x1 + x2 ≤ 12. Now
can we let x1 = 12? Again, the answer is no because the preparation time for Job I is two
times the time spent on the job. Since Niki never wants to spend more than 16 hours for
preparation, the maximum time she can work is 16 ÷ 2 = 8. Now you see the purpose of
computing the quotients.
Answer As we have mentioned earlier, the simplex method begins with a corner point and then moves
to the next corner point always improving the value of the objective function. The value of
the objective function is improved by changing the number of units of the variables. We may
add the number of units of one variable, while throwing away the units of another. Pivoting
allows us to do just that.
The variable whose units are being added is called the entering variable, and the variable
whose units are being replaced is called the departing variable. The entering variable in the
above table is x1, and it was identified by the most negative entry in the bottom row. The
departing variable y2 was identified by the lowest of all quotients.
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x1 x2 y1 y2 Z
1 1 1 0 0 12
1 1/2 0 1/2 0 8
–40 –30 0 0 1 0
To obtain a zero in the entry first above the pivot element, we multiply the second row by –1
and add it to row 1. We get
x1 x2 y1 y2 Z
0 1/2 1 –1/2 0 4
1 1/2 0 1/2 0 8
–40 –30 0 0 1 0
To obtain a zero in the element below the pivot, we multiply the second row by 40 and add it
to the last row.
x1 x2 y1 y2 Z
0 1/2 1 –1/2 0 4 y1
1 1/2 0 1/2 0 8 x1
0 –10 0 20 1 320 Z
We now determine the basic solution associated with this tableau. By arbitrarily choosing
x2 = 0 and y2 = 0, we obtain x1 = 8, y1 = 4, and z = 320. If we write the augmented matrix,
whose left side is a matrix with columns that have one 1 and all other entries zeros, we get the
following matrix stating the same thing.
x1 y1 Z | C
0 1 0 | 4
1 0 0 | 8
0 0 1 | 320
We can restate the solution associated with this matrix as x1 = 8, x2 = 0, y1 = 4, y2 = 0 and z
= 320. At this stage of the game, it reads that if Niki works 8 hours at Job I, and no hours at
Job II, her profit Z will be $320. Recall from Example 1 in section 3.1 that (8, 0) was one of
our corner points. Here y1 = 4 and y2 = 0 mean that she will be left with 4 hours of working
time and no preparation time.
7. When there are no more negative entries in the bottom row, we are finished;
otherwise, we start again from step 4.
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Chapter 4: Linear Programming: The Simplex Method 99
Since there is still a negative entry, –10, in the bottom row, we need to begin, again, from
step 4. This time we will not repeat the details of every step, instead, we will identify the
column and row that give us the pivot element, and highlight the pivot element. The result is
as follows.
x1 x2 y1 y2 Z
0 1/2 1 –1/2 0 4 y1 4 ÷ 1/2 = 8
1 1/2 0 1/2 0 8 x1 8 ÷ 1/2 =
16
0 –10 0 20 1 320 Z
x1 x2 y1 y2 Z
0 1 2 –1 0 8
1 1/2 0 1/2 0 8
0 –10 0 20 1 320
Now to make all other entries as zeros in this column, we first multiply row 1 by –1/2 and add
it to row 2, and then multiply row 1 by 10 and add it to the bottom row.
x1 x2 y1 y2 Z
0 1 2 –1 0 8 x2
1 0 –1 1 0 4 x1
0 0 20 10 1 400 Z
We no longer have negative entries in the bottom row, therefore we are finished.
Question Why are we finished when there are no negative entries in the bottom row?
Answer The answer lies in the bottom row. The bottom row corresponds to the following equation.
0x1 + 0x2+ 20y1 + 10y2 + Z = 400 or
Z = 400 - 20y1 - 10y2
Since all variables are non-negative, the highest value Z can ever achieve is 400, and that will
happen only when y1 and y2 are zero.
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100 Chapter 4: Linear Programming: The Simplex Method
We now read off our answers, that is, we determine the basic solution associated with the
final simplex tableau. Again, we look at the columns that have a 1 and all other entries zeros.
Since the columns labeled y1 and y2 are not such columns, we arbitrarily choose y1 = 0, and
y2 = 0, and we get
x1 x2 Z | C
0 1 0 | 8
1 0 0 | 4
0 0 1 | 400
The matrix reads x1 = 4 , x2= 8 and z = 400.
The final solution says that if Niki works 4 hours at Job I and 8 hours at Job II, she will
maximize her income to $400. Since both slack variables are zero, it means that she would
have used up all the working time, as well as the preparation time, and none will be left.
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2) Maximize z = x1 + 2x2 + x3
subject to x1 + x 2 3
x2 + x3 4
x1 + x3 5
x1, x2, x3 0
3) A farmer has 100 acres of land on which she plans to grow wheat and corn. Each acre of wheat requires 4
hours of labor and $20 of capital, and each acre of corn requires 16 hours of labor and $40 of capital. The
farmer has at most 800 hours of labor and $2400 of capital available. If the profit from an acre of wheat is
$80 and from an acre of corn is $100, how many acres of each crop should she plant to maximize her profit?
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4) A factory manufactures chairs, tables and bookcases each requiring the use of three operations: Cutting,
Assembly, and Finishing. The first operation can be used at most 600 hours; the second at most 500 hours;
and the third at most 300 hours. A chair requires 1 hour of cutting, 1 hour of assembly, and 1 hour of
finishing; a table needs 1 hour of cutting, 2 hours of assembly, and 1 hour of finishing; and a bookcase
requires 3 hours of cutting, 1 hour of assembly, and 1 hour of finishing. If the profit is $20 per unit for a
chair, $30 for a table, and $25 for a bookcase, how many units of each should be manufactured to maximize
profit?
5). The Acme Apple company sells its Pippin, Macintosh, and Fuji apples in mixes. Box I contains 4 apples of
each kind; Box II contains 6 Pippin, 3 Macintosh, and 3 Fuji; and Box III contains no Pippin, 8 Macintosh
and 4 Fuji apples. At the end of the season, the company has altogether 2800 Pippin, 2200 Macintosh, and
2300 Fuji apples left. Determine the maximum number of boxes that the company can make.
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Chapter 4: Linear Programming: The Simplex Method 101
Solution: To achieve our goal, we first express our problem as the following matrix.
1 2 40
1 1 30
12 16 0
Observe that this table looks like an initial simplex tableau without the slack variables. Next,
we write a matrix whose columns are the rows of this matrix, and the rows are the columns.
Such a matrix is called a transpose of the original matrix. We get
1 1 12
2 1 16
40 30 0
The following maximization problem associated with the above matrix is called its dual.
Maximize Z = 40y1 + 30y2
Subject to: y1 + y2 ≤ 12
2y1 + y2 ≤ 16
y1 ≥ 0; y2 ≥ 0
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We have chosen the variables as y's, instead of x's, to distinguish the two problems.
Example 2 Solve graphically both the minimization problem and its dual, the maximization problem.
We have plotted the graph, shaded the feasibility region, and labeled the corner points. The
corner point (20, 10) gives the lowest value for the objective function and that value is 400.
Now its dual.
Maximize Z = 40y1 + 30y2
Subject to: y1 + y2 ≤ 12
2y1 + y2 ≤ 16
y1 ≥ 0; y2 ≥ 0
We graph the inequalities.
Again, we have plotted the graph, shaded the feasibility region, and labeled the corner points.
The corner point (4, 8) gives the highest value for the objective function, with a value of 400.
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Chapter 4: Linear Programming: The Simplex Method 103
The reader may recognize that this problem is the same as Example 1, in section 3.1. This is
also the same problem as Example 1 in section 4.1, where we solved it by the simplex method.
We observe that the minimum value of the minimization problem is the same as the
maximum value of the maximization problem; they are both 400. This is not a coincident.
We state the duality principle.
The Duality Principle: The objective function of the minimization problem reaches its minimum
if and only if the objective function of its dual reaches its maximum. And when they do, they
are equal.
Our next goal is to extract the solution for our minimization problem from the corresponding
dual. To do this, we solve the dual by the simplex method.
Example 3 Find the solution to the minimization problem in Example 1 by solving its dual using the
simplex method. We rewrite our problem.
Minimize Z = 12x1 + 16x2
Subject to: x1 + 2x2 ≥ 40
x1 + x2 ≥ 30
x1 ≥ 0; x2 ≥ 0
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104 Chapter 4: Linear Programming: The Simplex Method
0 0 20 10 1 400
A closer look at this table reveals that the x1 and x2 values along with the minimum value for
the minimization problem can be obtained from the last row of the final tableau. We have
highlighted these values by the arrows.
We restate the solution as follows:
The minimization problem has a minimum value of 400 at the corner point (20, 10).
We now summarize our discussion so far.
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CHAPTER 4 PROBLEM SETS Name:_________________________________
In problems 3-4, convert each minimization problem into a maximization problem, the dual, and then solve by the
simplex method.
3) Minimize z = 4x1 + 3x2
subject to x 1 + x2 10
3x1 + 2x2 24
x1, x2 0
4) A diet is to contain at least 8 units of vitamins, 9 units of minerals, and 10 calories. Three foods, Food A,
Food B, and Food C are to be purchased. Each unit of Food A provides 1 unit of vitamins, 1 unit of minerals,
and 2 calories. Each unit of Food B provides 2 units of vitamins, 1 unit of minerals, and 1 calorie. Each
unit of Food C provides 2 units of vitamins, 1 unit of minerals, and 2 calories. If Food A costs $3 per unit,
Food B costs $2 per unit and Food C costs $3 per unit, how many units of each food should be purchased to
keep costs at a minimum?
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Name:_________________________________ CHAPTER 4 PROBLEM SETS
Solve the following linear programming problems using the simplex method.
subject to x1 + x 2 12
2x1 + x2 16
x1 ≥ 0; x2 ≥ 0
subject to x1 + 2x2 30
3x1 + x2 30
x1 ≥ 0; x2 ≥ 0
subject to x1 + x 2 6
2x1 + x2 8
x1 ≥ 0; x2 ≥ 0
subject to x1 + x2 + 2x3 20
x1 + 2x2 + x3 30
x1, x2, x3 0
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CHAPTER 4 PROBLEM SETS Name:_________________________________
9) A department store sells three different types of televisions: small, medium, and large. The store can sell up
to 200 sets a month. The small, medium, and large televisions require, respectively, 3, 6, and 6 cubic feet of
storage space, and a maximum of 1,020 cubic feet of storage space is available. The three types, small,
medium, and large, take up, respectively, 2, 2, and 4 sales hours of labor, and a maximum of 600 hours of
labor is available. If the profit made from each of these types is $40, $80, and $100, respectively, how many
of each type of television should be sold to maximize profit, and what is the maximum profit?
10) A factory manufactures three products, A, B, and C. Each product requires the use of two machines,
Machine I and Machine II. The total hours available, respectively, on Machine I and Machine II per month
are 180 and 300. The time requirements and profit per unit for each product are listed below.
A B C
Machine I 1 2 2
Machine II 2 2 4
Profit 20 30 40
How many units of each product should be manufactured to maximize profit, and what is the maximum
profit?
11) A company produces three products, A, B, and C, at its two factories, Factory I and Factory II. Daily
production of each factory for each product is listed below.
Factory I Factory II
Product A 10 20
Product B 20 20
Product C 20 10
The company must produce at least 1000 units of product A, 1600 units of B, and 700 units of C. If the cost
of operating Factory I is $4,000 per day and the cost of operating Factory II is $5000, how many days should
each factory operate to complete the order at a minimum cost, and what is the minimum cost?
12) For his classes, Professor Wright gives three types of quizzes, objective, recall, and recall-plus. To keep his
students on their toes, he has decided to give at least 20 quizzes next quarter. The three types, objective,
recall, and recall-plus quizzes, require the students to spend, respectively, 10 minutes, 30 minutes, and 60
minutes for preparation, and Professor Wright would like them to spend at least 12 hours(720 minutes)
preparing for these quizzes above and beyond the normal study time. An average score on an objective quiz
is 5, on a recall type 6, and on a recall-plus 7, and Dr. Wright would like the students to score at least 130
points on all quizzes. It takes the professor one minute to grade an objective quiz, 2 minutes to grade a recall
type quiz, and 3 minutes to grade a recall-plus quiz. How many of each type should he give in order to
minimize his grading time?
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CHAPTER 5
Mathematics Of Finance
In this chapter, you will learn to:
1. Solve financial problems that involve simple interest.
2. Solve problems involving compound interest.
3. Find the future value of an annuity, and the amount of payments to a sinking fund.
4. Find the present value of an annuity, and an installment payment on a loan.
SIMPLE INTEREST
If an amount P is borrowed for a time t at an interest rate of r per time period, then
the simple interest is given by
I = P. r . t
The total amount A also called the accumulated value or the future value is given by
A = P + I = P + Prt
or A = P(1 + rt)
Where interest rate r is expressed in decimals.
Example 1 Ursula borrows $600 for 5 months at a simple interest rate of 15% per year. Find the interest,
and the total amount she is obligated to pay?
Solution: The interest is computed by multiplying the principal with the interest rate and the time.
I = Prt
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112 Chapter 5: Mathematics Of Finance
5
I = $600(.15) 12
= $37.50
The total amount is
A = $600 + $37.50
= $637.50
Incidentally, the total amount can be computed directly as
A = P(1 + rt)
= $600[1 + (.15)(5/12)]
= $600(1 + .0625)
= $637.50
Example 2 Jose deposited $2500 in an account that pays 6% simple interest. How much money will he
have at the end of 3 years?
Solution: The total amount or the future value is given by A = P(1 + rt).
A = $2500[1 + (.06)(3)]
= $2950
Example 3 Darnel owes a total of $3060 which includes 12% interest for the three years he borrowed the
money. How much did he originally borrow?
$3060 = P(1.36)
$3060
1.36 = P
$2250 = P
Example 4 A Visa credit card company charges a 1.5% finance charge each month on the unpaid
balance. If Martha owes $2350 and has not paid her bill for three months, how much does
she owe?
Solution: Before we attempt the problem, the reader should note that in this problem the rate of finance
charge is given per month and not per year.
The total amount Martha owes is the previous unpaid balance plus the finance charge.
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Chapter 5: Mathematics Of Finance 113
A = $2350 + $2350(.015)(3)
= $2350 + $105.75
= $2455.75
Once again, we can compute the amount directly by using the formula A = P(1 + rt)
A = $2350[1 + (.015)(3)]
= $2350(1.045)
= $2455.75
Example 5 Francisco borrows $1200 for 10 months at a simple interest rate of 15% per year. Determine
the discount and the proceeds.
Solution: The discount D is the interest on the loan that the bank deducts from the loan amount.
D = Mrt
10
D = $1200(.15)(12 )
= $150
Therefore, the bank deducts $150 from the maturity value of $1200, and gives Francisco
$1050. Francisco is obligated to repay the bank $1200.
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114 Chapter 5: Mathematics Of Finance
In this case, the discount D = $150, and the proceeds P = $1200 – $150 = $1050.
Example 6 If Francisco wants to receive $1200 for 10 months at a simple interest rate of 15% per year,
what amount of loan should he apply for?
Solution: In this problem, we are given the proceeds P and are being asked to find the maturity value
M.
We have P = $1200, r = .15, t = 10/12 . We need to find M.
We know
P=M–D
but
D = Mrt
therefore
P = M – Mrt
P = M(1 – rt)
10
$1200 = M[1 – (.15)(12 )]
$1200
.875 = M
$1371.43 = M
Therefore, Francisco should ask for a loan for $1371.43.
The bank will discount $171.43 and Francisco will receive $1200.
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Name:_________________________________ CHAPTER 5 PROBLEM SETS
1) If an amount of $2,000 is borrowed at a simple 2) You borrow $4,500 for six months at a simple
interest rate of 10% for 3 years, how much is the interest rate of 8%. How much is the interest?
interest?
3) John borrows $2400 for 3 years at 9% simple 4) Jessica takes a loan of $800 for 4 months at 12%
interest. How much will he owe at the end of 3 simple interest. How much does she owe at the end
years? of the 4-month period?
5) If an amount of $2,160, which includes a 10% 6) Jamie just paid off a loan of $2,544, the principal
simple interest for 2 years, is paid back, how much and simple interest. If he took out the loan six
was borrowed 2 years earlier? months ago at 12% simple interest, what was the
amount borrowed?
7) Shanti charged $800 on her charge card and did not 8) A credit card company charges 18% interest on the
make a payment for six months. If there is a unpaid balance. If you owed $2000 three months
monthly charge of 1.5%, how much does she owe? ago and have been delinquent since, how much do
you owe?
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CHAPTER 5 PROBLEM SETS Name:_________________________________
9) An amount of $2000 is borrowed for 3 years. At 10) Nancy borrowed $1,800 and paid back $1,920, four
the end of the three years, $2660 is paid back. months later. What was the simple interest rate?
What was the simple interest rate?
11) Jose agrees to pay $2,000 in one year at an interest 12) Tasha signs a note for a discounted loan agreeing to
rate of 12%. The bank subtracts the discount of pay $1200 in 8 months at an 18% discount rate.
12% of $2,000, and gives the rest to Jose. Find the Determine the amount of the discount and the
amount of the discount and the proceeds to Jose. proceeds to her.
13) An amount of $8,000 is borrowed at a discount rate 14) An amount of $4,000 is borrowed at a discount rate
of 12%, find the proceeds if the length of the loan is of 10%, find the proceeds if the length of the loan is
7 months. 180 days.
15) Derek needs $2400 new equipment for his shop. 16) Mary owes June $750, and wants to pay her off.
He can borrow this money at a discount rate of 14% She decides to borrow the amount from her bank at
for a year. Find the amount of the loan he should a discount rate of 16%. If she borrows the money
ask for so that his proceeds are $2400. for 10 months, find the amount of the loan she
should ask for so that her proceeds are $750?
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Chapter 5: Mathematics Of Finance 115
In the last section, we did problems involving simple interest. Simple interest is charged
when the lending period is short and often less than a year. When the money is loaned or
borrowed for a longer time period, the interest is paid(or charged) not only on the principal,
but also on the past interest, and we say the interest is compounded.
Suppose we deposit $200 in an account that pays 8% interest. At the end of one year, we will
have $200 + $200(.08) = $200(1 + .08) = $216.
Now suppose we put this amount, $216, in the same account. After another year, we will
have $216 + $216(.08) = $216(1 + .08) = $233.28.
So an initial deposit of $200 has accumulated to $233.28 in two years. Further note that had
it been simple interest, this amount would have accumulated to only $232. The reason the
amount is slightly higher is because the interest ($16) we earned the first year, was put back
into the account. And this $16 amount itself earned for one year an interest of $16(.08) =
$1.28, thus resulting in the increase. So we have earned interest on the principal as well as on
the past interest, and that is why we call it compound interest.
Now suppose we leave this amount, $233.28, in the bank for another year, the final amount
will be $233.28 + $233.28(.08) = $233.28(1 + .08) = $251.94.
Now let us look at the mathematical part of this problem so that we can devise an easier way
to solve these problems.
After one year, we had
$200(1 + .08) = $216
After two years, we had
$216(1 + .08)
But $216 = $200(1 + .08), therefore, the above expression becomes
= $233. 28
After three years, we get
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116 Chapter 5: Mathematics Of Finance
$200(1 + .08)3
= $251.94
Suppose we are asked to find the total amount at the end of 5 years, we will get
200(1 + .08)5
= $293.87
We summarize as follows:
Banks often compound interest more than one time a year. Consider a bank that pays 8%
interest but compounds it four times a year, or quarterly. This means that every quarter the
bank will pay an interest equal to one-fourth of 8%, or 2%.
.08
Now if we deposit $200 in the bank, after one quarter we will have $200(1 + 4 ) or $204.
.08
After two quarters, we will have $200(1 + 4 )2 or $208.08.
.08
After one year, we will have $200(1 + 4 )4 or $216.49.
.08
After three years, we will have $200(1 + 4 )12 or $253.65, etc.
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Chapter 5: Mathematics Of Finance 117
.08
The amount after t years $200(1 + 4 )4t
r nt
A = P(1 + n )
Example 1 If $3500 is invested at 9% compounded monthly, what will the future value be in four years?
Solution: Clearly an interest of .09/12 is paid every month for four years. This means that the interest
is compounded 48 times over the four-year period. We get
.09 48
$3500(1 + 12 )
= $5009.92
Example 2 How much should be invested in an account paying 9% compounded daily for it to
accumulate to $5,000 in five years?
Solution: This time we know the future value, but we need to find the principal. Applying the formula
r nt
A = P(1 + n ) , we get
.09 365x 5
$5000 = P(1 + 365 )
$5000 = P(1.568225)
$3188.32 = P
For comparison purposes, the government requires the bank to state their interest rate in terms
of effective yield or effective interest rate.
For example, if one bank advertises its rate as 7.2% compounded monthly, and another bank
advertises its rate as 7.5%, how are we to find out which is better? Let us look at the next
example.
Example 3 If a bank pays 7.2% interest compounded monthly, what is the effective interest rate?
Solution: Suppose we deposit $100 in this bank and leave it for a year, we will get
.072 12
$100(1 + 12 )
= $107.44
Which means we earned an interest of $107.44 – $100 = $7.44
But this interest is for $100, therefore, the effective interest rate is 7.44%.
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Interest can be compounded yearly, semiannually, quarterly, monthly, daily, hourly, minutely,
and even every second. But what do we mean when we say the interest is compounded
continuously, and how do we compute such amounts. When interest is compounded
"infinitely many times", we say that the interest is compounded continuously. Our next
objective is to derive a formula to solve such problems, and at the same time put things in
proper perspective.
Suppose we put $1 in an account that pays 100% interest. If the interest is compounded once
a year, the total amount after one year will be $1(1 + 1) = $2.
If the interest is compounded semiannually, in one year we will have $1(1 + 1/2)2 = $2.25
If the interest is compounded quarterly, in one year we will have $1(1 + 1/4)4 = $2.44, etc.
We show the results as follows:
1 n
In mathematics, we say that as n becomes infinitely large the expression (1 + n ) equals e.
Therefore, it is natural that the number e play a part in continuous compounding. It can be
r nt rt
shown that as n becomes infinitely large the expression (1 + n ) = e .
Example 4 If $3500 is invested at 9% compounded continuously, what will the future value be in four
years?
Solution: Using the formula for the continuous compounding, we get A = Pert.
A = $3500e.09x4
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Chapter 5: Mathematics Of Finance 119
= $3500e.36
= $5016.65
Next we learn a common-sense rule to be able to readily estimate answers to some finance as
well as real-life problems. We consider the following problem.
Example 5 If an amount is invested at 7% compounded continuously, what is the effective interest rate?
Solution: Once again, if we put $1 in the bank at that rate for one year, and subtract that $1 from the
final amount, we will get the interest rate in decimals.
1e.07 – 1
1.0725 – 1
.0725 or 7.25%
Example 6 If an amount is invested at 7%, estimate how long will it take to double.
Solution: Since we are estimating the answer, we really do not care how often the interest is
compounded. Let us say the interest is compounded continuously. Then our problem
becomes
Pe.07t = 2P
We divide both sides by P
e.07t = 2
Now by substituting values by trial and error, we can estimate t to be about 10.
By doing a few similar calculations we can construct a table like the one below.
The Law of 70: The number of years required to double money = 70 ÷ interest rate
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120 Chapter 5: Mathematics Of Finance
It is a good idea to familiarize yourself with the law of 70, as it can help you to estimate many
problems mentally.
Example 7 If the world population doubles every 35 years, what is the growth rate?
35 = 70 ÷ r
r=2
r nt
A = P(1 + n )
2. If a bank pays an interest rate r per year, compounded n times a year, then the
effective interest rate is given by
r n
re = 1(1 + n ) – 1
rt
A = Pe
4. The law of 70 states that
The number of years to double money = 70 ÷ interest rate
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Name:_________________________________ CHAPTER 5 PROBLEM SETS
1) If $8,000 is invested at 9.2% compounded monthly, 2) How much should be invested at 10.3% for it to
what will the final amount be in 4 years? amount to $10,000 in 6 years?
3) Lydia's aunt Rose left her $5,000. Lydia spent 4) Thuy needs $1,850 in eight months for her college
$1,000 on her wardrobe and deposited the rest in an tuition. How much money should she deposit lump
account that pays 6.9% compounded daily. How sum in an account paying 8.2% compounded
much money will she have in 5 years? monthly to achieve that goal?
5) Bank A pays 5% compounded daily, while Bank B 6) EZ Photo Company needs five copying machines in
pays 5.12% compounded monthly. Which bank 2 1/2 years for a total cost of $15,000. How much
pays more? Explain. money should be deposited now to pay for these
machines, if the interest rate is 8% compounded
semiannually?
7) Jon's grandfather was planning to give him $12,000 8) What will be the price of a $20,000 car in 5 years if
in 10 years. Jon has convinced his grandfather to the inflation rate is 6%?
pay him $6,000 now, instead. If Jon invests this
$6,000 at 7.5% compounded continuously, how
much money will he have in 10 years?
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CHAPTER 5 PROBLEM SETS Name:_________________________________
11) The City Library has ordered a new computer 12) Mr. and Mrs. Tran are expecting a baby girl in a
system costing $158,000. The system will be few days. They want to put away money for her
delivered in 6 months, and the full amount will be college education now. How much money should
due 30 days after delivery. How much should be they deposit in an account paying 10.2% so they
deposited today into an account paying 7.5% will have $100,000 in 18 years to pay for their
compounded monthly to have $158,000 in 7 daughter's educational expenses?
months?
13) Find the effective interest rate for an account paying 14) If a bank pays 5.75% compounded monthly, what is
7.2% compounded quarterly. the effective interest rate?
15) Population of California in the year 1995 was 32 16) According to the Law of 70, if an amount grows at
million. If the population grows at a rate of 2%, an annual rate of 1%, then it doubles every seventy
what will the population be in 2025? years. Suppose a bank pays 5% interest, how long
will it take for you to double your money? How
about at 15%?
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Chapter 5: Mathematics Of Finance 121
a[rn – 1]
r–1
We will use this formula to find the value of an annuity.
Consider the following example.
Example 1 If at the end of each month a deposit of $500 is made in an account that pays 8%
compounded monthly, what will the final amount be after five years?
Solution: There are 60 deposits made in this account. The first payment stays in the account for 59
months, the second payment for 58 months, the third for 57 months, and so on.
The first payment of $500 will accumulate to an amount of $500(1 + .08/12)59.
The second payment of $500 will accumulate to an amount of $500(1 + .08/12)58.
The third payment will accumulate to $500(1 + .08/12)57.
And so on.
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122 Chapter 5: Mathematics Of Finance
The last payment is taken out the same time it is made, and will not earn any interest.
To find the total amount in five years, we need to add the accumulated value of these sixty
payments.
In other words, we need to find the sum of the following series.
$500(1 + .08/12)59 + $500(1 + .08/12)58 + $500(1 + .08/12)57 + . . . + $500
Written backwards, we have
$500 + $500(1 + .08/12) + $500(1 + .08/12)2 + . . . + $500(1 + .08/12)59
This is a geometric series with a = $500, r = (1 + .08/12), and n = 59. Therefore the sum is
$500[(1 + .08/12)60 – 1]
.08/12
=$500(73.47686)
= $36738.43
When the payments are made at the end of each period rather than at the beginning, we call it
an ordinary annuity.
m[(1 + r/n)nt – 1]
A = r/n
Example 2 Tanya deposits $300 at the end of each quarter in her savings account. If the account earns
5.75%, how much money will she have in 4 years?
Solution: The future value of this annuity can be found using the above formula.
$300[(1 + .0575/4)16 – 1]
= .0575/4
= $300(17.8463)
= $5353.89
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Chapter 5: Mathematics Of Finance 123
Example 3 Robert needs $5000 in three years. How much should he deposit each month in an account
that pays 8% in order to achieve his goal?
Solution: If Robert saves x dollars per month, after three years he will have
x[(1 + .08/12)36 – 1]
.08/12
But we'd like this amount to be $5,000. Therefore,
x[(1 + .08/12)36 – 1]
.08/12 = $5000
x(40.5356) = $5000
5000
x = 40.5356
x = $123.35
Example 4 A business needs $450,000 in five years. How much should be deposited each quarter in a
sinking fund that earns 9% to have this amount in five years?
Solution: Again, suppose that x dollars are deposited each quarter in the sinking fund. After five years,
the future value of the fund should be $450,000. Which suggests the following relationship:
x[(1 + .09/4)20 – 1]
.09/4 = $450,000
x(24.9115) = 450,000
450000
x = 24.9115
x = 18,063.93
If the payment is made at the beginning of each period, rather than at the end, we call it an
annuity due. The formula for the annuity due can be derived in a similar manner. Reconsider
Example 1, with the change that the deposits be made at the beginning of each month.
Example 5 If at the beginning of each month a deposit of $500 is made in an account that pays 8%
compounded monthly, what will the final amount be after five years?
Solution: There are 60 deposits made in this account. The first payment stays in the account for 60
months, the second payment for 59 months, the third for 58 months, and so on.
The first payment of $500 will accumulate to an amount of $500(1 + .08/12)60.
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124 Chapter 5: Mathematics Of Finance
$500[(1 + .08/12)61 – 1]
.08/12 – $500
=$500(74.9667) – $500
= $37483.35 – $500
= $36983.35
So, in the case of an annuity due, to find the future value, we increase the number of periods
n by 1, and subtract one payment.
m[(1 + r/n)nt+1 – 1]
The Future Value of an Annuity due = r/n – m
Most of the problems we are going to do in this chapter involve ordinary annuity, therefore,
we will down play the significance of the last formula. We mentioned the last formula only
for completeness.
Finally, it is the author's wish that the student learn the concepts in a way that he or she will
not have to memorize every formula. It is for this reason formulas are kept at a minimum.
But before we conclude this section we will once again mention one single equation that will
help us find the future value, as well as the sinking fund payment.
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Chapter 5: Mathematics Of Finance 125
The Equation to Find the Future Value of an Ordinary Annuity, Or the Amount
of Periodic Payment to a Sinking Fund
If a payment of m dollars is made in an account n times a year at an interest r, then the
future value A after t years is
m[(1 + r/n)nt – 1]
A = r/n
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Page 148
Name:_________________________________ CHAPTER 5 PROBLEM SETS
1) Find the future value of an annuity of $200 per 2) How much money should be deposited at the end of
month for 5 years at 6% compounded monthly. each month in an account paying 7.5% for it to
amount to $10,000 in 5 years?
3) At the end of each month Rita deposits $300 in an 4) Mr. Chang wants to retire in 10 years and can save
account that pays 5%. What will the final amount $650 every three months. If the interest rate is
be in 4 years? 7.8%, how much will he have at the end of 5 years?
5) A firm needs to replace most of its machinery in 6) Mrs. Brown needs $5,000 in three years. If the
five years at a cost of $500,000. The company interest rate is 9%, how much should she save at
wishes to create a sinking fund to have this money the end of each month to have that amount in three
available in five years. How much should the years?
quarterly deposits be if the fund earns 8%?
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CHAPTER 5 PROBLEM SETS Name:_________________________________
7) A company has a $120,000 note due in 4 years. 8) You are now 20 years of age and decide to save
How much should be deposited at the end of each $100 at the end of each month until you are 65. If
quarter in a sinking fund to payoff the note in four the interest rate is 9.2%, how much money will you
years if the interest rate is 8%? have when you are 65?
9) Is it better to receive $400 at the beginning of each 10) In order to save money for a new computer Jill
month for six years, or a lump sum of $25,000 decided to save $125 at the beginning of each
today if the interest rate is 7%? Explain. month for the next 8 months. If the interest rate is
7%, how much money will she have at the end of 8
months?
11) Mrs. Gill puts $2200 at the end of each year in her 12) If the inflation rate stays at 6% per year for the next
IRA account that earns 9% per year. How much five years, how much will the price be of a $15,000
total money will she have in this account after 20 car in five years? How much must you save at the
years? end of each month at an interest rate of 7.3% to buy
that car in 5 years?
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126 Chapter 5: Mathematics Of Finance
Example 1 Suppose you have won a lottery that pays $1,000 per month for the next 20 years. But, you
prefer to have the entire amount now. If the interest rate is 8%, how much will you accept?
Solution: This classic present value problem needs our complete attention because the rationalization
we use to solve this problem will be used again in the problems to follow.
Consider for argument purposes that two people Mr. Cash, and Mr. Credit have won the
same lottery of $1,000 per month for the next 20 years. Now, Mr. Credit is happy with his
$1,000 monthly payment, but Mr. Cash wants to have the entire amount now. Our job is to
determine how much Mr. Cash should get. We reason as follows: If Mr. Cash accepts x
dollars, then the x dollars deposited at 8% for 20 years should yield the same amount as the
$1,000 monthly payments for 20 years. In other words, we are comparing the future values
for both Mr. Cash and Mr. Credit, and we would like the future values to equal.
Since Mr. Cash is receiving a lump sum of x dollars, its future value is given by the lump sum
formula we studied in section 5.2, and it is
x(1 + .08/12)240
Since Mr. Credit is receiving a sequence of payments, or an annuity, of $1,000 per month, its
future value is given by the annuity formula we learned in section 5.3. This value is
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Chapter 5: Mathematics Of Finance 127
We have just found the present value of an annuity of $1,000 each month for 20 years at 8%.
We now consider another problem that involves the same logic.
Example 2 Find the monthly payment for a car costing $15,000 if the loan is amortized over five years at
an interest rate of 9%.
$311.38 = x
Therefore, the monthly payment on the loan is $311.38 for five years.
m[(1 + r/n)nt – 1]
P(1 + r/n)nt = r/n
where the amount P is also the loan amount, and m the periodic payment.
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Name:_________________________________ CHAPTER 5 PROBLEM SETS
SECTION 5.4 PROBLEM SET: PRESENT VALUE OF AN ANNUITY AND INSTALLMENT PAYMENT
For the following problems, show all work.
1) Shawn has won a lottery paying him $10,000 per 2) Sonya bought a car for $15,000. Find the monthly
month for the next 20 years. He'd rather have the payment if the loan is to be amortized over 5 years
whole amount in one lump sum today. If the current at a rate of 10.1%.
interest rate is 8.2%, how much money can he hope
to get?
3) You determine that you can afford $250 per month 4) Compute the monthly payment for a house loan of
for a car. What is the maximum amount you can $200,000 to be financed over 30 years at an interest
afford to pay for a car if the interest rate is 9% and rate of 10%.
you want to repay the loan in 5 years?
5) If the $200,000 loan in the previous problem is 6) Friendly Auto offers Jennifer a car for $2000 down
financed over 15 years rather than 30 years at 10%, and $300 per month for 5 years. Jason wants to buy
what will the monthly payment be? the same car but wants to pay cash. How much
must Jason pay if the interest rate is 9.4%?
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7) The Gomez family bought a house for $175,000. 8) Mr. and Mrs. Wong purchased their new house for
They paid 20% down and amortized the rest at $350,000. They made a down payment of 15%, and
11.2% over a 30-year period. Find their monthly amortized the rest over 30 years. If the interest rate
payment. is 9%, find their monthly payment.
9) A firm needs a piece of machinery that has a useful 10) Jackie wants to buy a $19,000 car, but she can
life of 5 years. It has an option of leasing it for afford to pay only $300 per month for 5 years. If
$10,000 a year, or buying it for $40,000 cash. If the interest rate is 6%, how much does she need to
the interest rate is 10%, which choice is better? put down?
11) Vijay's tuition at Stanford for the next year is 12) Glen borrowed $10,000 for his college education at
$32,000. His parents have decided to pay the 8% compounded quarterly. Three years later, after
tuition by making nine monthly payments. If the graduating and finding a job, he decided to start
interest rate is 9%, what is the monthly payment? paying off his loan. If the loan is amortized over
five years at 9%, find his monthly payment for the
next five years.
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Example 1 Mr. Jackson bought his house in 1975, and financed the loan for 30 years at an interest rate of
9.8%. His monthly payment was $1260. In 1995, Mr. Jackson decided to pay off the loan.
Find the balance of the loan he still owes.
Solution: The reader should note that the original amount of the loan is not mentioned in the problem.
That is because we don't need to know that to find the balance.
As for the bank or lender is concerned, Mr. Jackson is obligated to pay $1260 each month for
10 more years. But since Mr. Jackson wants to pay it all off now, we need to find the present
value of the $1260 payments. Using the formula we get,
Example 2 The Orange computer company needs to raise money to expand. It issues a 10-year $1,000
bond that pays $30 every six months. If the current market interest rate is 7%, what is the fair
market value of the bond?
Solution: A bond certificate promises us two things – An amount of $1,000 to be paid in 10 years, and
a semi-annual payment of $30 for ten years. Therefore, to find the fair market value of the
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bond, we need to find the present value of the lump sum of $1,000 we are to receive in 10
years, as well as, the present value of the $30 semi-annual payments for the 10 years.
The present value of the lump-sum $1,000 is
x(1 + .07/2)20 = $1,000
Note that since the interest is paid twice a year, the interest is compounded twice a year.
x(1.9898) = $1,000
x = $502.57
The present value of the $30 semi-annual payments is
Example 3 An amount of $500 is borrowed for 6 months at a rate of 12%. Make an amortization
schedule showing the monthly payment, the monthly interest on the outstanding balance, the
portion of the payment contributing toward reducing the debt, and the outstanding balance.
Solution: The reader can verify that the monthly payment is $86.27.
The first month, the outstanding balance is $500, and therefore, the monthly interest on the
outstanding balance is
(outstanding balance)(the monthly interest rate) = ($500)(.12/12) = $5
This means, the first month, out of the $86.27 payment, $5 goes toward the interest and the
remaining $81.27 toward the balance leaving a new balance of $500 – $81.27 = $418.73.
Similarly, the second month, the outstanding balance is $418.73, and the monthly interest on
the outstanding balance is ($418.73)(.12/12) = $4.19. Again, out of the $86.27 payment,
$4.19 goes toward the interest and the remaining $82.08 toward the balance leaving a new
balance of $418.73 – $82.08 = $336.65. The process continues in the table below.
Payment # Payment Interest Debt Payment Balance
1 $86.27 $5 $81.27 $418.73
2 $86.27 $4.19 $82.08 $336.65
3 $86.27 $3.37 $82.90 $253.75
4 $86.27 $2.54 $83.73 $170.02
5 $86.27 $1.70 $84.57 $85.45
6 $86.27 $0.85 $85.42 $0.03
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Note that the last balance of 3 cents is due to error in rounding off.
Most of the other applications in this section's problem set are reasonably straight forward,
and can be solved by taking a little extra care in interpreting them. And remember, there is
often more than one way to solve a problem.
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1) Find the monthly payment. 2) Find the balance owed after 20 years.
3) Find the balance of the loan after 100 payments. 4) Find the monthly payment if the original loan were
amortized over 15 years.
5) Mr. Patel wants to pay off his car loan. The 6) An amount of $2000 is borrowed for a year at a rate
monthly payment for his car is $365, and he has 16 of 18%. Make an amortization schedule showing
payments left. If the loan was financed at 9%, how the monthly payment, the monthly interest on the
much does he owe? outstanding balance, the portion of the payment
going toward reducing the debt, and the balance.
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7) Fourteen months after Dan bought his new car he 8) You have a choice of either receiving $5,000 at the
lost his job. His car was repossessed by his lender end of each year for the next 5 years or receiving
after he had made only 14 monthly payments of $3000 per year for the next 10 years. If the current
$376 each. If the loan was financed over a 4-year interest rate is 9%, which is better?
period at an interest rate of 10.3%, how much did
the car cost the lender? In other words, how much
did Dan still owe on the car?
9) Mr. Smith is planning to retire in 25 years and 10) Assume Mr. Smith has reached retirement and has
would like to have $250,000 then. What monthly $250,000 in an account which is earning 6.5%. He
payment made at the end of each month to an would now like to make equal monthly withdrawals
account that pays 6.5% will achieve his objective? for the next 15 years to completely deplete this
account. Find the withdrawal payment.
11) A ten-year $1,000 bond pays $35 every six months. 12) Find the fair market value of the ten-year $1,000
If the current interest rate is 8.2%, find the fair bond that pays $35 every six months, if the current
market value of the bond. interest rate has dropped to 6%.
Hint: You must do the following. Hint: Again, you must do the following.
a) Find the present value of $1000. a) Find the present value of $1000.
b) Find the present value of the $35 payments. b) Find the present value of the $35 payments.
c) The fair market value of the bond = a + b c) The fair market value of the bond = a + b
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x[(1 + .09/12)60 – 1]
the future value of Mr. Credit's annuity was .09/12 .
To solve the problem, we set the two expressions equal and solve for x.
The present value of an annuity is found in exactly the same way. For example, suppose Mr.
Credit is told that he can buy a particular car for $311.38 a month for five years, and Mr.
Cash wants to know how much he needs to pay. We are finding the present value of the
annuity of $311.38 per month, which is the same as finding the price of the car. This time our
unknown quantity is the price of the car. Now suppose the price of the car is y, then
the future value of Mr. Cash's lump-sum is y(1 + .09/12)60, and
$311.38[(1 + .09/12)60 – 1]
the future value of Mr. Credit's annuity is .09/12 .
$311.38[(1 + .09/12)60 – 1]
y(1 + .09/12)60 = .09/12
y(1.5657) = ($311.38) (75.4241)
y(1.5657) = $23,485.57
y = $15,000.04
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We now list six problems that form a basis for all finance problems. Further, we classify
these problems and give an equation for the solution.
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Problem 1 If $2,000 is invested at 7% compounded quarterly, what will the final amount be in 5 years?
Problem 2 How much should be invested at 8% compounded yearly, for the final amount to be $5,000 in
five years?
Problem 3 If $200 is invested each month at 8.5% compounded monthly, what will the final amount be
in 4 years?
$200[(1 + .085/12)48 – 1]
Equation: FV = .085/12
Problem 4 How much should be invested each month at 9% for it to accumulate to $8,000 in three
years?
m[(1 + .09/12)36 – 1]
Equation: .09/12 = $8,000
Problem 5 Keith has won a lottery paying him $2,000 per month for the next 10 years. He'd rather have
the entire sum now. If the interest rate is 7.6%, how much should he receive?
$2000[(1 + .076/12)120 – 1]
Equation: PV(1 + .076/12)120 = .076/12
Problem 6 Mr. A has just donated $25,000 to his alma mater. Mr. B would like to donate an equivalent
amount, but would like to pay by monthly payments over a five year period. If the interest
rate is 8.2%, determine the size of the monthly payment?
m[(1 + .082/12)60 – 1]
Equation: .082/12 = $25,000(1 + .082/12)60.
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2) An amount of $4000 is invested at 6% compounded daily. What will the final amount be in 5 years?
3) David has won a lottery paying him $10,000 per month for the next 20 years. He'd rather have the whole
amount in one lump sum now. If the current interest rate is 7%, how much money can he hope to get?
4) Each month Linda deposits $250 in an account that pays 9%. How much money will she have in 4 years?
5) Find the monthly payment for a $15,000 car if the loan is amortized over 4 years at a rate of 10%.
6) What lump-sum deposited in an account paying 7% compounded daily will grow to $10,000 in 5 years?
7) What amount of quarterly payments will amount to $250,000 in 5 years at a rate of 8%?
8) The Chang family bought their house 25 years ago. They had their loan financed for 30 years at an interest
rate of 11% resulting in a payment of $1350 a month. Find the balance of the loan.
9-10)A 10-year $1000 bond pays $35 every six months. If the current interest rate is 8%, in order to find the fair
market value of the bond, we need to find the following.
a) The present value of $1000. b) The present value of the $35 per six month payments.
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11) What lump-sum deposit made today is equal to 33 monthly deposits of $500 if the interest rate is 8%?
12) What should be the size of the monthly deposits made to an account paying 10% so that their accumulated
value will be $10,000 in six years?
13) A department store charges a finance charge of 1.5% per month on the outstanding balance. If Ned charged
$400 three months ago and has not paid his bill, how much does he owe?
14) What will the value of $300 monthly deposits be in 10 years if the account pays 12% compounded monthly?
15) What lump-sum deposited at 6% compounded daily will grow to $2000 in three years?
16) A company buys an apartment complex for $5,000,000 and amortizes the loan over 10 years. What is the
yearly payment if the interest rate is 14%?
17) In 1970, a house in Reno cost $23,000. If the inflation rate is 8%, what is the price of that house in 1997?
18) You determine that you can afford to pay $400 per month for a car. What is the maximum price you can pay
for a car if the interest rate is 11% and you want to repay the loan in 4 years?
19) A business needs $350,000 in 5 years. How much lump-sum should be put aside in an account that pays 9%
so that five years from now the company will have $350,000?
20) A person wishes to have $500,000 in a pension fund 20 years from now. How much should he deposit each
month in an account paying 9% compounded monthly?
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1) Manuel borrows $800 for 6 months at 18% simple interest. How much does he owe at the end of 6 months?
2) The population of California is 32 million and expects to grow at a rate of 2.3% per year for the next 10 years.
What will the population of California be in 10 years?
3) The Gill family is buying a $250,000 house with a 10% down payment. If the loan is financed over a 30 year
period at an interest rate of 9.8%, what is the monthly payment?
4) Find the monthly payment for the house in the above problem if the loan was amortized over 15 years.
5) You look at your budget and decide that you can afford $250 per month for a car. What is the maximum
amount you can afford to pay for the car if the interest rate is 8.6% and you want to finance the loan over 5
years?
6) Mr. Nakahama bought his house in 1980. He had his loan financed for 30 years at an interest rate of 11.2%
resulting in a monthly payment of $1500. In 1997, 17 years later, he paid off the balance of the loan. How
much did he pay?
7) Lisa buys a car for $16,500, and receives $2400 for her old car as a trade-in value. Find the monthly payment
for the balance if the loan is amortized over 5 years at 8.5%.
8) A car is sold for $3000 cash down and $400 per month for the next 4 years. Find the cash value of the car
today if the money is worth 8.3% compounded monthly.
9) An amount of $2300 is borrowed for 7 months at a simple interest rate of 16%. Find the discount and the
proceeds.
10) Marcus has won a lottery paying him $5000 per month for the next 25 years. He'd rather have the whole
amount in one lump sum today. If the current interest rate is 7.3%, how much money can he hope to get?
11) In 1970, an average house in Cupertino cost $41,000. If the average inflation rate for the past years has been
about 9.3%, what is the price of that house in 1997?
12) Find the 'fair market' value of a ten-year $1000 bond which pays $30 every six months if the current interest
rate is 7%. What if the current interest rate is 5%?
13) A Visa credit card company has a finance charge of 1.5% per month ( or 18% per year) on the outstanding
balance. John owed $3200 and has been delinquent for 5 months. How much total does he owe, now?
14) You want to purchase a home for $200,000 with a 30-year mortgage at 9.24% interest. Find a) the monthly
payment and b) the balance owed after 20 years.
15) When Jose bought his car, he amortized his loan over 6 years at a rate of 9.2%, and his monthly payment came
out to be $350 per month. He has been making these payments for the past 40 months and now wants to pay
off the remaining balance. How much does he owe?
16) A lottery pays $10,000 per month for the next 20 years. If the interest rate is 7.8%, find both its present and
future values.
17) A corporation estimates it will need $300,000 in 8 years to replace its existing machinery. How much should
it deposit each quarter in a sinking fund earning 8.4% compounded quarterly to meet this obligation?
18) Our national debt in 1992 was about $4 trillion. If the annual interest rate was 7% then, what was the daily
interest on the national debt?
19) A business must raise $400,000 in 10 years. What should be the size of the owners' monthly payments to a
sinking fund paying 6.5% compounded monthly?
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20) The population of a city of 80,000 is growing at a rate of 3.2% per year. What will the population be at the
end of 10 years?
21) A sum of $5000 is deposited in a bank today. What will the final amount be in 20 months if the bank pays 9%
and the interest is compounded monthly?
22) A computer is sold for $500 cash and $50 per month for the next 3 years. Find the cash value of the computer
today if the money is worth 6.2% compounded monthly.
23) The United States paid about 4 cents an acre for the Louisiana Purchase in 1803. Suppose the value of this
property grew at a rate of 5.5% annually. What would an acre be worth in the year 2000?
24) What amount should be invested per month at 9.1% compounded monthly so that it will become $5000 in 17
months?
25) A machine costs $8000 and has a life of 5 years. It can be leased for $160 per month for 5 years with a cash
down payment of $750. If the current interest rate is 8.3%, is it cheaper to lease or to buy?
26) If inflation holds at 5.2% per year for 5 years, what will be the cost in 5 years of a car that costs $16,000
today? How much will you need to deposit each quarter in a sinking fund earning 8.7% per year to purchase
the new car in 5 years?
27) City Bank pays an interest rate of 6%, while Western Bank pays 5.8% compounded continuously. Which one
is a better deal?
28) Ali has inherited $20,000 and is planning to invest this amount at 7.9% interest. At the same time he wishes to
make equal monthly withdrawals to use up the entire sum in 5 years. How much can he withdraw each
month?
29) Jason has a choice of receiving $300 per month for the next 5 years or $500 per month for the next 3 years.
Which one is worth more if the current interest rate is 7.7%?
30) If a bank pays 6.8% compounded continuously, how long will it take to double your money?
31) Janus Mutual Funds claims a growth rate of 17% per year. If $500 per month is invested, what will the final
amount be in 15 years?
32) Mr. Vasquez has been given two choices for his compensation. He can have $20,000 cash plus $500 per
month for 10 years, or he can receive $12,000 cash plus $1000 per month for 5 years. If the interest rate is
8%, which is the better offer?
33) How much should Mr. Shackley deposit in a trust account so that his daughter can withdraw $400 per month
for 4 years if the interest rate is 8%?
34) Mr. Albers borrowed $425,000 from the bank for his new house at an interest rate of 9%. He will make equal
monthly payments for the next 30 years. How much money will he end up paying the bank over the life of the
loan, and how much is the interest?
35) Mr. Tong puts away $500 per month for 10 years in an account that earns 9.3%. After 10 years, he decides to
withdraw $1,000 per month. If the interest rate stays the same, how long will it take Mr. Tong to deplete the
account?
36) An amount of $5000 is borrowed for 15 months at an interest rate of 9%. Determine the monthly payment and
construct an amortization schedule showing the monthly payment, the monthly interest on the outstanding
balance, the amount of payment contributing towards debt, and the outstanding debt.
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CHAPTER 6
6.1 Sets
In this section, we will familiarize ourselves with set operations and notations, so that we can
apply these concepts to both counting and probability problems. We begin by defining some
terms.
A set is a collection of objects, and its members are called the elements of the set. We name
the set by using capital letters, and enclose its members in braces. Suppose we need to list the
members of the chess club. We use the following set notation.
C = {Ken, Bob, Tran, Shanti, Eric}
A set that has no members is called an empty set The empty set is denoted by the symbol .
Two sets are equal if they have the same elements.
A set A is a subset of a set B if every member of A is also a member of B.
Suppose C = {Al, Bob, Chris, David, Ed} and A = {Bob, David}. Then A is a subset of C,
written as A C.
Every set is a subset of itself, and the empty set is a subset of every set.
Union Of Two Sets
Let A and B be two sets, then the union of A and B, written as A B, is the set of all
elements that are either in A or in B, or in both A and B.
Intersection Of Two Sets
Let A and B be two sets, then the intersection of A and B, written as A B, is the set of all
elements that are common to both sets A and B.
A universal set U is the set consisting of all elements under consideration.
Complement of a Set
Let A be any set, then the complement of set A, written as A , is the set consisting of
elements in the universal set U that are not in A.
Disjoint Sets
Two sets A and B are called disjoint sets if their intersection is an empty set.
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Example 1 List all the subsets of the set of primary colors { red, yellow, blue}.
Solution: The subsets are , {red}, {yellow}, {blue}, {red, yellow}, {red, blue}, {yellow, blue}, {red,
yellow, blue}
Note that the empty set is a subset of every set, and a set is a subset of itself.
Example 2 Let F = { Aikman, Jackson, Rice, Sanders, Young }, and B = {Griffey, Jackson, Sanders,
Thomas}. Find the intersection of the sets F and B.
Solution: The intersection of the two sets is the set whose elements belong to both sets. Therefore,
F B = {Jackson, Sanders }
Solution: The union of two sets is the set whose elements are either in A or in B or in both A and B.
Therefore
Observe that when writing the union of two sets, the repetitions are avoided.
Example 4 Let the universal set U = {red, orange, yellow, green, blue, indigo, violet}, and P = {red,
yellow, blue}. Find the complement of P.
Solution: The complement of a set P is the set consisting of elements in the universal set U that are not
in P. Therefore,
To achieve a better understanding, let us suppose that the universal set U represents the colors
of the spectrum, and P the primary colors, then P represents those colors of the spectrum
that are not primary colors.
Example 5 Let U = {red, orange, yellow, green, blue, indigo, violet}, P = {red, yellow, blue}, Q = { red,
green}, and R = {orange, green, indigo}. Find P Q R .
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Chapter 6: Sets And Counting 147
We now use Venn diagrams to illustrate the relations between sets. In the late 1800s, an
English logician named John Venn developed a method to represent relationship between
sets. He represented these relationships using diagrams, which are now known as Venn
diagrams. A Venn diagram represents a set as the interior of a circle. Often two or more
circles are enclosed in a rectangle where the rectangle represents the universal set. To
visualize an intersection or union of a set is easy. In this section, we will mainly use Venn
diagrams to sort various populations and count objects.
Example 6 Suppose a survey of car enthusiasts showed that over a certain time period, 30 drove cars
with automatic transmissions, 20 drove cars with standard transmissions, and 12 drove cars of
both types. If every one in the survey drove cars with one of these transmissions, how many
people participated in the survey?
A S A S A S
x 12 y 12 y 18 12
18 8
Because 30 people drove cars with automatic transmissions, the circle A must contain 30
elements. This means x + 12 = 30, or x = 18. Similarly, since 20 people drove cars with
standard transmissions, the circle B must contain 20 elements, or y + 12 = 20 which in turn
makes y = 8.
Now that all the information is sorted out, it is easy to read from the diagram that 18 people
drove cars with automatic transmissions only, 12 people drove both types of cars, and 8 drove
cars with standard transmissions only. Therefore, 18 + 12 + 8 = 38 people took part in the
survey.
Example 7 A survey of 100 people in California indicates that 60 people have visited Disneyland, 15
have visited Knott's Berry Farm, and 6 have visited both. How many people have visited
neither place?
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U U
D D
K K
54 6 9 54 6 9
x 31
We fill the three regions associated with the sets D and K in the same manner as before.
Since 100 people participated in the survey, the rectangle representing the universal set U
must contain 100 objects. Let x represent those people in the universal set that are neither in
the set D nor in K. This means 54 + 6 + 9 + x = 100, or x = 31.
Therefore, there are 31 people in the survey who have visited neither place.
Example 8 A survey of 100 exercise conscious people resulted in the following information:
• 50 jog, 30 swim, and 35 cycle
• 14 jog and swim
• 7 swim and cycle
• 9 jog and cycle
• 3 people take part in all three activities
a. How many jog but do not swim or cycle?
b. How many take part in only one of the activities?
c. How many do not take part in any of these activities?
Solution: Let J represent the set of people who jog, S the set of people who swim, and C who cycle.
In using Venn diagrams, our ultimate aim is to assign a number to each region. We always
begin by first assigning the number to the innermost region and then working our way out.
U U U
J S J S J S
x m 11 n 30 11 12
3 3 3
y z 6 4 6 4
p 22
C C C 12
I II III
We place a 3 in the innermost region of figure I because it represents the number of people
who participate in all three activities. Next we compute x, y and z.
Since 14 people jog and swim, x + 3 = 14, or x = 11.
The fact that 9 people jog and cycle results in y + 3 = 9, or y = 6.
Since 7 people swim and cycle, z + 3 = 7, or z = 4.
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1) List all subsets of the following set. 2) List all subsets of the following set.
{ Al, Bob} { Al, Bob, Chris}
3) List the elements of the following set. 4) List the elements of the following set.
{ Al, Bob, Chris, Dave} {Bob, Chris, Dave, Ed} { Al, Bob, Chris, Dave} {Bob, Chris, Dave, Ed}
In Problems 5 - 8, let Universal set = U = {a, b, c, d, e, f, g, h, i, j}, V = {a, e, i, f, h}, and W = { a, c, e, g, i}.
List the members of the following sets.
5) V W 6) V W
7) VW 8) VW
In 9 - 12, let Universal set U = {1, 2, 3, 4, 5, 6, 7, 8, 9, 10}, A = {1, 2, 3, 4, 5}, B = { 1, 3, 4, 6}, and C = {2, 4,
6}.
List the members of the following sets.
9) A B 10) A C
11) A B C 12) A B C
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13) In Mrs. Yamamoto's class of 35 students, 12 14) In the County of Santa Clara 700,000 people read
students are taking history, 18 are taking English, the San Jose Mercury News, 400,000 people read
and 4 are taking both. Draw a Venn diagram and the San Francisco Examiner, and 100,000 read both
determine how many students are taking neither newspapers. How many read either the Mercury
history nor English? News or the Examiner?
15) A survey of athletes revealed that for their minor 16) In a survey of computer users, it was found that 50
aches and pains, 30 used aspirin, 50 used ibuprofen, use HP printers, 30 use IBM printers, 20 use Apple
and 15 used both. How many athletes were printers, 13 use HP and IBM, 9 use HP and Apple,
surveyed? 7 use IBM and Apple, and 3 use all three. How
many use at least one of these Brands?
17) This quarter, a survey of 100 students at De Anza 18) In a survey of investors it was found that 100
college finds that 50 take math, 40 take English, invested in stocks, 60 in mutual funds, and 50 in
and 30 take history. Of these 15 take English and bonds. Of these, 35 invested in stocks and mutual
math, 10 take English and history, 10 take math funds, 30 in mutual funds and bonds, 28 in stocks
and history, and 5 take all three subjects. Draw a and bonds, and 20 in all three. Determine the
Venn diagram and determine the following. following.
a) The number of students taking math but not the a) The number of investors that participated in the
other two subjects. survey.
b) The number of students taking English or math b) How many invested in stocks or mutual funds
but not history. but not in bonds?
c) The number of students taking none of these c) How many invested in exactly one type of
subjects. investment?
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150 Chapter 6: Sets And Counting
Example 1 If a woman has two blouses and three skirts, how many different outfits consisting of a blouse
and a skirt can she wear?
Solution: Suppose we call the blouses b1 and b2, and skirts s1, s2, and s3.
s 1 b1s 1
b1 s 2 b1s 2
s 3 b1s 3
s 1 b2s 1
b2 s 2 b2s 2
s 3 b2s 3
The tree diagram gives us all six possibilities. The method involves two steps. First the
woman chooses a blouse. She has two choices: blouse one or blouse two. If she chooses
blouse one, she has three skirts to match it with; skirt one, skirt two, or skirt three. Similarly
if she chooses blouse two, she can match it with each of the three skirts, again. The tree
diagram helps us visualize these possibilities.
The reader should note that the process involves two steps. For the first step of choosing a
blouse, there are two choices, and for each choice of a blouse, there are three choices of
choosing a skirt. So altogether there are 2 . 3 = 6 possibilities.
If, in the above example, we add the shoes to the outfit, we have the following problem.
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Chapter 6: Sets And Counting 151
Example 2 If a woman has two blouses, three skirts, and two pumps, how many different outfits
consisting of a blouse, a skirt, and a pair of pumps can she wear?
Solution: Suppose we call the blouses b1 and b2, the skirts s1, s2, and s3, and the pumps p1, and p2.
p1 b1s 1p1
s1
p2 b1s 1p2
p1 b1s 2p1
b1 s2
p2 b1s 2p2
p1 b1s 3p1
s3
p2 b1s 3p2
p1 b2s 1p1
s1 p2 b2s 1p2
p1 b2s 2p1
b2 s2
p2 b2s 2p2
p1 b2s 3p1
s3
p2 b2s 3p2
We count the number of branches in the tree, and see that there are 12 different possibilities.
This time the method involves three steps. First, the woman chooses a blouse. She has two
choices: blouse one or blouse two. Now suppose she chooses blouse one. This takes us to
step two of the process which consists of choosing a skirt. She has three choices for a skirt,
and let us suppose she chooses skirt two. Now that she has chosen a blouse and a skirt, we
have moved to the third step of choosing a pair of pumps. Since she has two pairs of pumps,
she has two choices for the last step. Let us suppose she chooses pumps two. She has
chosen the outfit consisting of blouse one, skirt two, and pumps two, or b1s2p2. By looking
at the different branches on the tree, one can easily see the other possibilities.
The important thing to observe here, again, is that this is a three step process. There are two
choices for the first step of choosing a blouse. For each choice of a blouse, there are three
choices of choosing a skirt, and for each combination of a blouse and a skirt, there are two
choices of selecting a pair of pumps. All in all, we have 2 . 3 . 2 = 12 different possibilities.
The tree diagrams help us visualize the different possibilities, but they are not practical when
the possibilities are numerous. Besides, we are mostly interested in finding the number of
elements in the set and not the actual possibilities. But once the problem is envisioned, we
can solve it without a tree diagram. The two examples we just solved may have given us a
clue to do just that.
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Let us now try to solve Example 2 without a tree diagram. Recall that the problem involved
three steps: choosing a blouse, choosing a skirt, and choosing a pair of pumps. The number
of ways of choosing each are listed below.
The general multiplication axiom is not limited to just two tasks and can be used for any
number of tasks.
Example 3 A truck license plate consists of a letter followed by four digits. How many such license
plates are possible?
Solution: Since there are 26 letters and 10 digits, we have the following choices for each.
Example 4 In how many different ways can a 3-question true-false test be answered?
Solution: Since there are two choices for each question, we have
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Chapter 6: Sets And Counting 153
The reader should note that the first letter in each possibility is the answer corresponding to
the first question, the second letter corresponds to the answer to the second question and so
on. For example, TFF, says that the answer to the first question is given as true, and the
answers to the second and third questions false.
Example 5 In how many different ways can four people be seated in a row?
Solution: Suppose we put four chairs in a row, and proceed to put four people in these seats.
There are four choices for the first chair we choose. Once a person sits down in that chair,
there are only three choices for the second chair, and so on. We list as shown below.
4 3 2 1
Example 6 How many three-letter word sequences can be formed using the letters {A, B, C} if no letter
is to be repeated?
3 2 1
Therefore, 6 different word sequences can be formed.
Finally, we'd like to illustrate this with a tree diagram.
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154 Chapter 6: Sets And Counting
B C ABC
C B ACB
A C BAC
C A BCA
A B CAB
B A CBA
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Name:_________________________________ CHAPTER 6 PROBLEM SETS
SECTION 6.2 PROBLEM SET: TREE DIAGRAMS AND THE MULTIPLICATION AXIOM
1) A man has 3 shirts, and 2 pairs of pants. Use a tree 2) In a city election, there are 2 candidates for mayor,
diagram to determine the number of possible and 3 for supervisor. Use a tree diagram to find the
outfits. number of ways to fill the two offices.
3) There are 4 roads from Town A to Town B, 2 roads 4) Brown Home Construction offers a selection of 3
from Town B to Town C. Use a tree diagram to find floor plans, 2 roof types, and 2 exterior wall types.
the number of ways one can travel from Town A to Use a tree diagram to determine the number of
Town C. possible homes available.
5) For lunch, a small restaurant offers 2 types of 6) A California license plate consists of a number from
soups, three kinds of sandwiches, and two types of 1 to 5, then three letters followed by three digits.
soft drinks. Use a tree diagram to determine the How many such plates are possible?
number of possible meals consisting of a soup,
sandwich, and a soft drink.
7) A license plate consists of three letters followed by 8) How many different 4-letter radio station call letters
three digits. How many license plates are possible if can be made if the first letter must be K or W and
no letter may be repeated? none of the letters may be repeated?
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CHAPTER 6 PROBLEM SETS Name:_________________________________
9) How many seven-digit telephone numbers are 10) How many 3-letter word sequences can be formed
possible if the first two digits cannot be ones or using the letters {a, b, c, d} if no letter is to be
zeros? repeated?
11) A family has two children, use a tree diagram to 12) A coin is tossed three times and the sequence of
determine all four possibilities. heads and tails is recorded. Use a tree diagram to
determine the different possibilities.
13) In how many ways can a 4-question true-false test 14) In how many ways can three people be made to
be answered? stand in a straight line?
15) A combination lock is opened by first turning to the 16) How many different answers are possible for a
left, then to the right, and then to the left again. If multiple-choice test with 10 questions and five
there are 30 digits on the dial, how many possible possible answers for each question?
combinations are there?
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Chapter 6: Sets And Counting 155
6.3 Permutations
In Example 6 of section 6.2, we were asked to find the word sequences formed by using the
letters {A, B, C} if no letter is to be repeated. The tree diagram gave us the following six
arrangements.
ABC, ACB, BAC, BCA, CAB, and CBA.
Arrangements like these, where order is important and no element is repeated, are called
permutations.
Permutations
A permutation of a set of elements is an ordered arrangement where each element is
used once.
Example 1 How many three-letter word sequences can be formed using the letters {A, B, C, D}?
Solution: There are four choices for the first letter of our word, three choices for the second letter, and
two choices for the third.
4 3 2
Example 2 How many permutations of the letters of the word ARTICLE have consonants in the first and
last positions?
4 3
Since there are no more restrictions, we can go ahead and make the choices for the rest of the
positions.
So far we have used up 2 letters, therefore, five remain. So for the next position there are five
choices, for the position after that there are four choices, and so on. We get
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156 Chapter 6: Sets And Counting
4 5 4 3 2 1 3
So the total permutations are 4 . 5 . 4 . 3 . 2 . 1 . 3 = 1440.
Solution: The problem is easily solved by the multiplication axiom, and answers are as follows:
a. The number of four-letter word sequences is 5 . 4 . 3 . 2 = 120.
b. The number of three-letter word sequences is 5 . 4 . 3 = 60.
c. The number of two-letter word sequences is 5 . 4 = 20.
We often encounter situations where we have a set of n objects and we are selecting r objects
to form permutations. We refer to this as permutations of n objects taken r at a time, and
we write it as nPr.
Therefore, the above example can also be answered as listed below.
a. The number of four-letter word sequences is 5P4 = 120.
b. The number of three-letter word sequences is 5P3 = 60.
c. The number of two-letter word sequences is 5P2 = 20.
Before we give a formula for nPr, we'd like to introduce a symbol that we will use a great
deal in this as well as in the next chapter.
Factorial
n! = n(n – 1)(n – 2)(n – 3) . . . 3 . 2 .1.
Where n is a natural number.
0! = 1
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Chapter 6: Sets And Counting 157
n!
nPr = (n – r)!
The reader should become familiar with both formulas and should feel comfortable in
applying either.
a. 6P3 b. 7P2
Solution: We will identify n and r in each case and solve using the formulas provided.
6! 6! 6.5.4.3.2.1
6P3 = (6 – 3)! = 3! = = 120
3.2.1
b. 7P2 = 7 . 6 = 42, or
7! 7.6.5.4.3.2.1
7P2 = 5! = = 42
5. 4. 3 . 2 . 1
Next we consider some more permutation problems to get further insight into these concepts.
Example 5 In how many different ways can 4 people be seated in a straight line if two of them insist on
sitting next to each other?
Solution: Let us suppose we have four people A, B, C, and D. Further suppose that A and B want to sit
together. For the sake of argument, we tie A and B together and treat them as one person.
The four people are AB CD. Since AB is treated as one person, we have the following
possible arrangements.
AB CD, AB DC, C AB D, D AB C, CD AB , DC AB
Note that there are six more such permutations because A and B could also be tied in the
order BA. And they are
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158 Chapter 6: Sets And Counting
BA CD, BA DC, C BA D, D BA C, CD BA , DC BA
Example 6 You have 4 math books and 5 history books to put on a shelf that has 5 slots. In how many
ways can the books be shelved if the first three slots are filled with math books and the next
two slots are filled with history books?
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Chapter 6: Sets And Counting 159
Since the math books go in the first three slots, there are 4 choices for the first slot, 3 for the
second and 2 for the third. The fourth slot requires a history book, and has five choices.
Once that choice is made, there are 4 history books left, and therefore, 4 choices for the last
slot. The choices are shown below.
4 3 2 5 4
1. Permutations
A permutation of a set of elements is an ordered arrangement where each
element is used once.
2. Factorial
n! = n(n – 1)(n – 2)(n – 3) . . . 3 . 2 .1.
Where n is a natural number.
0! = 1
3. Permutations of n Objects Taken r at a Time
nPr = n(n – 1)(n – 2)(n – 3) . . . (n – r + 1), or
n!
nPr = (n – r)!
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Name:_________________________________ CHAPTER 6 PROBLEM SETS
1) How many three-letter words can be made using the 2) A grocery store has five checkout counters, and
letters {a, b, c, d, e} if no repetitions are allowed? seven clerks. How many different ways can the
clerks be assigned to the counters?
c) 8P3
d) 7P4
5) In how many ways can the letters of the word 6) How many permutations of the letters of the word
CUPERTINO be arranged if each letter is used only PROBLEM end in a vowel?
once in each arrangement?
7) How many permutations of the letters of the word 8) How many permutations of the letters PRODUCT
SECURITY end in a consonant? have consonants in the second and third positions?
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CHAPTER 6 PROBLEM SETS Name:_________________________________
9) How many three-digit numbers are there? 10) How many three-digit odd numbers are there?
11) In how many different ways can five people be 12) In how many different ways can five people be
seated in a row if two of them insist on sitting next seated in a row if two of them insist on not sitting
to each other? next to each other?
13) In how many ways can 3 English, 3 history, and 2 14) In how many ways can 3 English, 3 history, and 2
math books be set on a shelf, if the English books math books be set on a shelf, if they are grouped by
are set on the left, history books in the middle, and subject?
math books on the right?
15) You have 5 math books and 6 history books to put 16) You have 5 math books and 6 history books to put
on a shelf with five slots. In how many ways can on a shelf with five slots. In how many ways can
you put the books on the shelf if the first two slots you put the books on the shelf if the first two slots
are to be filled with math books and the next three are to be filled with the books of one subject and the
with history books? next three slots are to be filled with the books of the
other subject?
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160 Chapter 6: Sets And Counting
A B B A
C C
It happens that there are only two ways we can seat three people in a circle. This kind of
permutation is called a circular permutation. In such cases, no matter where the first person
sits, the permutation is not affected. Each person can shift as many places as they like, and
the permutation will not be changed. Imagine the people on a merry-go-round; the rotation of
the permutation does not generate a new permutation. So in circular permutations, the first
person is considered a place holder, and where he sits does not matter.
Circular Permutations
The number of permutations of n elements in a circle is (n –1)!
Example 1 In how many different ways can five people be seated at a circular table?
Solution: We have already determined that the first person is just a place holder. Therefore, there is
only one choice for the first spot. We have
1 4 3 2 1
So the answer is 24.
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Chapter 6: Sets And Counting 161
Example 2 In how many ways can four couples be seated at a round table if the men and women want to
sit alternately?
Solution: We again emphasize that the first person can sit anywhere without affecting the permutation.
So there is only one choice for the first spot. Suppose a man sat down first. The chair next to
it must belong to a woman, and there are 4 choices. The next chair belongs to a man, so there
are three choices and so on. We list the choices below.
1 4 3 3 2 2 1 1
So the answer is 144.
Now we address the second problem.
Permutations with Similar Elements
Let us determine the number of distinguishable permutations of the letters ELEMENT.
Suppose we make all the letters different by labeling the letters as follows.
E1LE2ME3NT
Since all the letters are now different, there are 7! different permutations.
Let us now look at one such permutation, say
LE1ME2NE3T
Suppose we form new permutations from this arrangement by only moving the E's. Clearly,
there are 3! or 6 such arrangements. We list them below.
