The Mathematics of Money

612 Chapter 16 Business Statistics

If we follow the same steps to create a column chart, the result would be something like

this:

400

Location

ReputationPrior VisitAmenities

Recommendation

Price

300

350

200

150

50

250

100

0

Line Graphs

Pie charts and bar charts are useful when we need to compare data that is broken into

different categories. Sometimes, though, we are looking at how a quantity changes over

time.

Line graphs are a tool for displaying changes over time. With a line graph, the horizontal

scale is used to represent time, and the vertical scale is used to indicate the value of a quan-

tity. Markers are placed at the appropriate height above each point of time to show the

value of the quantity at that time. It is also common practice to “connect the dots” to fill in

the gaps between points in time that are not part of our data.

How to Create a Line Graph in Excel

1. List the times in column A of a spreadsheet.


2. List the amounts for each time in column B.


3. Select from menus: Insert Chart Line.


4. Click on the chart style of your choice (the default is a basic bar chart).


5. Click on NEXT.


6. Use your mouse to highlight the area of the spreadsheet where your amounts (but not
   your times) are stored.


7. Next to “Series in” select “Columns.”


8. Click on the “Series” tab and click on the fi eld for “Category (X-axis) labels.”


9. Use your mouse to highlight the area of the spreadsheet where your times are
   stored.


10. Click on NEXT.


11. If you wish, you can next enter a title or other formatting, using the options on the next
    screen. (You may want to deselect “Show legend.”)


12. Click on NEXT and the FINISH.

Example 16.1.3 Suppose that the investment managers at Second Law Capital

Management want to illustrate how investments made with their company have performed

over the years. Suppose that a $10,000 investment made at the end of 2003 would have

had a value of $12,350 at the end of 2004, and then $11,795, $13,552, $14,401 and

$12,199 at the end of each successive year. Create a line chart to illustrate this.

Following the instructions given above, we fi rst enter the data into a spreadsheet like

this: