Paper 4: Fundamentals of Business Mathematics & Statistic

6.18 I FUNDAMENTALS OF BUSINESS MATHEMATICS AND STATISTICS

Correlation and Regression

Table : Calculation of Density (X) and Death Rate (Y)

Area in Sq. Km Population in ‘000 No. of deaths X Y

A 300 60 600 200 10

B 360 180 2880 500 16

C 200 80 1120 400 14

D 120 84 1680 700 20

E 240 144 2448 600 17

F 160 48 624 300 13

Table : Calculation of coefficient of correlation

X Y x’ = X – 450 x = x’/50 y = Y – 15 x^2 y^2 xy

A 200 10 -250 -5 -5 25 25 25

B 500 16 50 1 1 1 1 1

C 400 14 -50 -1 -1 1 1 1

D 700 20 250 5 5 25 25 25

E 600 17 150 3 2 9 4 6

F 300 13 -150 -3 -2 9 4 6

∑x 2700= ∑Y 90= x 0= ∑y 0= ∑x 70^2 = y 60^2 = ∑xy 64=

X X

= N

∑

(^2700450)
= 6 =

Y Y^9015

= N = 6 =

∑

2 2

r Xy

x y

= ∑

∑ ∑

r^64 64 64

= 70x 60 = 4200 =64.80

= 0.987