LE1ME2NE3T
LE1ME3NE2T
LE2ME1NE3T
LE2ME3NE1T
LE3ME2NE1T
LE3ME1NE2T
Because the E's are not different, there is only one arrangement LEMENET and not six. This
is true for every permutation.
Let us suppose there are n different permutations of the letters ELEMENT.
Then there are n. 3! permutations of the letters E1LE2ME3NT.
But we know there are 7! permutations of the letters E1LE2ME3NT.
Therefore, n . 3! = 7!
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162 Chapter 6: Sets And Counting
7!
Or n = 3! .
n!
r1! r2! . . . rk!
Example 3 Find the number of different permutations of the letters of the word MISSISSIPPI.
Solution: The word MISSISSIPPI has 11 letters. If the letters were all different there would have been
11! different permutations. But MISSISSIPPI has 4 S's, 4 I's, and 2 P's that are alike.
11!
So the answer is 4!4!2!
Example 4 If a coin is tossed six times, how many different outcomes consisting of 4 heads and 2 tails
are there?
6!
The answer is 4! 2! = 15.
Example 5 In how many different ways can 4 nickels, 3 dimes, and 2 quarters be arranged in a row?
Solution: Assuming that all nickels are similar, all dimes are similar, and all quarters are similar, we
have permutations with similar elements. Therefore, the answer is
9!
4! 3! 2!
= 1260
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Chapter 6: Sets And Counting 163
Example 6 A stock broker wants to assign 20 new clients equally to 4 of its salespeople. In how many
different ways can this be done?
Solution: This means that each sales person gets 5 clients. The problem can be thought of as an
ordered partitions problem. In that case, using the formula we get
20!
5! 5! 5! 5!
= 11,732,745,024
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164 Chapter 6: Sets And Counting
We summarize.
1. Circular Permutations
The number of permutations of n elements in a circle is
(n –1)!
2. Permutations with Similar Elements
The number of permutations of n elements taken n at a time, with r1 elements
of one kind, r2 elements of another kind, and so on, such that n = r1 + r2 + . .
. + rk is
n!
r1! r2! . . . rk!
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Page 198
Name:_________________________________ CHAPTER 6 PROBLEM SETS
SECTION 6.4 PROBLEM SET: CIRCULAR PERMUTATIONS & PERMUTATIONS WITH SIMILAR ELEMENTS
Do the following problems using the techniques learned in this section.
1) In how many different ways can five children hold 2) In how many ways can three people be made to sit
hands to play "Ring Around the Rosy"? at a round table?
3) In how many different ways can six children ride a 4) In how many ways can three couples be seated at a
"Merry Go Around" with six horses? round table, so that men and women sit alternately?
5) In how many ways can six trinkets be arranged on a 6) In how many ways can five keys be put on a key
chain? ring?
7) Find the number of different permutations of the 8) Find the number of different permutations of the
letters of the word MASSACHUSETTS. letters of the word MATHEMATICS.
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CHAPTER 6 PROBLEM SETS Name:_________________________________
9) Seven flags, three red, two white, and two blue, are 10) How many different ways can three pennies, two
to be flown on seven poles. How many different nickels and five dimes be arranged in a row?
arrangements are possible?
11) How many four-digit numbers can be made using 12) How many five-digit numbers can be made using
two 2's and two 3's? two 6's and three 7's?
13) If a coin is tossed 5 times, how many different 14) If a coin is tossed 10 times, how many different
outcomes of 3 heads, and 2 tails are possible? outcomes of 7 heads, and 3 tails are possible?
15) If a team plays ten games, how many different 16) If a team plays ten games, how many different ways
outcomes of 6 wins, and 4 losses are possible? can the team have a winning season?
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Chapter 6: Sets And Counting 165
6.5 Combinations
Suppose we have a set of three letters {A, B, C}, and we are asked to make two-letter word
sequences. We have the following six permutations.
AB BA BC CB AC CA
Now suppose we have a group of three people {A, B, C} as Al, Bob, and Chris, respectively,
and we are asked to form committees of two people each. This time we have only three
committees, namely,
AB BC AC
When forming committees, the order is not important, because the committee that has Al and
Bob is no different than the committee that has Bob and Al. As a result, we have only three
committees and not six.
Forming word sequences is an example of permutations, while forming committees is an
example of combinations – the topic of this section.
Permutations are those arrangements where order is important, while combinations are those
arrangements where order is not significant. From now on, this is how we will tell
permutations and combinations apart.
In the above example, there were six permutations, but only three combinations.
Just as the symbol nPr represents the number of permutations of n objects taken r at a time,
nCr represents the number of combinations of n objects taken r at a time.
So in the above example, 3P2 = 6, and 3C2 = 3.
Our next goal is to determine the relationship between the number of combinations and the
number of permutations in a given situation.
In the above example, if we knew that there were three combinations, we could have found
the number of permutations by multiplying this number by 2!. That is because each
combination consists of two letters, and that makes 2! permutations.
Example 1 Given the set of letters {A, B, C, D}. Write the number of combinations of three letters, and
then from these combinations determine the number of permutations.
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166 Chapter 6: Sets And Counting
4P3
or 4C3 = 3!
nPr
In general, nCr = r!
n!
Since nPr = (n – r)!
n!
We have, nCr = (n – r)! r!
Summarizing,
1. Combinations
A combination of a set of elements is an arrangement where each element is
used once, and order is not important.
2. The Number of Combinations of n Objects Taken r at a Time
n!
nCr = (n – r)! r!
5! 5!
5C3 = (5 – 3)! 3! = 2! 3! = 10
7! 7!
7C3 = (7 – 3)! 3! = 4! 3! = 35.
Example 3 In how many different ways can a student select to answer five questions from a test that has
seven questions, if the order of the selection is not important?
Solution: Since the order is not important, it is a combination problem, and the answer is
7C5 = 21.
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Chapter 6: Sets And Counting 167
Example 4 How many line segments can be drawn by connecting any two of the six points that lie on the
circumference of a circle?
Solution: Since the line that goes from point A to point B is same as the one that goes from B to A, this
is a combination problem.
It is a combination of 6 objects taken 2 at a time. Therefore, the answer is
6!
6C2 = 4! 2!
= 15
Example 5 There are ten people at a party. If they all shake hands, how many hand-shakes are possible?
Solution: Note that between any two people there is only one hand shake. Therefore, we have
10C2 = 45 hand-shakes.
Example 6 The shopping area of a town is in the shape of square that is 5 blocks by 5 blocks. How
many different routes can a taxi driver take to go from one corner of the shopping area to the
opposite cater-corner?
Solution: Let us suppose the taxi driver drives from the point A, the lower left hand corner, to the point
B, the upper right hand corner as shown in the figure below.
To reach his destination, he has to travel ten blocks; five horizontal, and five vertical. So if
out of the ten blocks he chooses any five horizontal, the other five will have to be the vertical
blocks, and vice versa. Therefore, all he has to do is to choose 5 out of ten.
The answer is 10C5, or 252.
Alternately, the problem can be solved by permutations with similar elements.
The taxi driver's route consists of five horizontal and five vertical blocks. If we call a
horizontal block H, and a vertical block a V, then one possible route may be as follows.
HHHHHVVVVV
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168 Chapter 6: Sets And Counting
10!
Clearly there are 5! 5! = 252 permutations.
10!
Further note that by definition 10C5 = 5! 5! .
Example 7 If a coin is tossed six times, in how many ways can it fall four heads and two tails?
Solution: First we solve this problem using section 6.5 technique–permutations with similar elements.
We need 4 heads and 2 tails, that is
HHHHTT
6!
There are 4! 2! = 15 permutations.
6!
6C4 = 2! 4!
6!
and 6C2 = 4! 2!
Which implies
6C4 = 6C2.
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Name:_________________________________ CHAPTER 6 PROBLEM SETS
1) How many different 3-people committees can be 2) How many different 5-player teams can be chosen
chosen from ten people? from eight players?
3) In how many ways can a person choose to vote for 4) Compute the following:
three out of five candidates on a ballot for a school
a) 9C2
board election?
b) 6C4
c) 8C3
d) 7C4
5) How many 5-card hands can be chosen from a deck 6) How many 13-card bridge hands can be chosen
of cards? from a deck of cards?
7) There are twelve people at a party. If they all shake 8) In how many ways can a student choose to do four
hands, how many different hand-shakes are there? questions out of five on a test?
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CHAPTER 6 PROBLEM SETS Name:_________________________________
9) Five points lie on a circle. How many chords can be 10) How many diagonals does a hexagon have?
drawn through them?
11) There are five teams in a league. How many games 12) A team plays 15 games a season. In how many
are played if every team plays each other twice? ways can it have 8 wins and 7 losses?
13) In how many different ways can a 4-child family 14) A coin is tossed five times. In how many ways can
have 2 boys and 2 girls? it fall three heads and two tails?
15) The shopping area of a town is a square that is six 16) If the shopping area in the previous problem has a
blocks by six blocks. How many different routes rectangular form of 5 blocks by 3 blocks, then how
can a taxi driver take to go from one corner of the many different routes can a taxi driver take to drive
shopping area to the opposite cater-corner? from one end of the shopping area to the opposite
kitty corner end?
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Chapter 6: Sets And Counting 169
Example 1 How many five-people committees consisting of 2 men and 3 women can be chosen from a
total of 4 men and 4 women?
M1M2M3M4W1W2W3W4
Since we want 5-people committees consisting of 2 men and 3 women, we'll first form all
possible two-man committees and all possible three-woman committees. Clearly there are
4C2 = 6 two-man committees, and 4C3 = 4 three-woman committees, we list them as follows:
For every 2-man committee there are four 3-woman committees that can be chosen to make a
5-person committee. If we choose M1M2 as our 2-man committee, then we can choose any
of W1W2W3, W1W2W4, W1W3W4, or W2W3W4 as our 3-woman committees. As a result,
we get
Similarly, if we choose M1M3 as our 2-man committee, then, again, we can choose any of
W1W2W3, W1W2W4, W1W3W4, or W2W3W4 as our 3-woman committees.
And so on.
Since there are six 2-man committees, and for every 2-man committee there are four 3-
woman committees, there are altogether 6 . 4 = 24 five-people committees.
In essence, we are applying the multiplication axiom to the different combinations.
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170 Chapter 6: Sets And Counting
Example 2 A high school club consists of 4 freshmen, 5 sophomores, 5 juniors, and 6 seniors. How
many ways can a committee of 4 people be chosen that includes
a. One student from each class?
b. All juniors?
c. Two freshmen and 2 seniors?
d. No freshmen?
e. At least three seniors?
Example 3 How many five-letter word sequences consisting of 2 vowels and 3 consonants can be formed
from the letters of the word INTRODUCE?
Solution: First we select a group of five letters consisting of 2 vowels and 3 consonants. Since there
are 4 vowels and 5 consonants, we have
4C2 . 5C3
Since our next task is to make word sequences out of these letters, we multiply these by 5!.
4C2 . 5C3 . 5! = 7200.
Example 4 A standard deck of playing cards has 52 cards consisting of 4 suits each with 13 cards. In
how many different ways can a 5-card hand consisting of four cards of one suit and one of
another be drawn?
Solution: We will do the problem using the following steps. Step 1. Select a suit. Step 2. Select four
cards from this suit. Step 3. Select another suit. Step 4. Select a card from that suit.
Applying the multiplication axiom, we have
Ways of selecting a Ways of selecting 4 Ways of selecting Ways of selecting a
suit cards from this suit the next suit card from that suit
4C1 13C4 3C1 13C1
4C1 . 13C4 . 3C1 . 13C1 = 111,540.
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Name:_________________________________ CHAPTER 6 PROBLEM SETS
1) How many 5-people committees consisting of three 2) A club has 4 men, 5 women, 8 boys and 10 girls as
boys and two girls can be chosen from a group of members. In how many ways can a group of 2 men,
four boys and four girls? 3 women, 4 boys and 4 girls be chosen?
3) How many 4-people committees chosen from four 4) A batch contains 10 transistors of which three are
men and six women will have at least three men? defective. If three are chosen, in how many ways
can one get two defective?
5) In how many ways can five counters labeled A, B, 6) How many 4-letter word sequences consisting of
C, D and E at a store be staffed by two men and two vowels and two consonants can be made from
three women chosen from a group of four men and the letters of the word PHOENIX if no letter is
six women? repeated?
Three marbles are chosen from an urn that contains 5 red, 4 white, and 3 blue marbles. How many samples of the
following type are possible?
7) All three white. 8) Two blue and one white.
Five coins are chosen from a bag that contains 4 dimes, 5 nickels, and 6 pennies. How many samples of five of the
following type are possible?
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CHAPTER 6 PROBLEM SETS Name:_________________________________
17) Two of one kind and two of another kind. 18) Three of one kind and two of another kind.
Find the number of different ways to draw a 5-card hand from a deck to have the following combinations.
21) Two hearts and three diamonds. 22) Two cards of one suit, and three of another suit.
23) Two kings and three queens. 24) Two cards of one value and three of another value.
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5) Find the third term of (2x - 3y)6. 6) Find the sixth term of (5x + y)8.
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CHAPTER 6 PROBLEM SETS Name:_________________________________
7) Find the coefficient of the x3y4 term in the 8) Find the coefficient of the a4b6 term in the
expansion of (2x + y)7. expansion of (3a - b)10.
9) A coin is tossed 5 times, in how many ways is it 10) A coin is tossed 10 times, in how many ways is it
possible to get three heads and two tails? possible to get seven heads and three tails?
11) How many subsets are there of a set that has 6 12) How many subsets are there of a set that has n
elements? elements?
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Name:_________________________________ CHAPTER 6 PROBLEM SETS
1) Suppose of the 4,000 freshmen at a college everyone is enrolled in a mathematics or an English class during a
given quarter. If 2,000 are enrolled in a mathematics class, and 3,000 in an English class, how many are
enrolled in both a mathematics class and an English class?
2) In a survey of 250 people, it was found that 125 had read Time magazine, 175 had read Newsweek, 100 had
read U. S. News, 75 had read Time and Newsweek, 60 had read Newsweek and U. S. News, 55 had read Time
and U. S. News, and 25 had read all three.
a) How many had read Time but not the other two?
b) How many had read Time or Newsweek but not the U. S. News And World Report?
3) At a manufacturing plant, a product goes through assembly, testing, and packing. If a plant has three assembly
stations, two testing stations, and two packing stations, in how many different ways can a product achieve its
completion?
4) Six people are to line up for a photograph. How many different lineups are possible if three of them insist on
standing next to each other ?
5) How many four-letter word sequences can be made from the letters of the word CUPERTINO?
6) In how many different ways can a 20-question multiple choice test be designed so that its answers contain 2
A's, 4 B's, 9 C's, 3 D's, and 2 E's?
7) The U. S. Supreme Court has nine judges. In how many different ways can the judges cast a six-to-three
decision in favor of a ruling?
8) In how many different ways can a coach choose a linebacker, a guard, and a tackle from five players on the
bench, if all five can play any of the three positions?
9) How many three digit even numbers can be formed from the digits 1, 2, 3, 4, 5 if no repetitions are allowed?
10!
10) Compute: a) 9C4 b) 8P3 c) 4! (10 – 4)!
11) In how many ways can 3 English, 3 Math, and 4 Spanish books be set on a shelf if the books are grouped by
subject?
12) In how many ways can a 10-question multiple choice test with four possible answers for each question be
answered?
13) On a soccer team three fullbacks can play any of the three fullback positions, left, center, and right. The three
halfbacks can play any of the three halfback positions, the four forwards can play any of the four positions,
and the goalkeeper plays only his position. How many different arrangements of the 11 players are possible?
14) From a group of 6 people, 3 are assigned to cleaning, 2 to hauling and one to garbage collecting. How many
different ways can this be done?
15) How many three-letter word sequences can be made from the letters of the word OXYGEN?
16) In how many ways can 3 books be selected from 4 English and 2 History books if at least one English book
must be chosen?
17) Five points lie on the rim of a circle. Choosing the points as vertices, how many different triangles can be
drawn?
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18) A club consists of six men and nine women. In how many ways can a president, a vice president and a
treasurer be chosen if the two of the officers must be women?
19) Of its 12 sales people, a company wants to assign 4 to its Western territory, 5 to its Northern territory, and 3 to
its Southern territory. How many ways can this be done?
20) How many permutations of the letters of the word OUTSIDE have consonants in the first and last place?
21) How many distinguishable permutations are there in the word COMMUNICATION?
22) How many five-card poker hands consisting of the following distribution are there?
c) Two pairs(e.g. two aces, two kings and one other card)
23) Company stocks on an exchange are given symbols consisting of three letters. How many different three-letter
symbols are possible?
25) In how many ways can 7 people be made to stand in a straight line? In a circle?
26) A united nations delegation consists of 6 Americans, 5 Russians, and 4 Chinese. Answer the following
questions.
b) How many committees of three people consisting of at least one American are there?
d) How many committees of three people have more Americans than Russians?
e) How many committees of three people do not have all three Americans?
27) If a coin is flipped five times, in how many different ways can it show up three heads?
28) To reach his destination, a man is to walk three blocks north and four blocks west. How many different routes
are possible?
29) All three players of the women's beach volleyball team, and all three players of the men's beach volleyball
team are to line up for a picture with all members of the women's team lined together and all members of men's
team lined up together. How many ways can this be done?
30) From a group of 6 Americans, 5 Japanese and 4 German delegates, two Americans, two Japanese and a
German are chosen to line up for a photograph. In how many different ways can this be done?
32) Find the coefficient of the a5b4 term in the expansion of (a – 2b)9.
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CHAPTER 7
Probability
In this chapter, you will learn to:
1. Write sample spaces.
2. Determine whether two events are mutually exclusive.
3. Use the Addition Rule.
4. Calculate probabilities using both tree diagrams and combinations.
5. Do problems involving conditional probability.
6. Determine whether two events are independent.
Solution: A die has six faces each having an equally likely chance of appearing. Therefore, the set of
all possible outcomes S is
{1, 2, 3, 4, 5, 6}.
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188 Chapter 7: Probability
B BBB
G BBG
B
B BGB
G BGG
B GBB
G GBG
G
B GGB
G GGG
Solution: We assume one of the dice is red, and the other green. We have the following 36
possibilities.
Green
Red 1 2 3 4 5 6
1 (1, 1) (1, 2) (1, 3) (1, 4) (1, 5) (1, 6)
2 (2, 1) (2, 2) (2, 3) (2, 4) (2, 5) (2, 6)
3 (3, 1) (3, 2) (3, 3) (3, 4) (3, 5) (3, 6)
4 (4, 1) (4, 2) (4, 3) (4, 4) (4, 5) (4, 6)
5 (5, 1) (5, 2) (5, 3) (5, 4) (5, 5) (5, 6)
6 (6, 1) (6, 2) (6, 3) (6, 4) (6, 5) (6, 6)
The entry (2, 5), for example, indicates that the red die shows a two, and the green a 5.
Now that we understand the concept of a sample space, we will define probability.
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Chapter 7: Probability 189
Probability
For a sample space S, and an outcome A of S, the following two properties are
satisfied.
1. If A is an outcome of a sample space, then the probability of A, denoted by P(A),
is between 0 and 1, inclusive.
0 ≤ P(A) ≤ 1
2. The sum of the probabilities of all the outcomes in S equals 1.
Example 4 If two dice, one red and one green, are rolled, find the probability that the red die shows a 3
and the green shows a six.
Solution: Since two dice are rolled, there are 36 possibilities. The probability of each outcome, listed in
Example 3, is equally likely.
Since (3, 6) is one such outcome, the probability of obtaining (3, 6) is 1/36.
The example we just considered consisted of only one outcome of the sample space. We are
often interested in finding probabilities of several outcomes represented by an event.
An event is a subset of a sample space. If an event consists of only one outcome, it is called a
simple event.
Example 5 If two dice are rolled, find the probability that the sum of the faces of the dice is 7.
Solution: Let E represent the event that the sum of the faces of two dice is 7.
Since the possible cases for the sum to be 7 are: (1, 6), (2,5), (3, 4), (4, 3), (5, 2), and (6, 1).
E = {(1, 6), (2,5), (3, 4), (4, 3), (5, 2), and (6, 1)}
and the probability of the event E,
P(E) = 6/36 or 1/6.
Example 6 A jar contains 3 red, 4 white, and 3 blue marbles. If a marble is chosen at random, what is the
probability that the marble is a red marble or a blue marble?
Solution: We assume the marbles are r1, r2, r3, w1, w2, w3, w4, b1, b2, b3. Let the event C represent
that the marble is red or blue.
The sample space S = {r1, r2, r3, w1, w2, w3, w4, b1, b2, b3}
And the event C = {r1, r2, r3, b1, b2, b3}
Therefore, the probability of C,
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190 Chapter 7: Probability
Example 7 A jar contains three marbles numbered 1, 2, and 3. If two marbles are drawn, what is the
probability that the sum of the numbers is 4?
Solution: Since two marbles are drawn, the sample space consists of the following six possibilities.
S = {(1, 2), (1, 3), (2, 3), (2, 1), (3, 1), (3, 2)}
Let the event F represent that the sum of the numbers is four. Then
F = {(1, 3), (3, 1)}
Therefore, the probability of F is
P(F) = 2/6 or 1/3.
Example 8 A jar contains three marbles numbered 1, 2, and 3. If two marbles are drawn, what is the
probability that the sum of the numbers is at least 4?
Solution: The sample space, as in Example 7, consists of the following six possibilities.
S = {(1, 2), (1, 3), (2, 3), (2, 1), (3, 1), (3, 2)}
Let the event A represent that the sum of the numbers is at least four. Then
F = {(1, 3), (3, 1), (2, 3), (3, 2)}
Therefore, the probability of F is
P(F) = 4/6 or 2/3.
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5) Two dice are rolled. 6) A jar contains four marbles numbered 1, 2, 3, and
4. Two marbles are drawn.
In problems 7 - 12, a card is selected from a deck. Find the following probabilities.
A jar contains 6 red, 7 white, and 7 blue marbles. If a marble is chosen at random, find the following probabilities.
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17) P(two boys and a girl) 18) P(at least one boy)
21) P(the sum of the dice is 5) 22) P(the sum of the dice is 8)
A jar contains four marbles numbered 1, 2, 3, and 4. If two marbles are drawn, find the following probabilities.
25) P(the sum of the numbers is 5) 26) P(the sum of the numbers is odd)
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Chapter 7: Probability 191
n–k k
P(Ec) = n = 1 – n = 1 – P(E).
Of particular interest to us are the events whose outcomes do not overlap. We call these
events mutually exclusive.
Two events E and F are said to be mutually exclusive if they do not intersect. That is,
E F= .
Next we'll determine whether a given pair of events are mutually exclusive.
Example 1 A card is drawn from a standard deck. Determine whether the pair of events given below is
mutually exclusive.
E = {The card drawn is an Ace}
F = {The card drawn is a heart}
Example 2 Two dice are rolled. Determine whether the pair of events given below is mutually exclusive.
G = {The sum of the faces is six}
H = {One die shows a four}
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192 Chapter 7: Probability
Example 3 A family has three children. Determine whether the following pair of events are mutually
exclusive.
M = {The family has at least one boy}
N = {The family has all girls}
Solution: Although the answer may be clear, we list both the sets.
M = {BBB, BBG, BGB, BGG, GBB, GBG, GGB} and N = {GGG}
Clearly, M N=
Therefore, the events M and N are mutually exclusive.
We will now consider problems that involve the union of two events.
Example 4 If a die is rolled, what is the probability of obtaining an even number or a number greater than
four?
Solution: Let E be the event that the number shown on the die is an even number, and let F be the event
that the number shown is greater than four.
The sample space S = {1, 2, 3, 4, 5, 6}. The event E = {2, 4, 6}, and the event F = {5, 6}
We need to find P(E F).
Since P(E) = 3/6, and P(F) = 2/6, a student may say P(E F) = 3/6 + 2/6. This will be
incorrect because the element 6, which is in both E and F has been counted twice, once as an
element of E and once as an element of F. In other words, the set E F has only four
elements and not five. Therefore, P(E F) = 4/6 and not 5/6.
This can be illustrated by a Venn diagram.
The sample space S, the events E and F, and E F are listed below.
S = {1, 2, 3, 4, 5, 6}, E = {2, 4, 6}, F = {5, 6}, and E F = {6}.
S
E F
2 6 5
4 3
1
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Chapter 7: Probability 193
Since the probability of an event is the number of elements in that event divided by the
number of all possible outcomes, we have
P(E F) = P(E) + P(F) – P(E F)
Applying the above for Example 4, we get
P(E F) = 3/6 + 2/6 – 1/6 = 4/6
This is because, when we add P(E) and P(F), we have added P(E F) twice. Therefore, we
must subtract P(E F), once.
This gives us the general formula, called the Addition Rule, for finding the probability of the
union of two events. It states
P(E F) = P(E) + P(F) – P(E F)
If two events E and F are mutually exclusive, then E F= and P(E F) = 0, and we get
P(E F) = P(E) + P(F)
Example 5 If a card is drawn from a deck, use the addition rule to find the probability of obtaining an ace
or a heart.
Solution: Let A be the event that the card is an ace, and H the event that it is a heart.
Since there are four aces, and thirteen hearts in the deck, P(A) = 4/52 and P(H) = 13/52.
Furthermore, since the intersection of two events is an ace of hearts, P(A H) = 1/52
We need to find P(A H).
P(A H) = P(A) + P(H) – P(A H)
= 4/52 + 13/52 – 1/52 = 16/52.
Example 6 Two dice are rolled, and the events F and T are as follows:
F = {The sum of the dice is four} and T = {At least one die shows a three}
Find P(F T).
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Chapter 7: Probability 195
Example 7 Mr. Washington is seeking a mathematics instructor's position at his favorite community
college in Cupertino. His employment depends on two conditions: whether the board
approves the position, and whether the hiring committee selects him. There is a 80% chance
that the board will approve the position, and there is a 70% chance that the hiring committee
will select him. If there is a 90% chance that at least one of the two conditions, the board
approval or his selection, will be met, what is the probability that Mr. Washington will be
hired?
Solution: Let A be the event that the board approves the position, and S be the event that Mr.
Washington gets selected. We have,
P(A) = .80, P(S) = .70, and P(A S) = .90.
We need to find, P(A S).
The addition formula states that,
P(A S) = P(A) + P(S) – P(A S)
Substituting the known values, we get
.90 = .80 + .70 - P(A S)
Therefore, P(A S) = .60.
Example 8 The probability that this weekend will be cold is .6, the probability that it will be rainy is .7,
and probability that it will be both cold and rainy is .5. What is the probability that it will be
neither cold nor rainy?
Solution: Let C be the event that the weekend will be cold, and R be event that it will be rainy. We are
given that
P(C) = .6, P(R) = .7, P(C R) = .5
P(C R) = P(C) + P(R) – P(C R) = .6 + .7 – .5 = .8
We want to find P((C R)c).
P((C R)c) = 1 - P(C R) = 1 – .8 = .2
We summarize this section by listing the important rules.
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Name:_________________________________ CHAPTER 7 PROBLEM SETS
SECTION 7.2 PROBLEM SET: MUTUALLY EXCLUSIVE EVENTS AND THE ADDITION RULE
Determine whether the following pair of events are mutually exclusive.
7) A card is drawn from a deck, and the events C and 8) A die is rolled, and the events E and F are as
D are as follows: follows:
C = {It is a king} E = {An even number shows}
D = {It is a heart} F = {A number greater than 3 shows}
Find P(C or D). Find P(E or F).
9) Two dice are rolled, and the events G and H are as 10) Three coins are tossed, and the events I and J are as
follows: follows:
G = {The sum of dice is 8} I = {Two heads come up}
H ={Exactly one die shows a 6} J = {At least one tail comes up}
Find P(G or H). Find P(I or J).
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CHAPTER 7 PROBLEM SETS Name:_________________________________
11) At De Anza college, 20% of the students take Finite 12) This quarter, there is a 50% chance that Jason will
Mathematics, 30% take Statistics and 10% take pass Accounting, a 60% chance that he will pass
both. What percentage of the students take Finite English, and 80% chance that he will pass at least
Mathematics or Statistics? one of these two courses. What is the probability
that he will pass both Accounting and English?
The following table shows the distribution of Democratic and Republican U.S. Senators by gender.
19) If P(E) = .5 and P(F) = .4 and E and F are mutually 20) If P(E) = .4 and P(F) = .2 and E and F are mutually
exclusive, find P(E and F). exclusive, find P(E or F).
21) If P(E) = .3 and P(E or F) = .6 and P(E and F) = 22) If P(E) = .4, P(F) = .5 and P(E or F) = .7,
.2, find P(F). find P(E and F).
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196 Chapter 7: Probability
Example 1 Suppose a jar contains 3 red and 4 white marbles. If two marbles are drawn with
replacement, what is the probability that both marbles are red?
Solution: Let E be the event that the first marble drawn is red, and let F be the event that the second
marble drawn is red.
We need to find P(E F).
By the statement, "two marbles are drawn with replacement," we mean that the first marble is
replaced before the second marble is drawn.
There are 7 choices for the first draw. And since the first marble is replaced before the
second is drawn, there are, again, seven choices for the second draw. Using the
multiplication axiom, we conclude that the sample space S consists of 49 ordered pairs. Of
the 49 ordered pairs, there are 3 3 = 9 ordered pairs that show red on the first draw and,
also, red on the second draw. Therefore,
9 3 3
P(E F) = 49 = 7 . 7
Example 2 If in Example 1, the two marbles are drawn without replacement, then what is the probability
that both marbles are red?
Solution: By the statement, "two marbles are drawn without replacement," we mean that the first
marble is not replaced before the second marble is drawn.
Again, we need to find P(E F).
There are, again, 7 choices for the first draw. And since the first marble is not replaced
before the second is drawn, there are only six choices for the second draw. Using the
multiplication axiom, we conclude that the sample space S consists of 42 ordered pairs. Of
the 42 ordered pairs, there are 3 2 = 6 ordered pairs that show red on the first draw and red
on the second draw. Therefore,
6 3 2
P(E F) = 42 = 7 . 6
Here 3/7 represents P(E), and 2/6 represents the probability of drawing a red on the second
draw, given that the first draw resulted in a red. We write the latter as P(red on the second |
red on first) or P(F | E). The "|" represents the word "given." Therefore,
P(E F) = P(E) . P(F | E)
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Chapter 7: Probability 197
The above result is an important one and will appear again in later sections.
Example 3 Suppose a jar contains 3 red and 4 white marbles. If two marbles are drawn without
replacement, find the following probabilities using a tree diagram.
a. The probability that both marbles are white.
b. The probability that the first marble is red and the second white.
c. The probability that one marble is red and the other white.
Solution: Let R be the event that the marble drawn is red, and let W be the event that the marble drawn
is white.
We draw the following tree diagram.
R RR = (3/7)(2/6) = 6/42
2/6
R
4/6
3/7 W RW = (3/7)(4/6) = 12/42
Although the tree diagrams give us better insight into a problem, they are not practical for
problems where more than two or three things are chosen. In such cases, we use the concept
of combinations that we learned in the last chapter. This method is best suited for problems
where the order in which the objects are chosen is not important, and the objects are chosen
without replacement.
Example 4 Suppose a jar contains 3 red, 2 white, and 3 blue marbles. If three marbles are drawn without
replacement, find the following probabilities.
a. P(Two red and one white)
b. P(One of each color)
c. P(None blue)
d. P(At least one blue)
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198 Chapter 7: Probability
3C2 2C1 6
P(Two red and one white) = 8C3 = 56 .
c. P(None blue)
There are 5 non-blue marbles, therefore
5C3 10 5
P(None blue) = 8C3 = 56 = 28 .
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Chapter 7: Probability 199
Example 5 Five cards are drawn from a deck. Find the probability of obtaining two pairs, that is, two
cards of one value, two of another value, and one other card.
Solution: Let us first do an easier problem–the probability of obtaining a pair of kings and queens.
Since there are four kings, and four queens in the deck, the probability of obtaining two
kings, two queens and one other card is
Example 6 If there are 25 people in a room, what is the probability that at least two people have the same
birthday?
Solution: Let event E represent that at least two people have the same birthday.
We first find the probability that no two people have the same birthday.
We analyze as follows.
Suppose there are 365 days to every year. According to the multiplication axiom, there are
36525 possible birthdays for 25 people. Therefore, the sample space has 36525 elements. We
are interested in the probability that no two people have the same birthday. There are 365
possible choices for the first person and since the second person must have a different
birthday, there are 364 choices for the second, 363 for the third, and so on. Therefore,
365P25
P(at least two people have the same birthday) = 1 – = .5687
36525
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Name:_________________________________ CHAPTER 7 PROBLEM SETS
SECTION 7.3 PROBLEM SET: CALCULATING PROBABILITIES USING TREE DIAGRAMS AND COMBINATIONS
Two apples are chosen from a basket containing five red and three yellow apples. Draw a tree diagram below, and
find the following probabilities.
A basket contains six red and four blue marbles. Three marbles are drawn at random. Find the following
probabilities using the method shown in Example 2. Do not use combinations.
7) P(one red, two blue) 8) P(first red, second blue, third red)
Three marbles are drawn from a jar containing five red, four white, and three blue marbles. Find the following
probabilities using combinations.
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CHAPTER 7 PROBLEM SETS Name:_________________________________
A committee of four is selected from a total of 4 freshmen, 5 sophomores, and 6 juniors. Find the probabilities for
the following events.
15) All four of the same class. 16) Not all four from the same class.
17) Exactly three of the same class. 18) More juniors than freshmen and sophomores
combined.
Five cards are drawn from a deck. Find the probabilities for the following events.
19) Two hearts, two spades, and one club. 20) A flush of any suit(all cards of a single suit).
21) A full house of nines and tens(3 nines and 2 tens). 22) Any full house.
25) If there are five people in a room, what is the 26) If there are five people in a room, what is the
probability that no two have the same birthday? probability that at least two people have the same
birthday?
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200 Chapter 7: Probability
Example 1 A family has three children. Find the conditional probability of having two boys and a girl
given that the first born is a boy.
Solution: Let event E be that the family has two boys and a girl, and F the event that the first born is a
boy.
First, we list the sample space for a family of three children as follows.
S = {BBB, BBG, BGB, BGG, GBB, GBG, GGB, GGG}
Since we know that the first born is a boy, our possibilities narrow down to four outcomes,
BBB, BBG, BGB, and BGG.
Among the four, BBG and BGB represent two boys and a girl.
Therefore, P(E | F} = 2/4 or 1/2.
Let us now develop a formula for the conditional probability P(E | F).
Suppose an experiment consists of n equally likely events. Further suppose that there are m
elements in F, and c elements in E F, as shown in the following Venn diagram.
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Chapter 7: Probability 201
S
E F
c m– c
If the event F has occurred, the set of all possible outcomes is no longer the entire sample
space, but instead, the subset F. Therefore, we only look at the set F and at nothing outside of
F. Since F has m elements, the denominator in the calculation of P(E | F) is m. We may think
that the numerator for our conditional probability is the number of elements in E. But clearly
we cannot consider the elements of E that are not in F. We can only count the elements of E
that are in F, that is, the elements in E F. Therefore,
c
P(E | F) = m
c/n
P(E | F) = m/n
P(E F)
P(E | F) = P(F)
Example 2 A single die is rolled. Use the above formula to find the conditional probability of obtaining
an even number given that a number greater than three has shown.
Solution: Let E be the event that an even number shows, and F be the event that a number greater than
three shows. We want P(E | F).
E = {2, 4, 6} and F = {4, 5, 6}. Which implies, E F = { 4, 6}
Therefore, P(F) = 3/6, and P(E F) = 2/6
P(E F) 2/6 2
P(E | F) = P(F) = 3/6 = 3 .
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202 Chapter 7: Probability
Example 3 The following table shows the distribution by gender of students at a community college who
take public transportation and the ones who drive to school.
P(E F)
Solution: We use the conditional probability formula P(E | F) = P(F) .
P(D M) 39/100 39
a. P(D | M) = P(M) = 47/100 = 47 .
P(F D) 40/100 40
b. P(F | D) = P(D) = 79/100 = 79 .
P(M P) 8/100 8
c. P(M | P) = P(P) = 21/100 = 21 .
Example 4 Given P(E) = .5, P(F) = .7, and P(E F) = .3. Find the following.
a. P(E | F) b. P(F | E).
P(E F)
Solution: We use the conditional probability formula P(E | F) = P(F) .
.3 3
a. P(E | F) = .7 = 7
Example 5 Given two mutually exclusive events E and F such that P(E) = .4, P(F) = .9. Find P(E | F).
0
P(E | F) = .9 = 0.
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Chapter 7: Probability 203
P(E F)
Solution: Using the conditional probability formula P(E | F) = P(F) , we get
P(E F)
P(F | E) = P(E)
Substituting,
.3
.5 = P(E) or P(E) = 3/5
Example 7 In a family of three children, find the conditional probability of having two boys and a girl,
given that the family has at least two boys.
Solution: Let event E be that the family has two boys and a girl, and let F be the probability that the
family has at least two boys. We want P(E | F).
We list the sample space along with the events E and F.
S = {BBB, BBG, BGB, BGG, GBB, GBG, GGB, GGG}
E = {BBG, BGB, GBB} and F = {BBB , BBG, BGB, GBB}
E F = {BBG, BGB, GBB}
Therefore, P(F) = 4/8, and P(E F) = 3/8.
And
3/8 3
P(E | F) = 4/8 = 4 .
Example 8 At a community college 65% of the students use IBM computers, 50% use Macintosh
computers, and 20% use both. If a student is chosen at random, find the following
probabilities.
a. The student uses an IBM given that he uses a Macintosh.
b. The student uses a Macintosh knowing that he uses an IBM.
Solution: Let event I be that the student uses an IBM computer, and M the probability that he uses a
Macintosh.
.20 2
a. P(I | M) = .50 = 5
.20 4
b. P(M | I) = .65 = 13 .
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1) A card is drawn from a deck. Find the conditional 2) A card is drawn from a deck. Find the conditional
probability of P(a queen | a face card). probability of P(a queen | a club).
3) A die is rolled. Find the conditional probability that 4) If P(A) = .3 and P(B) = .4, and P(A and B) = .12,
it shows a three if it is known that an odd number find the following.
has shown.
a) P(A | B)
b) P(B | A)
The following table shows the distribution of Democratic and Republican U.S. Senators by gender.
5) P(M | D) 6) P(D | M)
7) P(F | R) 8) P(R | F)
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9) At De Anza College, 20% of the students take 10) At a college, 60% of the students pass Accounting,
Finite Math, 30% take History, and 5% take both 70% pass English, and 30% pass both of these
Finite Math and History. If a student is chosen at courses. If a student is selected at random, find the
random, find the following conditional following conditional probabilities.
probabilities.
a) He passes Accounting given that he passed
a) He is taking Finite Math given that he is taking English.
History.
11) If P(F) = .4 and P(E | F) = .3, find P(E and F). 12) If P(E) = .3, and P(F) = .3, and E and F are
mutually exclusive, find P(E | F).
13) If P(E) = .6 and P(E and F) = .24, find P(F | E). 14) If P(E and F) = .04 and P(E | F) = .1, find P(F).
15) P(two boys | first born is a boy) 16) P(all girls | at least one girl is born)
17) P(children of both sexes | first born is a boy) 18) P(all boys | there are children of both sexes)
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204 Chapter 7: Probability
a. The card is a king. b. The card is a king given that a red card has shown.
Two Events E and F are independent if and only if at least one of the following
two conditions is true.
1. P(E | F) = P(E) or 2. P(F | E) = P(F)
If the events are not independent, then they are dependent.
Next, we need to develop a test to determine whether two events are independent.
We recall the conditional probability formula.
P(E F)
P(E | F) = P(F)
Multiplying both sides by P(F), we get
P(E F) = P(E | F) P(F)
Now if the two events are independent, then by definition
P(E | F) = P(E)
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Chapter 7: Probability 205
Example 2 The table below shows the distribution of color-blind people by gender.
Solution: According to the test, C and M are independent if and only if P(C M) = P(C)P(M).
P(C) = 7/100, P(M) = 52/100 and P(C M) = 6/100
P(C) P(M) = (7/100)(52/100) = .0364
and P(C M) = .06
Clearly .0364 ≠ .06
Therefore, the two events are not independent. We may say they are dependent.
Example 3 In a survey of 100 women, 45 wore makeup, and 55 did not. Of the 45 who wore makeup, 9
had a low self-image, and of the 55 who did not, 11 had a low self-image. Are the events
"wearing makeup" and "having a low self-image" independent?
Solution: Let M be the event that a woman wears makeup, and L the event that a woman has a low self-
image. We have
P(M L) = 9/100, P(M) = 45/100 and P(L) = 20/100
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The two events "wearing makeup" and "having a low self-image" are independent.
Example 4 A coin is tossed three times, and the events E, F and G are defined as follows:
E: The coin shows a head on the first toss.
F: At least two heads appear.
G: Heads appear in two successive tosses.
Determine whether the following events are independent.
a. E and F b. F and G c. E and G
Solution: To make things easier, we list the sample space, the events, their intersections and the
corresponding probabilities.
S = {HHH, HHT, HTH, HTT, THH, THT, TTH, TTT}
E = {HHH, HHT, HTH, HTT}, P(E) = 4/8 or 1/2
F = {HHH, HHT, HTH, THH}, P(F) = 4/8 or 1/2
G = {HHT, THH}, P(G) = 2/8 or 1/4
E F= {HHH, HHT, HTH}, P(E F) = 3/8
F G = {HHT, THH}, P(F G) = 2/8 or 1/4
E G = {HHT} P(E G) = 1/8
a. In order for E and F to be independent, we must have
P(E F) = P(E) P(F).
But 3/8 ≠ 1/2 . 1/2
Therefore, E and F are not independent.
b. F and G will be independent if
P(F G) = P(F) P(G).
Since 1/4 ≠ 1/2 . 1/4
F and G are not independent.
c. We look at
P(E G) = P(E) P(G)
1/8 = 1/2 . 1/4
Therefore, E and G are independent events.
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Chapter 7: Probability 207
Example 5 The probability that Jaime will visit his aunt in Baltimore this year is .30, and the probability
that he will go river rafting on the Colorado river is .50. If the two events are independent,
what is the probability that Jaime will do both?
Solution: Let A be the event that Jaime will visit his aunt this year, and R be the event that he will go
river rafting.
We are given P(A) = .30 and P(R) = .50, and we want to find P(A R).
Since we are told that the events A and R are independent,
P(A R) = P(A) P(R) = (.30)(.50) = .15.
P(A B)
Solution: By definition P(B | A) = P(A)
Substituting, we have
P(A B)
.5 = .7
Therefore, P(A B) = .35
Example 8 Given P(A) =.5, P(A B ) = .7, if A and B are independent, find P(B).
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1) P(F) 2) P(M | F)
a) P(E) a) P(F)
b) P(F) b) P(G)
c) P(E F) c) P(F G)
7) If P(E) = .6, P(F) = .2, and E and F are 8) If P(E) = .6, P(F) = .2, and E and F are
independent, find P(E and F). independent, find P(E or F).
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CHAPTER 7 PROBLEM SETS Name:_________________________________
9) If P(E) = .9, P(F | E) = .36, and E and F are 10) If P(E) = .6, P(E or F) = .8, and E and F are
independent, find P(F). independent, find P(F).
11) In a survey of 100 people, 40 were casual drinkers, 12) It is known that 80% of the people wear seat belts,
and 60 did not drink. Of the ones who drank, 6 had and 5% of the people quit smoking last year. If 4%
minor headaches. Of the non-drinkers, 9 had of the people who wear seat belts quit smoking, are
minor headaches. Are the events "drinkers" and the events, wearing a seat belt and quitting
"had headaches" independent? smoking, independent?
13) John's probability of passing statistics is 40%, and 14) Jane is flying home for the Christmas holidays. She
Linda's probability of passing the same course is has to change planes twice on the way home. There
70%. If the two events are independent, find the is an 80% chance that she will make the first
following probabilities. connection, and a 90% chance that she will make
the second connection. If the two events are
a) P( both of them will pass statistics)
independent, find the following probabilities.
a) P( Jane will make both connections)
b) P(F) b) P(G)
c) P(E F) c) P(F G)
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15) Five cards are drawn from a deck. Find the probability of obtaining
a) four cards of a single suit
b) two cards of one suit, two of another suit, and one from the remaining
c) a pair(e.g. two aces and three other cards)
d) a straight flush(five in a row of a single suit but not a royal flush)
16) The following table shows a distribution of drink preferences by gender.
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CHAPTER 8
More Probability
In this chapter, you will learn to:
1. Find the probability of a binomial experiment.
2. Find probabilities using Bayes' Formula.
3. Find the expected value or payoff in a game of chance.
4. Find probabilities using tree diagrams.
Binomial Experiment
A binomial experiment satisfies the following four conditions:
1. There are only two outcomes, a success or a failure, for each trial.
2. The same experiment is repeated several times.
3. The trials are independent; that is, the outcome of a particular trial does not
affect the outcome of any other trial.
4. The probability of success remains the same for every trial.
The probability model that we are about to investigate will give us the tools to solve many
real-life problems like the ones given below.
1. If a coin is flipped 10 times, what is the probability that it will fall heads 3 times?
2. If a basketball player makes 3 out of every 4 free throws, what is the probability that he
will make 7 out of 10 free throws in a game?
3. If a medicine cures 80% of the people who take it, what is the probability that among the
ten people who take the medicine, 6 will be cured?
4. If a microchip manufacturer claims that only 4% of his chips are defective, what is the
probability that among the 60 chips chosen, exactly three are defective?
5. If a telemarketing executive has determined that 15% of the people contacted will
purchase the product, what is the probability that among the 12 people who are contacted,
2 will buy the product?
We now consider the following example to develop a formula for finding the probability of k
successes in n Bernoulli trials.
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220 Chapter 8: More Probability
Example 1 A baseball player has a batting average of .300. If he bats four times in a game, find the
probability that he will have
a. four hits b. three hits c. two hits d. one hit e. no hits.
Solution: Let us suppose S denotes that the player gets a hit, and F denotes that he does not get a hit.
This is a binomial experiment because it meets all four conditions. First, there are only two
outcomes, S or F. Clearly the experiment is repeated four times. Lastly, if we assume that
the player's skillfulness to get a hit does not change each time he comes to bat, the trials are
independent with a probability of .3 of getting a hit during each trial.
We draw a tree diagram to show all situations.
Let us first find the probability of getting, for example, two hits. We will have to consider the
six possibilities, SSFF, SFSF, SFFS, FSSF, FSFS, FFSS, as shown in the above tree diagram.
We list the probabilities of each below.
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Section 8.1: Binomial Probability 221
Outcome Four Hits Three Hits Two Hits One Hit No Hits
Probability (.3)4 4 (.3)3(.7) 6 4 (.3)(.7)3 (.7)4
(.3)2(.
7)2
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222 Chapter 8: More Probability
Example 2 If a coin is flipped 10 times, what is the probability that it will fall heads 3 times?
Solution: Let S denote the probability of obtaining a head, and F the probability of obtaining a tail.
Clearly, n = 10, k = 3, p = 1/2, and q = 1/2.
Therefore,
b(10, 3; 1/2) = 10C3 (1/2)3(1/2)7
= .1172
Example 3 If a basketball player makes 3 out of every 4 free throws, what is the probability that he will
make 6 out of 10 free throws in a game?
Solution: The probability of making a free throw is 3/4. Therefore, p = 3/4, q = 1/4, n = 10, and k = 6.
Therefore,
b(10, 6; 3/4) = 10C6 (3/4)6(1/4)4 = .1460
Example 4 If a medicine cures 80% of the people who take it, what is the probability that of the eight
people who take the medicine, 5 will be cured?
Example 5 If a microchip manufacturer claims that only 4% of his chips are defective, what is the
probability that among the 60 chips chosen, exactly three are defective?
Solution: If S denotes the probability that the chip is defective, and F the probability that the chip is not
defective, then p = .04, q = .96, n = 60, and k = 3.
b(60, 3; .04) = 60C3 (.04)3(.96)57 = .2138
Example 6 If a telemarketing executive has determined that 15% of the people contacted will purchase
the product, what is the probability that among the 12 people who are contacted, 2 will buy
the product?
Solution: If S denoted the probability that a person will buy the product, and F the probability that the
person will not buy the product, then p = .15, q = .85, n = 12, and k = 2.
b(12, 2, .15) = 12C2 (.15)2(.85)10 = .2924.
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1) A coin is tossed ten times. Find the probability of 2) A family has three children. Find the probability of
getting six heads and four tails. having one boy and two girls.
3) What is the probability of getting three aces(ones) if 4) A baseball player has a .250 batting average. What
a die is rolled five times? is the probability that he will have three hits in five
times at bat?
5) A basketball player has an 80% chance of sinking a 6) With a new flu vaccination, 85% of the people in
basket on a free throw. What is the probability that the high risk group can go through the entire winter
he will sink at least three baskets in five free without contracting the flu. In a group of six
throws? people who were vaccinated with this drug, what is
the probability that at least four will not get the flu?
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CHAPTER 8 PROBLEM SETS Name:_________________________________
7) A transistor manufacturer has known that 5% of the 8) It has been determined that only 80% of the people
transistors produced are defective. What is the wear seat belts. If a police officer stops a car with
probability that a batch of twenty five will have two four people, what is the probability that at least one
defective? person will not be wearing a seat belt?
9) What is the probability that a family of five children 10) What is the probability that a toss of four coins will
will have at least three boys? yield at most two heads?
11) A telemarketing executive has determined that for a 12) To the problem: "Five cards are dealt from a deck
particular product, 20% of the people contacted will of cards, find the probability that three of them are
purchase the product. If 10 people are contacted, kings," the following incorrect answer was offered
what is the probability that at most 2 will buy the by a student.
product?
5C3 (1/13)3(12/13)2
What change would you make in the wording of the
problem for the given answer to be correct?
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Section 8.1: Binomial Probability 223
Example 1 Suppose you are given two jars. Jar I contains one black and 4 white marbles, and Jar II
contains 4 black and 6 white marbles. If a jar is selected at random and a marble is chosen,
a. What is the probability that the marble chosen is a black marble?
b. If the chosen marble is black, what is the probability that it came from Jar I?
c. If the chosen marble is black, what is the probability that it came from Jar II?
Solution: Let J I be the event that Jar I is chosen, J II be the event that Jar II is chosen, B be the event
that a black marble is chosen and W the event that a white marble is chosen.
We illustrate using a tree diagram.
a. The probability that a black marble is chosen is P(B) = 1/10 + 2/10 = 3/10.
b. To find P(J I | B), we use the definition of conditional probability, and we get
P(J I B) 1/10 1
P(J I | B) = P(B) = 3/10 = 3
P(J II B) 2/10 2
c. Similarly, P(J II | B) = P(B) = 3/10 = 3
In parts b and c, the reader should note that the denominator is the sum of all probabilities of
all branches of the tree that produce a black marble, while the numerator is the branch that is
associated with the particular jar in question.
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224 Chapter 8: More Probability
P(J I B)
P(J I | B) = P(B)
Therefore,
P(J I) . P(B | J I)
P(J I | B) = P(B)
or,
P(J I) . P(B | J I)
P(J I | B) =
P(J I) . P(B | J I) + P(J II) . P(B | J II)
The last statement is Bayes' Formula for the case where the sample space is divided into two
partitions. The following is the generalization of this formula for n partitions.
Page 256
Section 8.1: Binomial Probability 225
Let S be a sample space that is divided into n partitions, A1, A2, . . . An. If E is any
event in S, then
Example 2 A department store buys 50% of its appliances from Manufacturer A, 30% from
Manufacturer B, and 20% from Manufacturer C. It is estimated that 6% of Manufacturer A's
appliances, 5% of Manufacturer B's appliances, and 4% of Manufacturer C's appliances need
repair before the warranty expires. An appliance is chosen at random. If the appliance
chosen needed repair before the warranty expired, what is the probability that the appliance
was manufactured by Manufacturer A? Manufacturer B? Manufacturer C?
Solution: Let events A, B and C be the events that the appliance is manufactured by Manufacturer A,
Manufacturer B, and Manufacturer C, respectively. Further, suppose that the event R denotes
that the appliance needs repair before the warranty expires.
We need to find P(A | R), P(B | R) and P(C | R).
We will do this problem both by using a tree diagram and by using Bayes' formula.
We draw a tree diagram.
The probability P(A | R), for example, is a fraction whose denominator is the sum of all
probabilities of all branches of the tree that result in an appliance that needs repair before the
warranty expires, and the numerator is the branch that is associated with Manufacturer A.
P(B | R) and P(C | R) are found in the same way. We list both as follows:
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226 Chapter 8: More Probability
.030 .030
P(A | R) = (.030) + (.015) + (.008) = .053 = .566
.015 .008
P(B | R) = .053 = .283 and P(C | R) = .053 = .151.
P(A)P(R | A)
P(A | R) = P(A)P(R | A) + P(B)P(R | B) + P(C)P(R | C)
.030 .030
= (.030) + (.015) + (.008) = .053 = .566
Example 3 There are five Jacy's department stores in San Jose. The distribution of number of employees
by gender is given in the table below.
Solution: Let k = 1, 2, . . . , 5 be the event that the employee worked at store k, and W be the event that
the employee is a woman. Since there are a total of 1000 employees at the five stores,
P(1) = .30 P(2) = .15 P(3) = .20 P(4) = .25 P(5) = .10
Using Bayes' formula,
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Section 8.1: Binomial Probability 227
P(3)P(W | 3)
P(3 | W) = P(1)P(W | 1) + P(2)P(W | 2) + P(3)P(W | 3) + P(4)P(W | 4) + P(5)P(W | 5)
(.20)(.60)
= (.30)(.40) + (.15)(.65) + (.20)(.60) + (.25)(.50) + (.10)(.70)
= .2254
Page 259
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Name:_________________________________ CHAPTER 8 PROBLEM SETS
1) Jar I contains five red and three white marbles, and 2) In Mr. Symons' class, if a person does his
Jar II contains four red and two white marbles. A homework most days, his chance of passing the
jar is picked at random and a marble is drawn. course is 90%. On the other hand, if a person does
Draw a tree diagram below, and find the following not do his homework most days his chance of
probabilities. passing the course is only 20%. Mr. Symons claims
that 80% of his students do their homework on a
regular basis. If a student is chosen at random from
Mr. Symons' class, find the following probabilities.
b) P(It came from Jar II given that the marble b) P(the student did homework | the student
drawn is white) passes the course)
c) P(Red | Jar I) c) P(the student passes the course | the student did
homework)
3) A city has 60% Democrats, and 40% Republicans. 4) In a certain population of 48% men and 52%
In the last mayoral election, 60% of the Democrats women, 56% of the men and 8% of the women are
voted for their Democratic candidate while 95% of color-blind.
the Republicans voted for their candidate. Which
a) What percent of the people are color-blind?
party's mayor runs city hall?
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CHAPTER 8 PROBLEM SETS Name:_________________________________
5) A test for a certain disease gives a positive result 6) A person has two coins: a fair coin and a two-
95% of the time if the person actually carries the headed coin. A coin is selected at random, and
disease. However, the test also gives a positive tossed. If the coin shows a head, what is the
result 3% of the time when the individual is not probability that the coin is fair?
carrying the disease. It is known that 10% of the
population carries the disease. If the test is positive
for a person, what is the probability that he or she
has the disease?
7) A computer company buys its chips from three 8) Lincoln Union High School District is made up of
different manufacturers. Manufacturer I provides three high schools: Monterey, Fremont, and
60% of the chips and is known to produce 5% Kennedy, with an enrollment of 500, 300, and 200,
defective; Manufacturer II supplies 30% of the respectively. On a given day, the percentage of
chips and makes 4% defective; while the rest are students absent at Monterey High School is 6%, at
supplied by Manufacturer III with 3% defective Fremont 4%, and at Kennedy 5%. If a student is
chips. If a chip is chosen at random, find the chosen at random, find the following probabilities.
following probabilities. Hint: Convert the enrollments into percentages.
b) P(it came from Manufacturer II | the chip is b) P(the student came from Kennedy | the student
defective) is absent)
c) P(the chip is defective | it came from c) P(the student is absent | the student came from
manufacturer III) Fremont)
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228 Chapter 8: More Probability
(80)(8) + (90)(2) 8 2
A= 10 = (80) 10 + (90) 10 = 82
It should be observed that it will be incorrect to take the average of 80 and 90 because
you scored 80 on eight quizzes, and 90 on only two of them. Therefore, you take a
"weighted average" of 80 and 90. That is, the average of 8 parts of 80 and 2 parts of 90,
which is 82.
In the first situation, to find the expected value, we multiplied each payoff by the probability
of its occurrence, and then added up the amounts calculated for all possible cases. In the
second example, if we consider our test score a payoff, we did the same. This leads us to the
following definition.
__________________________________________________________________________
Expected Value
If an experiment has the following probability distribution,
Payoff x1 x2 x3 ... xn
Probability p(x1) p(x2) p(x3) ... p(xn)
then the expected value of the experiment is
Expected Value = x1p(x1) + x2p(x2) + x3p(x3) + . . . + xnp(xn)
__________________________________________________________________________
Page 263
Section 8.1: Binomial Probability 229
Example 1 In a town, 10% of the families have three children, 60% of the families have two children,
20% of the families have one child, and 10% of the families have no children. What is the
expected number of children to a family?
Number of children 3 2 1 0
Probability .10 .60 .20 .10
Expected Value = x1p(x1) + x2p(x2) + x3p(x3) + x4p(x4)
E = 3(.10) + 2(.60) + 1(.20) + 0(.10) = 1.7
So on average, there are 1.7 children to a family.
Example 2 To sell an average house, a real estate broker spends $1200 for advertisement expenses. If
the house sells in three months, the broker makes $8,000. Otherwise, the broker loses the
listing. If there is a 40% chance that the house will sell in three months, what is the expected
payoff for the real estate broker?
Solution: The broker makes $8,000 with a probability of .40, but he loses $1200 whether the house
sells or not.
E = ($8000)(.40) – ($1200) = $2,000.
Alternatively, the broker makes $(8000 – 1200) with a probability of .40, but loses $1200
with a probability of .60. Therefore,
E = ($6800)(.40) – ($1200)(.60) = $2,000.
Example 3 In a town, the attendance at a football game depends on the weather. On a sunny day the
attendance is 60,000, on a cold day the attendance is 40,000, and on a stormy day the
attendance is 30,000. If for the next football season, the weatherman has predicted that 30%
of the days will be sunny, 50% of the days will be cold, and 20% days will be stormy, what is
the expected attendance for a single game?
Example 4 A lottery consists of choosing 6 numbers from a total of 51 numbers. The person who
matches all six numbers wins $2 million. If the lottery ticket costs $1, what is the expected
payoff?
Solution: Since there are 51C6 = 18,009,460 combinations of six numbers from a total of 51 numbers,
the chance of choosing the winning number is 1 out of 18,009,460. So the expected payoff is
1
E = ($2 million)(18009460 ) – $1 = –$0.89
This means that every time a person spends $1 to buy a ticket, he or she can expect to lose 89
cents.
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Name:_________________________________ CHAPTER 8 PROBLEM SETS
Do the following problems using the expected value concepts learned in this section,
1) You are about to make an investment which gives 2) In a town, 40% of the men and 30% of the women
you a 30% chance of making $60,000 and 70% are overweight. If the town has 46% men and 54%
chance of losing $ 30,000. Should you invest? women, what percent of the people are overweight?
Explain.
3) A game involves rolling a Korean die(4 faces). If a 4) A game involves rolling a single die. One receives
one, two, or three shows, the player receives the the face value of the die in dollars. How much
face value of the die in dollars, but if a four shows, should one be willing to pay to roll the die to make
the player is obligated to pay $4. What is the the game fair?
expected value of the game?
5) In a European country, 20% of the families have 6) A game involves drawing a single card from a
three children, 40% have two children, 30% have standard deck. One receives 60 cents for an ace, 30
one child, and 10% have no children. On average, cents for a king, and 5 cents for a red card that is
how many children are there to a family? neither an ace nor a king. If the cost of each draw
is 10 cents, should one play? Explain.
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CHAPTER 8 PROBLEM SETS Name:_________________________________
7) Hillview Church plans to raise money by raffling a 8) During her four years at college, Niki received A's
television worth $500. A total of 3000 tickets are in 30% of her courses, B's in 60% of her courses,
sold at $1 each. Find the expected value of the and C's in the remaining 10%. If A = 4, B = 3, and
winnings for a person who buys a ticket in the C = 2, find her grade point average.
raffle.
9) Attendance at a Stanford football game depends 10) A Texas oil drilling company has determined that it
upon which team Stanford is playing against. If the costs $25,000 to sink a test well. If oil is hit, the
game is against U. C. Berkeley, the attendance will revenue for the company will be $500,000. If
be 70,000; if it is against another California team, it natural gas is found, the revenue will be $150,000.
will be 40,000; and if it is against an out of state If the probability of hitting oil is 3% and of hitting
team, it will be 30,000. If the probability of playing gas is 6%, find the expected value of sinking a test
against U. C. Berkeley is 10%, against a California well.
team 50% , and against an out of state team 40%,
how many fans are expected to attend a game?
11) A $1 lottery ticket offers a grand prize of $10,000; 12) Assume that for the next heavyweight fight the odds
10 runner-up prizes each paying $1000; 100 third- of Mike Tyson winning are 15 to 2. A gambler bets
place prizes each paying $100; and 1,000 fourth- $10 that Mike Tyson will lose. If Mike Tyson loses,
place prizes each paying $10. Find the expected how much can the gambler hope to receive?
value of entering this contest if 1 million tickets are
sold.
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Example 1 A person has four keys and only one key fits to the lock of a door. What is the probability
that the locked door can be unlocked in at most three tries?
Solution: Let U be the event that the door has been unlocked and L be the event that the door has not
been unlocked. We illustrate with a tree diagram.
The probability of unlocking the door in the second try = (3/4)(1/3) = 1/4
The probability of unlocking the door in the third try = (3/4)(2/3)(1/2) = 1/4
Therefore, the probability of unlocking the door in at most three tries = 1/4 + 1/4 + 1/4 = 3/4.
Example 2 A jar contains 3 black and 2 white marbles. We continue to draw marbles one at a time until
two black marbles are drawn. If a white marble is drawn, the outcome is recorded and the
marble is put back in the jar before drawing the next marble. What is the probability that we
will get exactly two black marbles in at most three tries?
The probability that we will get two black marbles in the first two tries is listed adjacent to
the lowest branch, and it = 3/10.
The probability of getting first black, second white, and third black = 3/20.
Similarly, the probability of getting first white, second black, and third black = 3/25.
Therefore, the probability of getting exactly two black marbles in at most three tries = 3/10 +
3/20 + 3/25 = 57/100.
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Example 3 A circuit consists of three resistors: resistor R1, resistor R2, and resistor R3, joined in a series.
If one of the resistors fails, the circuit stops working. If the probability that resistors R1, R2,
or R3 will fail is .07, .10, and .08, respectively, what is the probability that at least one of the
resistors will fail?
Solution: Clearly, the probability that at least one of the resistors fails = 1 – none of the resistors fails.
It is quite easy to find the probability of the event that none of the resistors fails. We don't
even need to draw a tree because we can visualize the only branch of the tree that assures this
outcome.
The probabilities that R1, R2, R3 will not fail are .93, .90, and .92 respectively. Therefore,
the probability that none of the resistors fails = (.93)(.90)(.92) = .77.
Thus, the probability that at least one of them will fail = 1 – .77 = .23.
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1) Suppose you have five keys and only one key fits to 2) A coin is tossed until a head appears. What is the
the lock of a door. What is the probability that you probability that a head will appear in at most three
can open the door in at most three tries? tries?
3) A basketball player has an 80% chance of making a 4) You are to play three games. In the first game, you
basket on a free throw. If he makes the basket on draw a card, and you win if the card is a heart. In
the first throw, he has a 90% chance of making it the second game, you toss two coins, and you win if
on the second. However, if he misses on the first one head and one tail are shown. In the third game,
try, there is only a 70% chance he will make it on two dice are rolled and you win if the sum of the
the second. If he gets two free throws, what is the dice is 7 or 11. What is the probability that you win
probability that he will make at least one of them? all three games? What is the probability that you
win exactly two games?
5) John's car is in the garage, and he has to take a bus 6) For a real estate exam the probability of a person
to get to school. He needs to make all three passing the test on the first try is .70. The
connections on time to get to his class. If the chance probability that a person who fails on the first try
of making the first connection on time is 80%, the will pass on each of the successive attempts is .80.
second 80%, and the third 70%, what is the chance What is the probability that a person passes the test
that John will make it to his class on time? in at most three attempts?
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7) On a Christmas tree with lights, if one bulb goes 8) The Long Life Light Bulbs claims that the
out, the entire string goes out. If there are twelve probability that a light bulb will go out when first
bulbs on a string, and the probability of any one used is 15%, but if it does not go out on the first use
going out is .04, what is the probability that the the probability that it will last the first year is 95%,
string will not go out? and if it lasts the first year, there is a 90%
probability that it will last two years. What is the
probability that a new bulb will last two years?
9) A die is rolled until an ace (1) shows. What is the 10) If there are four people in a room, what is the
probability that an ace will show on the fourth try? probability that no two have the same birthday?
11) Dan forgets to set his alarm 60% of the time. If he 12) It has been estimated that 20% of the athletes take
hears the alarm, he turns it off and goes back to some type of drugs. A drug test is 90% accurate,
sleep 20% of the time, and even if he does wake up that is, the probability of a false-negative is 10%.
on time, he is late getting ready 30% of the time. Furthermore, for this test the probability of a false-
What is the probability that Dan will be late to positive is 20%. If an athlete tests positive, what is
school? the probability that he is a drug user?
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produces 70% of the cars and 4% of those are defective. A car is chosen at random. Find the following
probabilities:
a) P(The car is defective) b) P(It came from Factory III | the car is defective)
15) A multiple-choice test has five choices to a question and only one of them is correct. If a student does his
homework, he has a 90% of chance of getting the correct answer. Suppose there is a 70% chance that the
student will do his homework, what will his test score be on this test?
16) A game involves rolling a pair of dice. One receives the sum of the face value of both dice in dollars. How
much should one be willing to pay to roll the dice to make the game fair?
17) A roulette wheel consists of numbers 1 through 36, 0, and 00. If the wheel comes up an odd number you win
a dollar, otherwise you lose a dollar. If you play the game ten times, what is your expectation?
18) A student takes a 100-question multiple-choice exam in which there are four choices to each question. If the
student is just guessing the answers, what score can he expect?
19) Mr. Shaw invests 50% of his money in stocks, 30% in mutual funds, and the remaining 20% in bonds. If the
annual yield from stocks is 10%, from mutual funds 12%, and from bonds 7%, what percent return can Mr.
Shaw expect on his money?
20) An insurance company is planning to insure a group of surgeons against medical malpractice. Its research
shows that two surgeons in every fifteen are involved in a medical malpractice suit each year where the
average award to the victim is $450,000. How much minimum annual premium should the insurance
company charge each doctor?
21) In an evening finite math class of 30 students, it was discovered that 5 students were of age 20, 8 students
were about 25 years old, 10 students were close to 30, 4 students were 35, 2 students were 40 and one student
55. What is the average age of a student in this class?
22) Jar I contains 4 marbles of which one is red, and Jar II contains 6 marbles of which 3 are red. Katy selects a
jar and then chooses a marble. If the marble is red, she gets paid 3 dollars, otherwise she loses a dollar. If
she plays this game ten times, what is her expected payoff?
23) Jar I contains 1 red and 3 white, and Jar II contains 2 red and 3 white marbles. A marble is drawn from Jar I
and put in Jar II. Now if one marble is drawn from Jar II, what is the probability that it is a red marble?
24) Let us suppose there are three traffic lights between your house and the school. The chance of finding the
first light green is 60%, the second 50%, and the third 30%. What is the probability that on your way to
school, you will find at least two lights green?
25) Sonya has just earned her law degree and is planning to take the bar exam. If her chance of passing the bar
exam is 65% on each try, what is the probability that she will pass the exam in at least three tries?
26) Every time Ken Griffey is at bat, his probability of getting a hit is .3, his probability of walking is .1, and his
probability of being struck out is .4. If he is at bat three times, what is the probability that he will get two hits
and one walk?
27) Jar I contains 4 marbles of which none are red, and Jar II contains 6 marbles of which 4 are red. Juan first
chooses a jar and then from it he chooses a marble. After the chosen marble is replaced, Mary repeats the
same experiment. What is the probability that at least one of them chooses a red marble?
28) Andre and Pete are two tennis players with equal ability. Andre makes the following offer to Pete: We will
not play more than four games, and anytime I win more games than you, I am declared a winner and we stop.
Draw a tree diagram and determine Andre's probability of winning.
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CHAPTER 9
Markov Chains
In this chapter, you will learn to:
1. Write transition matrices for Markov Chain problems.
2. Find the long term trend for a Regular Markov Chain.
3. Solve and interpret Absorbing Markov Chains.
The reader should observe that a transition matrix is always a square matrix because all
possible states must have both rows and columns. All entries in a transition matrix are non-
negative as they represent probabilities. Furthermore, since all possible outcomes are
considered in the Markov process, the sum of the row entries is always 1.
Example 1 Professor Symons either walks to school, or he rides his bicycle. If he walks to school one
day, then the next day, he will walk or cycle with equal probability. But if he bicycles one
day, then the probability that he will walk the next day is 1/4. Express this information in a
transition matrix.
Solution: We obtain the following transition matrix by properly placing the row and column entries.
Note that if, for example, Professor Symons bicycles one day, then the probability that he will
walk the next day is 1/4, and therefore, the probability that he will bicycle the next day is 3/4.
Next Day
Walk Bicycle
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Example 2 In Example 1, if it is assumed that the first day is Monday, write a matrix that gives
probabilities of a transition from Monday to Wednesday.
Solution: Let W denote that Professor Symons walks and B denote that he rides his bicycle.
We use the following tree diagram to compute the probabilities.
The probability that Professor Symons walked on Wednesday given that he walked on
Monday can be found from the tree diagram, as listed below.
P(Walked Wednesday | Walked Monday) = P(WWW) + P(WBW) = 1/4 + 1/8 = 3/8.
P(Bicycled Wednesday | Walked Monday) = P(WWB) + P(WBB) = 1/4 + 3/8 = 5/8.
P(Walked Wednesday | Bicycled Monday) = P(BWW) + P(BBW) = 1/8 + 3/16 = 5/16.
P(Bicycled Wednesday | Bicycled Monday) = P(BWB) + P(BBB) = 1/8 + 9/16 = 11/16.
We represent the results in the following matrix.
Wednesday
Walk Bicycle
Alternately, this result can be obtained by squaring the original transition matrix.
We list both the original transition matrix T and T2 as follows:
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Chapter 9: Markov Chains 243
1/2 1/2
T = 1/4 3/4
1/4+1/8 1/4+3/8
= 1/8+3/16 1/8+9/16
3/8 5/8
= 5/16 11/16
The reader should compare this result with the probabilities obtained from the tree diagram.
Consider the following case, for example,
P(Walked Wednesday | Bicycled Monday) = P(BWW) + P(BBW) = 1/8 + 3/16 = 5/16.
It makes sense because to find the probability that Professor Symons will walk on Wednesday
given that he bicycled on Monday, we sum the probabilities of all paths that begin with B and
end in W. There are two such paths, and they are BWW and BBW.
Solution: In writing a transition matrix from Monday to Thursday, we are moving from one state to
another in three steps. That is, we need to compute T3.
11/32 21/32
T3 = 21/64 43/64
b) To find the transition matrix from Monday to Friday, we are moving from one state to
another in 4 steps. Therefore, we compute T4.
43/128 85/128
T4 = 85/256 171/256
It is important that the student is able to interpret the above matrix correctly. For example,
the entry 85/128, states that if Professor Symons walked to school on Monday, then there is
85/128 probability that he will bicycle to school on Friday.
There are certain Markov chains that tend to stabilize in the long run, and they are the subject
of the next section. It so happens that the transition matrix we have used in all the above
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examples is just such a Markov chain. The next example deals with the long term trend or
steady-state situation for that matrix.
Example 4 Suppose Professor Symons continues to walk and bicycle according to the transition matrix
given in Example 1. In the long run, how often will he walk to school, and how often will he
bicycle?
Solution: As mentioned earlier, as we take higher and higher powers of our matrix T, it should
stabilize.
.333984 666015
T5 = .333007 .666992
.33333397 .66666603
T10 = .33333301 .66666698
1/3 2/3
T20 = 1/3 2/3
Therefore, in the long run, Professor Symons will walk to school 1/3 of the time and bicycle
2/3 of the time.
When this happens, we say that the system is in steady-state or state of equilibrium. In this
situation, all row vectors are equal. If the original matrix is an n by n matrix, we get n vectors
that are all the same. We call this vector a fixed probability vector or the equilibrium
vector E. In the above problem, the fixed probability vector E is [1/3 2/3]. Furthermore, if
the equilibrium vector E is multiplied by the original matrix T, the result is the equilibrium
vector E. That is,
ET = E
or,
1/2 1/2
[ 1/3 2/3 ] 1/4 3/4 = [ 1/3 2/3 ]
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.2 .3 .5 .3 .3 .4
a) .3 -.2 .9 b) .3 .4 .4
.3 .3 .5 0 0 0
2) A survey of American car buyers indicates that if a person buys a Ford, there is a 60% chance that their next
purchase will be a Ford, while owners of a GM will buy a GM again with a probability of .80. The buying
habits of these consumers are represented in the transition matrix below.
Next Purchase
Ford GM
a) The probability that a present owner of a Ford will b) The probability that a present owner of a GM will
buy a GM as his next car. buy a GM as his next car.
c) The probability that a present owner of a Ford will d) The probability that a present owner of a GM will
buy a GM as his third car. buy a GM as his fourth car.
3) Professor Hay has breakfast at Hogee's every morning. He either orders an Egg Scramble, or a Tofu Scramble.
He never orders Eggs on two consecutive days, but if he does order Tofu one day, then the next day he can
order Tofu or Eggs with equal probability.
a) Write a transition matrix for this problem. b) If Professor Hay has Tofu on the first day, what is
the probability he will have Tofu on the second
day?
c) If Professor Hay has Eggs on the first day, what is d) If Professor Hay has Eggs on the first day, what is
the probability he will have Tofu on the third day? the probability he will have Tofu on the fourth day?
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4) A professional tennis player always hits cross-court or down the line. In order to give himself a tactical edge,
he never hits down the line two consecutive times, but if he hits cross-court on one shot, on the next shot he
can hit cross-court with .75 probability and down the line with .25 probability.
a) Write a transition matrix for this problem. b) If the player hit the first shot cross-court, what is
the probability that he will hit the third shot down
the line?
5) The transition matrix for switching political parties in an election year is given below, where Democrats,
Republicans, and Independents are denoted by the letters D, R, and I, respectively.
TO
D R I
D .6 .3 .1
FROM R .3 .6 .1
I .2 .2 .6
a) Find the probability of a Democrat voting b) Find the probability of a Democrat voting
Republican. Republican in the second election.
c) Find the probability of a Republican voting d) Find the probability of a Democrat voting
Independent in the second election. Independent in the third election.
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Chapter 9: Markov Chains 245
Answer: A Markov chain reaches a state of equilibrium if it is a regular Markov chain. A Markov
chain is said to be a regular Markov chain if some power of it has only positive entries.
1 0 0 1
a) A = .3 .7 b) B = .4 .6
Solution: The matrix A is not a regular Markov chain because every power of it has an entry 0 in the
first row, second column position. In fact, we will show that all 2 by 2 matrices that have a
zero in the first row, second column position are not regular. Consider the following matrix
M.
a 0
M = b c
a 0 a 0 a.a+0.b a.0+0.c
M2 = =
b c b c b.a+c.b b.0+c.c
Observe that the first row, second column entry, a . 0 + 0 . c, will always be zero, regardless
of what power we raise the matrix to.
b). The transition matrix B is a regular Markov chain because
.40 .60
B2 = .24 .76
has only positive entries.
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246 Chapter 9: Markov Chains
Question 2 Does the product of an equilibrium vector and its transition matrix always equal the
equilibrium vector? That is, does ET = E?
Answer: At this point, the reader may have already guessed that the answer is yes if the transition
matrix is a regular Markov chain. We try to illustrate with the following example from
section 9.1.
A small town is served by two telephone companies, Mama Bell and Papa Bell. Due to their
aggressive sales tactics, each month 40% of Mama Bell customers switch to Papa Bell, that is,
the other 60% stay with Mama Bell. On the other hand, 30% of the Papa Bell customers
switch to Mama Bell. The transition matrix is given below.
Next Month
Mama Bell Papa Bell
If the initial market share for Mama Bell is 20% and for Papa Bell 80%, we'd like to know
the long term market share for each company.
Let matrix T denote the transition matrix for this Markov chain, and M denote the matrix that
represents the initial market share. Then T and M are as follows:
.60 .40
T = .30 .70 and M = [ .20 .80 ]
Since each month the towns people switch according to the transition matrix T, after one
month the distribution for each company is as follows:
.60 .40
[ .20 .80 ] .30 .70 = [ .36 .64 ]
.60 .40
[ .36 .64 ] .30 .70 = [ .408 .592 ]
.60 .40
[ .408 .592 ] .30 .70 = [ .4224 .5776 ]
.60 .40
[ .4224 .5776 ] .30 .70 = [ .42672 .57328 ]
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Chapter 9: Markov Chains 247
.60 .40
[ 3/7 4/7 ] .30 .70 = [ 3/7 4/7 ]
Once the market share reaches an equilibrium state, it stays the same, that is, ET = E.
This helps us answer the next question.
Question 3 Can the equilibrium vector E be found without raising the transition matrix to large powers?
Answer: The answer to the second question provides us with a way to find the equilibrium vector E.
The answer lies in the fact that ET = E.
Since we have the matrix T, we can determine E from the statement ET = E.
.60 .40
[ e 1–e ]
.30 .70 = [ e 1–e ]
Question 4 Does the long term market share for a Markov chain depend on the initial market share?
Answer: We will show that the final market share distribution for a Markov chain does not depend
upon the initial market share. In fact, one does not even need to know the initial market
share distribution to find the long term distribution. Furthermore, the final market share
distribution can be found by simply raising the transition matrix to higher powers.
Consider the initial market share[ .20 .80 ] , and the transition matrix T =
.60 .40
.30 .70 for Mama Bell and Papa Bell in the above example. Recall we found Tn, for
3/7 4/7
very large n, to be 3/7 4/7 .
3/7 4/7
Clearly, [ .20 .80 ] 3/7 4/7 = [ 3/7 4/7 ]
No matter what the initial market share, the product is [ 3/7 4/7 ] .
If the initial share is [ .10 .90 ] , then
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248 Chapter 9: Markov Chains
3/7 4/7
[ .10 .90 ] 3/7 4/7 = [ 3/7 4/7 ]
3/7 4/7
[ a 1–a ]
3/7 4/7 = [ 3/7(a) + 3/7(1 – a) 4/7(a) + 4/7(1 – a) ] = [ 3/7 4/7 ]
It makes sense, because the entry 3/7(a) + 3/7(1 – a), for example, will always equal 3/7.
Just as the sum of the parts equals the whole, the sum of the parts of 3/7 equals 3/7.
Example 2 Three companies, A, B, and C, compete against each other. The transition matrix T for
people switching each month among them is given by the following transition matrix.
Next Month
Company A Company B Company C
Company A .1 .3 .6
First Month Company B .6 .2 .2
Company C .1 .3 .6
If the initial market share for the companies A, B, and C is [ .25 .35 .40 ] , what is the
long term distribution?
Solution: Since the long term market share does not depend on the initial market share, we can simply
raise the transition market share to a large power and get the distribution.
A Markov chain is said to be a Regular Markov chain if some power of it has only
positive entries.
Let T be a transition matrix for a regular Markov chain.
1. As we take higher powers of T, Tn, as n becomes large, approaches a state of
equilibrium.
2. If M is any distribution vector, and E an equilibrium vector, then MTn = E.
3. Each row of the equilibrium matrix Tn is a unique equilibrium vector E such that
ET = E.
4. The equilibrium distribution vector E can be found by letting ET = E.
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a) 1 0 .6
b) 0
.4
.5 .5 1
.6 0 .4 .2 .4 .4
c) .2 .4 .4 d) .6 .4 0
0 0 0 .3 .2 .5
2) Company I and Company II compete against each other, and the transition matrix for people switching from
Company I to Company II is given below.
TO
Company I CompanyI
I
FROM Company I .3 .7
Company II .8 .2
a) If the initial market share is 40% for Company I b) If this trend continues, what is the long range
and 60% for Company II, what will the market expectation for the market?
share be after 3 steps?
3) Suppose the transition matrix for the tennis player in Exercise 4 of the last section is as follows, where C
denotes the cross-court shots and D denotes down-the-line shots.
Next Shot
C D
Previous Shot C .9 .1
D .7 .3
a) If the player hit the first shot cross-court, what is b) Determine the long term shot distribution.
the probability he will hit the fourth shot cross-
court?
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4) Professor Hay never orders eggs two days in a row, but if he orders tofu one day, then there is an equal
probability that he will order tofu or eggs the next day.
Find the following:
a) If Professor Hay had eggs on Monday, what is the b) Find the long term distribution for breakfast choices
probability that he will have tofu on Friday? for Professor Hay.
5) Many Russians have experienced a sharp decline in their living standards due to President Yeltsin's reforms.
As a result, in the parliamentary elections held in December 1995, Communists and Nationalists made
significant gains, and a new pattern in switching political parties emerged. The transition matrix for such a
change is given below, where Communists, Nationalists, and Reformists are denoted by the letters C, N, and
R, respectively.
TO
C N R
C .5 .4 .1
FROM N .3 .4 .3
R .2 .2 .6
a) If in this election Communists received 25% of the b) What will the distribution be in the third election?
votes, Nationalists 30%, and Reformists the rest
45%, what will the distribution be in the next
election?
c) What will the distribution be in the fourth election? d) Determine the long term distribution.
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Chapter 9: Markov Chains 249
S1 .1 .3 .6
S2 0 1 0
S3 .3 .2 .5
The state S2 is an absorbing state, because the probability of moving from state S2 to state S2
is 1. Which is another way of saying that if you are in state S2, you will remain in state S2.
In fact, this is the way to identify an absorbing state. If the probability in row i and column i ,
pii, is 1, then state Si is an absorbing state.
We begin with an application of absorbing Markov chains to the gambler's ruin problem.
Gambler's Ruin Problem
Example 1 A gambler has $3,000, and she decides to gamble $1,000 at a time at a Black Jack table in a
casino in Las Vegas. She has told herself that she will continue playing until she goes broke
or has $5,000. Her probability of winning at Black Jack is .40. Write the transition matrix,
identify the absorbing states, find the solution matrix, and determine the probability that the
gambler will be financially ruined at a stage when she has $2,000.
Solution: The transition matrix is written below. Clearly the state 0 and state 5K are the absorbing
states. This makes sense because as soon as the gambler reaches 0, she is financially ruined
and the game is over. Similarly, if the gambler reaches $5,000, she has promised herself to
quit and, again, the game is over. The reader should note that p00 = 1, and p55 = 1.
Further observe that since the gambler bets only $1,000 at a time, she can raise or lower her
money only by $1,000 at a time. In other words, if she has $2,000 now, after the next bet she
can have $3,000 with a probability of .40 and $1,000 with a probability of .60.
0 1K 2K 3K 4K 5K
0 1 0 0 0 0 0
1K .60 0 .40 0 0 0
2K 0 .60 0 .40 0 0
3K 0 0 .60 0 .40 0
4K 0 0 0 .60 0 .40
5K 0 0 0 0 0 1
To determine the long term trend, we raise the matrix to higher powers until all the non-
absorbing states are absorbed. This is the called the solution matrix.
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250 Chapter 9: Markov Chains
0 1K 2K 3K 4K 5K
0 1 0 0 0 0 0
1K 195/211 0 0 0 0 16/211
2K 171/211 0 0 0 0 40/211
3K 135/211 0 0 0 0 76/211
4K 81/211 0 0 0 0 130/211
5K 0 0 0 0 0 1
The solution matrix is often written in the following form, where the non-absorbing states are
written as rows on the side, and the absorbing states as columns on the top.
0 5K
1K 195/211 16/211
2K 171/211 40/211
3K 135/211 76/211
4K 81/211 130/211
The table lists the probabilities of getting absorbed in state 0 or state 5K starting from any of
the four non-absorbing states. For example, if at any instance the gambler has $3,000, then
her probability of financial ruin is 135/211.
Example 2 Solve the Gambler's Ruin Problem of Example 1 without raising the matrix to higher powers,
and determine the number of bets the gambler makes before the game is over.
Solution: In solving absorbing states, it is often convenient to rearrange the matrix so that the rows and
columns corresponding to the absorbing states are listed first. This is called the Canonical
form. The transition matrix of Example 1 in the canonical form is listed below.
0 5K 1K 2K 3K 4K
0 1 0 0 0 0 0
5K 0 1 0 0 0 0
1K .60 0 0 .40 0 0
2K 0 0 .60 0 .40 0
3K 0 0 0 .60 0 .40
4K 0 .40 0 0 .60 0
The canonical form divides the transition matrix into four sub-matrices as listed below.
Absorbing Non-absorbing
Absorbing states In O
Non-absorbing states A B
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Chapter 9: Markov Chains 251
The matrix F = (In– B)–1 is called the fundamental matrix for the absorbing Markov chain,
where In is an identity matrix of the same size as B. The i, j-th entry of this matrix tells us the
average number of times the process is in the non-absorbing state j before absorption if it
started in the non-absorbing state i. The matrix F for our problem is listed below.
1K 2K 3K 4K
The Fundamental matrix F helps us determine the average number of games played before
absorption.
According to the matrix, the entry 1.78 in the row 3, column 2 position says that the gambler
will play the game 1.78 times before she goes from $3K to $2K. The entry 2.25 in row 3,
column 3 says that if the gambler now has $3K, she will have $3K on the average 2.25 times
before the game is over.
We now address the question of how many bets will she have to make before she is absorbed,
if the gambler begins with $3K?
If we add the number of games the gambler plays in each non-absorbing state, we get the
average number of games before absorption from that state. Therefore, if the gambler starts
with $3K, the average number of Black Jack games she will play before absorption is
1.07 + 1.78 + 2.25 + .90 = 6.0
That is, we expect the gambler will either have $5,000 or nothing on the 7th bet.
Lastly, we find the solution matrix without raising the transition matrix to higher powers.
The matrix FA gives us the solution matrix.
Which is the same as the following matrix we obtained by raising the transition matrix to
higher powers.
0 5K
1K 195/211 16/211
2K 171/211 40/211
3K 135/211 76/211
4K 81/211 130/211
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We summarize as follows:
In 0
T=
A B
where In is an identity matrix, and 0 is a matrix of all zeros.
b. The fundamental matrix F = (I – B)–1. The fundamental matrix helps us find
the number of games played before absorption.
c. FA is the solution matrix, whose i, j-th entry gives the probability of
absorption in state j while starting in state i.
4. The sum of the entries of a row of the fundamental matrix gives us the expected
number of steps before absorption for the non-absorbing state associated with that
row.
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S1 1 0 0 0
T = S2 .1 .4 .2 .3
S3 0 0 1 0
S4 .4 0 .2 .4
c) Starting from state 4, what is the probability of d) Starting from state 2, what is the probability of
eventual absorption in state 1? eventual absorption in state 3?
2). Two tennis players, Andre and Vijay each with two dollars in their pocket, decide to bet each other $1, for
every game they play. They continue playing until one of them is broke.
Do the following:
a) Write the transition matrix for Andre. b) Identify the absorbing states.
c) Write the solution matrix. d) At a given stage if Andre has $1, what is the chance
that he will eventually lose it all?
3) Repeat the previous problem, if the chance of winning for Andre is .4 and for Vijay .6.
a) Write the transition matrix for Andre. b) Write the solution matrix.
c) If Andre has $3, what is the probability that he will d) If Vijay has $1, what is the probability that he will
eventually be ruined? eventually triumph?
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c) Write the solution matrix. d) If Andre has $4, what is the probability that he will
eventually be ruined?
5) The non-tenured professors at a community college are regularly evaluated. After an evaluation they are
classified as good, bad, or improvable. The "improvable" are given a set of recommendations and are re-
evaluated the following semester. At the next evaluation, 60% of the improvable turn out to be good, 20%
bad, and 20% improvable. These percentages never change and the process continues.
c) Write the solution matrix. d) What is the probability that a professor who is
improvable will eventually become good?
6) A rat is placed in the maze shown below, and it moves from room to room randomly. From any room, the rat
will choose a door to the next room with equal probabilities. Once it reaches room 1, it finds food and never
leaves that room. And when it reaches room 5, it is trapped and cannot leave that room. What is the
probability the rat will end up in room 5 if it was initially placed in room 3?
7) In problem 6, what is the probability the rat will end up in room 1 if it was initially placed in room 2?
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1) Is the matrix given below a transition matrix for a Markov chain? Explain.
.1 .4 .5 .2 .6 .2
a) .5 -.3 .8 b) 0 0 0
.3 .4 .3 .3 .4 .5
2) A survey of computer buyers indicates that if a person buys an Apple computer, there is an 80% chance that
their next purchase will be an Apple, while owners of an IBM will buy an IBM again with a probability of
.70. The buying habits of these consumers are represented in the transition matrix below.
Next Purchase
Apple IBM
Present Apple .80 .20
Purchase IBM .30 .70
a) The probability that a present owner of an Apple will buy an IBM as his next computer.
b) The probability that a present owner of an Apple will buy an IBM as his third computer.
c) The probability that a present owner of an IBM will buy an IBM as his fourth computer.
3) Professor Trayer either teaches Finite Math or Statistics each quarter. She never teaches Finite Math two
consecutive quarters, but if she teaches Statistics one quarter, then the next quarter she will teach Statistics
with a 1/3 probability.
b) If Professor Trayer teaches Finite Math in the Fall quarter, what is the probability that she will teach
Statistics in the Winter quarter.
c) If Professor Trayer teaches Finite Math in the Fall quarter, what is the probability that she will teach
Statistics in the Spring quarter.
4) The transition matrix for switching academic majors each quarter by students at a university is given below,
where Science, Business, and Liberal Arts majors are denoted by the letters S, B, and A, respectively.
TO
S B A
S .6 .3 .1
FROM B .1 .7 .2
A .1 .1 .8
a) Find the probability of a science major switching to a business major during their first quarter.
b) Find the probability of a business major switching to a Liberal Arts major during their second quarter.
c) Find the probability of a science major switching to a Liberal Arts major during their third quarter.
1 0 .2 .4 .4
a) .3 .7 b) .6 .4 0
.3 .2 .5
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6) John Elway, the football quarterback for the Denver Broncos, calls his own plays. At every play he has to
decide to either pass the ball or hand it off. The transition matrix for his plays is given in the following table,
where P represents a pass and H a handoff.
Next Shot
P H
Previous P .6 .4
Shot H .8 .2
a) If John Elway threw a pass on the first play, what is the probability that he will handoff on the third play?
7) Company I, Company II, and Company III compete against each other, and the transition matrix for people
switching from company to company each year is given below.
TO
I II III
I .6 .2 .2
FROM II .3 .5 .2
III .3 .3 .4
Find the following.
a) If the initial market share is 20% for Company I, 30% for Company II and 50% for Company III, what
will the market share be after the next year?
b) If this trend continues, what is the long range expectation for the market?
9) A rat is placed in the maze shown below, and it moves from room to room randomly. From any room, the rat
will choose a door to the next room with equal probabilities. Once it reaches room 1, it finds food and never
leaves that room. And when it reaches room 6, it is trapped and cannot leave that room. What is the
probability that the rat will end up in room 1 if it was initially placed in room 3?
Food
1 2 3
4 5 6
Trap
10) In the above problem, what is the probability that the rat will end up in room 6 if it was initially in room 2?
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CHAPTER 10
Game Theory
In this chapter, you will learn to:
1. Solve strictly determined games.
2. Solve games involving mixed strategies.
Example 1 Robert and Carol decide to play a game using a dime and a quarter. Each chooses one of the
two coins, puts it in their hand and closes their fist. At a given signal, they simultaneously
open their fists. If the sum of the coins is less than thirty five cents, Robert gets both coins,
otherwise, Carol gets both coins. Write the matrix for the game, determine the optimal
strategies for each player, and find the expected payoff for Robert.
Solution: Suppose Robert is the row player, that is, he plays the rows, and Carol is a column player. If
Robert shows a dime and Carol shows a dime, the sum will be less than thirty five cents and
Robert will win ten cents. But, if Robert shows a dime and Carol shows a quarter, the sum
will not be less than thirty five cents and Carol will win ten cents or Robert will lose ten
cents. The following matrix depicts all four cases and their corresponding payoffs for Robert.
Remember a negative value is a loss for Robert and a win for Carol.
Carol
Dime Quarter
The best strategy for Robert is to always show a dime because this way the worst he can do is
lose ten cents. And, the best strategy for Carol is to always show a quarter because that way
the worst she can do is to lose ten cents. If both Robert and Carol play their optimal
strategies, Robert will lose ten cents each time. Therefore, the value of the game is negative
ten cents. u
In the above example, since there is only one fixed optimal strategy for each player,
regardless of their opponent's strategy, we say the game possesses a pure strategy and is
strictly determined.
Next, we formulate a method to find the optimal strategy for each player and the value of the
game. The method involves considering the worst scenario for each player.
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262 Chapter 10: Game Theory
To consider the worst situation, the row player considers the minimum value in each row, and
the column player considers the maximum value in each column. Note that the maximum
value really represents a minimum value for the column player because the game matrix
depicts the payoffs for the row player. We list the method below.
Example 2 Find the saddle points and optimal strategies for the following game.
Column Player
Solution: We find the saddle point by placing an asterisk next to the minimum entry in each row, and
by putting a box around the maximum entry in each column as shown below.
Column Player
Since the second row, first column entry, which happens to be 10, has both an asterisk and a
box, it is a saddle point. This implies that the value of the game is 10, and the optimal
strategy for the row player is to always play row 2, and the optimal strategy for the column
player is to always play column 1. If both players play their optimal strategies, the row player
will win 10 units each time.
The row player's strategy is written as [ 0 1 ] indicating that he will play row 1 with a
probability of 0 and row 2 with a probability of 1. Similarly the column player's strategy is
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Chapter 10: Game Theory 263
1
written as 0 implying that he will play column 1 with a probability of 1, and column 2
with a probability of 0.
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a) 1 2 b) 6 3
-2 3 2 1
-1 -3 2 2 0 -4
c) 0 3 -1 d) 3 4 2
1 -2 4 0 -2 -3
0 2 5 -3 2
f) 3 -1 4
e)
-1 -1
-1 1
3 2
2) Two players play a game which involves holding out one or two fingers simultaneously. If the sum of the
fingers is more than 2, Player II pays Player I the sum of the fingers; otherwise, Player I pays Player II the sum
of the fingers.
a) Write a payoff matrix for Player I. b) Find the optimal strategies for each player and the
value of the game.
3) A mayor of a large city is thinking of running for re-election, but does not know who his opponent is going to
be. It is now time for him to take a stand for or against abortion. If he comes out against abortion rights and
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CHAPTER 10 PROBLEM SETS: Name:_________________________________
his opponent is for abortion, he will increase his chances of winning by 10%. But if he is against abortion and
so is his opponent, he gains only 5%. On the other hand, if he is for abortion and his opponent against, he
decreases his chance by 8%, and if he is for abortion and so is his opponent, he decreases his chance by 12%.
a) Write a payoff matrix for the mayor. b) Find the optimal strategies for the mayor and his
opponent.
4) A man accused of a crime is not sure whether anybody saw him do it. He needs to make a choice of pleading
innocent or pleading guilty to a lesser charge. If he pleads innocent and nobody comes forth, he goes free.
However, if a witness comes forth, the man will be sentenced to 10 years in prison. On the other hand, if he
pleads guilty to a lesser charge and nobody comes forth, he gets a sentence of one year and if a witness comes
forth, he gets a sentence of 3 years.
a) Write a payoff matrix for the accused. b) If you were his attorney, what strategy would you
advise?
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264 Chapter 10: Game Theory
Example 1 Suppose Robert and Carol decide to play a game using a dime and a quarter. At a given
signal, they simultaneously show one of the two coins. If the coins match, Robert gets both
coins, but if they don't match, Carol gets both coins. Determine whether the game is strictly
determined.
To determine whether the game is strictly determined, we look for a saddle point. Again, we
place an asterisk next to the minimum value in each row, and a box around the maximum
value in each column. We get
Carol
Dime Quarter
Since there is no entry that has both an asterisk and a box, the game does not have a saddle
point, and thus it is non-strictly determined.
We wish to devise a strategy for Robert. If Robert consistently shows a dime, for example,
Carol will see the pattern and will start showing a quarter, and Robert will lose. Conversely,
if Carol repeatedly shows a quarter, Robert will start showing a quarter, thus resulting in
Carol's loss. So a good strategy is to throw your opponent off by showing a dime some of the
times and showing a quarter other times. Before we develop an optimal strategy for each
player, we will consider an arbitrary strategy for each and determine the corresponding
payoffs.
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Example 2 Suppose in Example 1, Robert decides to show a dime with .20 probability and a quarter with
.80 probability, and Carol decides to show a dime with .70 probability and a quarter with .30
probability. What is the expected payoff for Robert?
.70
R = [ .20 .80 ] and C =
.30 .
The above table shows that if Robert plays the game with the strategy R =[ .20 .80 ] and
.70
Carol plays with the strategy C = .30 , Robert can expect to lose 7.2 cents for every game.
Alternatively, if we call the game matrix G, then the expected payoff for the row player can
be determined by multiplying matrices R, G and C. Thus, the expected payoff P for Robert is
as follows:
P = RGC
10 –10 .70
P = [ .20 .80 ]
–25 25 .30
= –7.2 cents.
Which is the same as the one obtained from the table.
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Example 3 For the following game matrix G, determine the optimal strategy for both the row player and
the column player, and find the value of the game.
1 –2
G= –3 4
Solution: Let us suppose that the row player uses the strategy R = [ r 1 – r ] . Now if the column
player plays column 1, the expected payoff P for the row player is
P(r) = 1(r) + (–3)(1 – r) = 4r – 3.
Which can also be computed as follows:
1
P(r) = [ r 1–r ]
–3 or 4r – 3.
If the row player plays the strategy [ r 1 – r ] and the column player plays column 2, the
expected payoff P for the row player is
–2
P(r) = [ r 1–r ]
4 = –6r + 4.
Alternatively, we can find the optimal strategy for the row player by, first, multiplying the
row matrix with the game matrix as shown below.
1 –2
[ r 1–r ]
–3 4 = [ 4r – 3 –6r + 4 ]
And then by equating the two entries in the product matrix. Again, we get r = .7, which gives
us the optimal strategy [ .7 .3 ] .
We use the same technique to find the optimal strategy for the column player.
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Chapter 10: Game Theory 267
c
Suppose the column player's optimal strategy is represented by 1–c . We, first,
multiply the game matrix by the column matrix as shown below.
1 –2 c 3c – 2
–3 4 1–c = –7c+4
And then equate the entries in the product matrix. We get
3c – 2 = –7c + 4
c = .6
.6
Therefore, the column player's optimal strategy is .4 .
To find the expected value, V, of the game, we find the product of the matrices R, G and C.
1 –2 .6
V = [ .7 .3 ]
–3 4 .4 .
= –.2
That is, if both players play their optimal strategies, the row player can expect to lose .2 units
for every game.
Example 4 For the game in Example 1, determine the optimal strategy for both Robert and Carol, and
find the value of the game.
Solution: Since we have already determined that the game is non-strictly determined, we proceed to
determine the optimal strategy for the game. We rewrite the game matrix.
10 –10
G= –25 25
c
Let R = [ r 1 – r ] be Robert's strategy, and C =
1–c be Carol's strategy.
To find the optimal strategy for Robert, we, first, find the product RG as below.
10 –10
[ r 1–r ]
–25 25 = [ 35r – 25 –35r + 25 ]
To find the optimal strategy for Carol, we, first, find the following product.
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268 Chapter 10: Game Theory
10 –10 c 20c – 10
–25 25 1–c = –50c +25
We now set the entries equal to each other, and we get,
20c – 10 = –50c + 25
or c = 1/2
1/2
Therefore, the optimal strategy for Carol is 1/2 .
To find the expected value, V, of the game, we find the product RGC.
10 –10 1/2
V = [ 5/7 2/7 ]
–25 25 1/2
=[ 0 ]
If both players play their optimal strategy, the value of the game is zero. In such case, the
game is called fair.
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1) Determine the optimal strategies for both the row player and the column player, and find the value of the
game.
a) -1 1 1
b) -4
-1
1 -1 0
c) 3 -2 -3
d) 1
2
2 4 -4
2) Find the expected payoff for the given game matrix G if the row player plays strategy R, and column player
plays strategy C.
-3 2 1/4 -1 1 2/3
a) G = 1 -4 R = [ 2/3 1/3 ] C = 3/4 b) G = 1 -1 R = [1/3 2/3 ] C = 1/3
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3) Two players play a game which involves holding out one or two fingers simultaneously. If the sum of the
fingers is even, Player II pays Player I the sum of the fingers. If the sum of the fingers is odd, Player I pays
Player II the sum of the fingers.
a) Write a payoff matrix for Player I. b) Find the optimal strategies for both the row player
and the column player, and the value of the game.
4) In December 1995, President Clinton ordered the first of 20,000 U. S. troops to be sent into Bosnia-
Herzegovina as a peace keeping force. Unfortunately, the heavy fog made visibility very poor at the Tuzla
airfield, and at the same time increased the threat of sniper attacks from the Serbian forces. U. S. Air Force
Col. Neal Patton, and Lt. Col. Sid Kooyman, the advance specialists, had two choices: either to send in the
troops by air with the difficulties already described or by road thus exposing the troops to ambush by the
Serbian forces. The Serbian army, with its limited resources, had a choice of deploying its forces near the
airport or along the road route.
If the U. S. lands its troops on the airfield in the fog while the Serbs are concentrating on the road route, the
payoff for U. S. is 20 points. But if the U. S. lands its troops on the airfield, and Serbians are there hiding in
the fog, U. S. wins only 5 points. On the other hand, if U. S. transports its troops by road and avoids Serbs its
payoff is 35 points, but if U. S. meets Serb resistance on the road route, it loses 50 points.
a) Write a payoff matrix for the game. b) If you were Air Force Col. Neal Patton's advisor,
what advice would you give him?
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Chapter 10: Game Theory 269
Example 1 For the following game, determine the optimal strategy for both the row player and the
column player, and find the value of the game.
-2 6 4
G= -1 -2 -3
1 2 -2
Solution: We first look for a saddle point and determine that none exist. Next, we try to reduce the
matrix to a 2 2 matrix by eliminating the dominated row.
Since every entry in row 3 is larger than the corresponding entry in row 2, row 3 dominates
row 2. Therefore, a rational row player will never play row 2, and we eliminate row 2. We
get
-2 6 4
1 2 -2
Now we try to eliminate a column. Remember that the game matrix represents the payoffs for
the row player and not the column player; therefore, the larger the number in the column, the
smaller the payoff for the column player.
The column player will never play column 2, because it is dominated by both column 1 and
column 3. Therefore, we eliminate column 2 and get the modified matrix, M, below.
-2 4
M = 1 -2
To find the optimal strategy for both the row player and the column player, we use the
method learned in section 10.2.
Let the row player's strategy be R = [ r 1 – r ] , and the column player's be strategy be C
c
= 1–c .
To find the optimal strategy for the row player, we, first, find the product RM as below.
-2 4
[ r 1–r ]
1 -2 = [ -3r + 1 6r – 2 ]
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270 Chapter 10: Game Theory
or r = 1/3.
Therefore, the optimal strategy for the row player is [ 1/3 2/3 ] , but relative to the original
game matrix it is [ 1/3 0 2/3 ] .
To find the optimal strategy for the column player we, first, find the following product.
-2 4 c –6c + 4
1 -2 1–c = 3c – 2
We set the entries in the product matrix equal to each other, and we get,
–6c + 4 = 3c – 2
or c = 2/3
2/3
Therefore, the optimal strategy for the column player is 1/3 , but relative to the original
2/3
game matrix, the strategy for the column player is 0 .
1/3
To find the expected value, V, of the game, we have two choices: either to find the product
of matrices R, M and C, or multiply the optimal strategies relative to the original matrix to the
original matrix. We choose the first, and get
-2 4 2/3
V = [ 1/3 2/3 ]
1 -2 1/3
=[ 0 ]
Therefore, if both players play their optimal strategy, the value of the game is zero.
We summarize as follows:
Reduction by Dominance
1. Sometimes an m n game matrix can be reduced to a 2 2 matrix by deleting
dominated rows and columns.
2. A row is called a dominated row if there exists another row that will produce a
payoff of an equal or better value. That happens when there exists a row whose
every entry is larger than the corresponding entry of the dominated row.
3. A column is called a dominated column if there exists another column that will
produce a payoff of an equal or better value. This happens when there exists a
column whose every entry is smaller than the corresponding entry of the
dominated row.
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2 -1 2 3
1) 0 3 2) 4 5
-2 0 5 4
1 3 -2 0 1 1
3) -2 9 4 4) 0 1 2
-5 0 1 1 2 4
3 1 3
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2 0 -4 8 -1 3 2 4
6) 1 2 0 5
5)
0 -6 -6 2
2 -2 4 6
-2 -4 -8 0
-5 -1 -1 3 1 -3 -4 1
7)
-10 1 2 -8 8)
1 -4 -1 3
4 0 1 5 1 1 -1 1
3 -8 0 5 0 -1 1 1
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2 3 0 3 -1
a) 3 4 b) 1 3 -2
-1 2 -5
4 2
d)
3 2 -1 -1 3
c) 5 4
3 4 3
1 -3
2) Two players play a game which involves holding out a nickel or a dime simultaneously. If the sum of the
coins is more than 10 cents, Player I gets both the coins; otherwise, Player II gets both the coins.
b) Find the optimal strategies for each player and the value of the game.
3) Lacy's department store is thinking of having a major sale in the month of February, but does not know if its
competitor store Hordstrom's is also planning one. If Lacy's has a sale and Hordstrom's does not, Lacy's sales
go up by 30%, but if both stores have a sale simultaneously, Lacy's sales go up by only 5%. On the other
hand, if Lacy's does not have a sale and Hordstrom's does, Lacy's loses 5% of its sales to Hordstrom's, and if
neither of the stores has a sale, Lacy's experiences no gain in sales.
4) Mr. Halsey has a choice of three investments: Investment A, Investment B, and Investment C. If the
economy booms, then Investment A yields 14% return, Investment B returns 8%, and Investment C 11%. If
the economy grows moderately, then Investment A yields 12% return, Investment B returns 11%, and
Investment C 11%. If the economy experiences a recession, then Investment A yields a 6% return,
Investment B returns 9%, and Investment C 10%.
5) Mr. Thaggert is trying to decide whether to invest in stocks or in CD's(Certificate of deposit). If he invests in
stocks and the interest rates go up, his stock investments go down by 2%, but he gains 1% in his CD's. On
the other hand if the interest rates go down, he gains 3% in his stock investments, but he loses 1% in his
CD's.
b) If you were his investment advisor, what strategy would you advise?
6) Determine the optimal strategies for both the row player and the column player, and find the value of the
game.
2 -2 -2 2
a) -2 2 b) 5 0
3 5 -2 5
c) 4 -1 d) 4 -3
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7) Find the expected payoff for the given game matrix G if the row player plays strategy R, and the column
player plays strategy C.
3 5 1/4
a) G = 4 -1 R = [ 1/2 1/2 ] C = 3/4
-2 5 1/3
b) G = 4 -3 R = [ 2/3 1/3 ] C = 2/3
8) A group of thieves are planning to burglarize either Warehouse A or Warehouse B. The owner of the
warehouses has the manpower to secure only one of them. If Warehouse A is burglarized the owner will lose
$20,000, and if Warehouse B is burglarized the owner will lose $30,000. There is a 40% chance that the
thieves will burglarize Warehouse A and 60% chance they will burglarize Warehouse B. There is a 30%
chance that the owner will secure Warehouse A and 70% chance he will secure Warehouse B. What is the
owner's expected loss?
9) Two players play a game which involves holding out a nickel or a dime. If the sum of the coins is odd, Player
I gets both the coins, and if the sum of the coins is even, Player II gets both the coins. Determine the optimal
strategies for both the row player and the column player, and find the expected payoff.
10) A football quarterback has to choose between a pass play or a run play depending on how the defending team
is going to react. If he chooses a pass play and the defending team is expecting a pass, he expects to gain 4
yards, but if the defending team is expecting a run, he gains 20 yards. On the other hand, if he calls a run
play and the defending team expects a pass, he gains 7 yards, and if he calls a run play and the defending
team expects a run, he loses 2 yards. If you were the quarterback, what would your strategy be?
11) The Watermans go fishing every weekend either at Eel River or at Snake River. Unfortunately, so do the
Nelsons. If both families show up at Eel River, the Watermans can hope to catch only 3 fish, but if the
Watermans fish at Eel River and the Nelsons at Snake River, the Watermans can catch as many as 12 fish.
On the other hand, if both families fish at Snake river, the Watermans can catch about 5 fish, and if
Watermans fish at Snake river while the Nelsons fish at Eel river, the Watermans can catch up to 15 fish.
Determine a mixed strategy for the Watermans, and the expected payoff.
12) Terry knows there is a quiz tomorrow, but does not remember whether it is in his math class or in his biology
class. He has time to study for only one subject. If he studies math and there is a quiz in it, he gains 10
points and even if there is no quiz he gains two points for acquiring the extra knowledge which he will apply
towards the final exam. If he studies biology and there is a quiz in it, he gains ten points but there is no gain
if there is no quiz. Determine a mixed strategy for Terry, and the expected payoff.
13) Reduce the payoff matrix by dominance. Find the optimal strategy for each player and the value of the game.
1 2 3
-3 1 2
b)
4 1 4
a) -3 5 3
2 4 -1 2 3 4
1 2 2
4 3 9 7
c)
-7 -5 -3 5 2 3 1 5
d) -2 3
-1 4 5 8 2 1
-3 -5 1 -1
0 3 2 1 1 0 2 2
e) f)
0 2 1 -7 2 2 0 2
-4 -9 5 4 2 -3 0 4
4 -7 6 6 2 -2 -3 2
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CHAPTERS 1 – 10
Answers To Odd-numbered
Problems
1.1 Graphing a Linear Equation
1). Yes 3). (2, –6), (6, 6), (0, –12), (4, 0)
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310 Answers To Odd-numbered Problems
1.4 Applications
1). y = 25x + 1200 3). y = 20x + 350 5). y = 80x + 24000
7). y = 2/5 x; 68 9). y = 7x – 338; 138 11). F = 9/5 C + 32; 77oF
13). y = 3/7x + 17; 38.43 15). y = 7500x + 45000; $307,500
18 15 84
1). 14 13 3). 68
12 9 54
7 20 -1 11 28 22
5). -2 -5 5 7). 6 13 6
0 10 1 8 20 15
40 72 61 ma+nc mb+nd
9). 38 33 23 11). pa+qc pb+qd
39 63 51
4 -5 x 6 2 0 3 x 17
13). 5 -6 y = 7 15). 3 -2 0 y = 10
0 5 2 z 11
2 5 1 2 -1
3). 1 3 5). -1 -3 2
-1 -1 1
7). (4, 2) 9). (3, 3, 4)
11). If a matrix M has an inverse, then the system of linear equations that has M as its
coefficient matrix has a unique solution. If a system of linear equations has a unique
solution, then the number of equations must be the same as the number of variables.
Therefore, the matrix that represent its coefficient matrix must be a square matrix.
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312 Answers To Odd-numbered Problems
71 66 78 87 114
1). 24 23 35 36 47
12 11 19 14 15 27 4
5). 51 67 95 105 87 91 67
9 2 14 -11 -3 18 -23
7). HEAD FOR THE HILLS
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Answers To Odd -Numbered Problems 313
315.34
1). (t, –2t, t) 3). Chris = $1250, Ed = $1,000 5). 383.52
440.34
1000 400 15
1). a. 800 500 20 b. [ 30 50]
2 1 1 -3 -9 11
2). a. 2 1 -1 b. 7 -14 9
-2 8 0 -5 10 2
3). a. -2 4 6 b. -7 4 7
-4 6 6 -8 9 7
2 -2 4
9 -3
4). a. 14 16 -22 b. 6 -3
8 10 -14
5 -3 1 -2 1
12. a. -3 2 b. -1 1 0
1 1 -1
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314 Answers To Odd-numbered Problems
22 59 74 22 60 17 57 74 39 65
14). a. 33 68 75 49 74 b. 37 78 91 42 92
1 27 27 4 21 5 15 27 9 27
17). Chris = 34.1 hrs, Bob = 32.2 hrs, Matt = 35.2 hrs
1). 30 units of Food A and 45 units of Food B should be purchased to keep costs at a
minimum of $105.
3). Cost: C = 12,000 x + 10,000 y
I. 200 x + 100 y ≥ 800 high-grade oil
II. 300 x + 100 y ≥ 900 medium-grade oil
III. 200 x + 200 y ≥ 1000 low-grade oil
Refinery A should be operated for 3 days, while Refinery B should be operated for 2
days to keep a minimum cost of $56,000.
1). (16000, 4000); $2240 2). (2, 3); $23,000 3). (8, 20); $320
4). (12000, 8000) 5). (72, 180; $5760 6). (165, 35); $21,750
7). (20, 60); $34 8). (20, 20); $2.40 9). (6, 18); $1650
10). (35, 100; $2600 11). (40, 20); $100,000 12). (10, 5): 17.5 minutes
13). (1000, 800); $7400
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Answers To Odd -Numbered Problems 315
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316 Answers To Odd-numbered Problems
11). $112,552.26
6.1 Sets
6.3 Permutations
1). 60 3). 210 5). 362,880 7). 25,200
9). 900 11). 48 13). 72 15). 2,400
6.5 Combinations
1). 120 3). 10 5). 2,598,960
7). 66 9). 10 11). 20
13). 6 15). 924
5).
1 2 3 4 5 6
1 (1, 1) (1, 2) (1, 3) (1, 4) (1, 5) (1, 6)
2 (2, 1) (2, 2) (2, 3) (2, 4) (2, 5) (2, 6)
3 (3, 1) (3, 2) (3, 3) (3, 4) (3, 5) (3, 6)
4 (4, 1) (4, 2) (4, 3) (4, 4) (4, 5) (4, 6)
5 (5, 1) (5, 2) (5, 3) (5, 4) (5, 5) (5, 6)
6 (6, 1) (6, 2) (6, 3) (6, 4) (6, 5) (6, 6)
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Answers To Odd -Numbered Problems 319
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320 Answers To Odd-numbered Problems
0 1
1). a. No b. No 3). a. 1/2 1/2 b. 1/2 c. 1/2 d. 3/4
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Answers To Odd -Numbered Problems 321
2 1/2 1/2
4 2/3 1/3
3). a).
0 1 2 3 4
0 1 0 0 0 0
1 .6 0 .4 0 0
2 0 .6 0 .4 0
3 0 0 .6 0 .4
4 0 0 0 0 1
1 57/65 8/65
2 9/13 4/13
3 27/65 38/65
5). a).
G B I
G 1 0 0
B 0 1 0
I .60 .20 .20
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322 Answers To Odd-numbered Problems
0 1
1). No; no 2). 0.2; 0.3; 0.475 3). a. 2/3 1/3 b. 1 c. 2/3
4). 0.3; 0.31; 0.28 5). No; yes 6). 0.32; P = 2/3, H = 1/3
7). [.36 .34 .30]; [ 3/7 9/28 1/4]
S3 16/35 19/35
S4 26/35 9/35
1). a. The game is strictly determined. Optimal strategy for the row player is to always
play row 1 and never row 2. In other words, his strategy is [ 1 0 ] . The optimal
strategy for the column player is to always to play column 1 and never to play
1
column 2. We write it as 0 . When both players play their optimal strategy,
the value of the game is 1.
c. The game has no saddle point, therefore, it is not strictly determined.
e. The game is strictly determined. The optimal strategy for the row player is to
always play row 4, and never play any other row. We write his strategy as
0
[ 0 0 0 1 ] . The column player's strategy is 1 . The value of the game
is 2.
1
b. The optimal strategy for the mayor is [ 1 0 ] and for his opponenent is
0 .
In other words, both candidates should oppose abortion rights.
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Answers To Odd -Numbered Problems 323
1). a. The optimal strategy for the row player is [ 1/2 1/2 ] . The optimal strategy for
1/2
the column player is 1/2 . The value of the game 0.
c. Optimal strategy for the row player is [ 2/7 5/7 ] . The optimal strategy for the
6/7
column player is 1/7 . The value of the game is 16/7.
3). a. 2 –3
–3 4
b. Optimal strategy for the row player is [ 7/12 5/12 ] The optimal strategy
7/12
for the column player is 5/12 . The value of the game is –1/12.
2/3
3). 1 -2 , R = [ 2/3 1/3 0 ] , C = 0 , The value = 0
-2 4 1/3
0
5). 0 -4
[ .6 0 .4 0 ] , C =
.8 , The value = –0.8
-2 4 ,R= .2
0
0
7). 2 -8
0 2/7 5/7 0 ] , C =
0
1 5 ,R= [ 13/14
, The value = 9/7
1/14
1 0
1). a. R = [ 0 1 ] , C= b. R = [ 1 0 0 ] ,C= 0
0 , value = 3 1
v = –1
0 0
c. R = [ 0 1 ] , C = 1 , value= 3 d. R = [ 0 0 1 0 ] ,C=
0 1 v=3
-5 10 1
2). a. 5 10 b. R = [ 0 1 ] , C=
0 , value = 5 cents
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324 Answers To Odd-numbered Problems
5 30 1
3). a. -5 0 b. R = [ 1 0 ] C = 0 , value = 5%
-.02 .03
5). a. .01 -.01 b. stocks = 2/7, CD's = 5/7
1/2 2/9
6). a. [ 1/2 1/2 ] , , value = 0 b. [ 5/9 4/9 ] , , value = 10/9
1/2 7/9
6/7 4/7
c. [ 5/7 2/7 ] , 1/7 , value = 23/7
d. [ 1/2 1/2 ] ,
3/7
, value = 1
2/3
7). 19/8; 14/9 8). $11,000 9). [ 1/2 1/2 ] ,
1/3 , v = 0
10). Pass = 9/25, Run = 16/25 11). [ 10/19 9/19 ] , payoff = 9.58 fish
12). [ 1 0 ] , payoff = 2 points
-3 3 4/9
13). a. 2 -1 , [
0 1/3 2/3 ] , 0 , value = 1/3
5/9
4 1 1/2
b. 2 3 ,[
0 1/4 3/4 0 ] , 1/2 , value = 5/2
0
1/6
4 3 5/6
c. -1 4 , [ 5/6 0 1/6 0 ] , , value = 19/6
0
0
0
2 1 0
d. -2 3/4 1/4 ] , , value = 1
1 ,[ 1
0
10/14
0 3 4/14
e. 4 11/14 0 0 3/14 ] ,
-7 , [ 0
, value = 6/7
0
0
0 2 1/2
f. 2 1/2 1/2 0 0 ] , , value = 1
0 ,[ 1/2
0
1
45). 46). .4 47). 0
0
1 4
2 .6 .4
3 .2 .8
1/6
48). [ 1/3 2/3 ] 49). 5/6 50). –.35
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