The weekly observations on cost of living index in a certain city for the year 2004-2005 are given below. Compute the weekly cost of living index.
Cost of living index:
1400-1500
1500-1600
1600-1700
Number of students:
5
10
20
Cost of living index:
1700-1800
1800-1900
1900-2000
Number of students:
9
6
2
Answers
STEP DEVIATION METHOD:
Step deviation method is used in the cases where the deviation from the assumed mean 'A' are multiples of a common number. If the values of ‘di’ for each class is a multiple of ‘h’ the calculation become simpler by taking ui= di/h = (xi - A )/h
Here, h is the class size of each class interval.
★★ Find the class marks of class interval. These class marks would serve as the representative of whole class and are represented by xi.
★★ Class marks (xi) = ( lower limit + upper limit) /2
★★ We may take Assumed mean 'A’ to be that xi which lies in the middle of x1 ,x2 …..xn
MEAN = A + h ×(Σfiui /Σfi) , where ui = (xi - A )/h
[‘Σ’ Sigma means ‘summation’ ]
FREQUENCY DISTRIBUTION TABLE IS IN THE ATTACHMENT
From the table : Σfiui = 7 , Σfi = 52
Let the assumed mean, A = 1650, h = 100
MEAN = A + h ×(Σfiui /Σfi)
MEAN = 1650 + 100 (7 /52)
= 1650 + 700/52
= 1650 + 350/26
= 1650 + 13.46
= 1663.46
Mean = 1663.46
Hence, the mean is 1663.46
HOPE THIS ANSWER WILL HELP YOU….
We have,
A = 16
h = 100
= 1650 + 100 ( 7/52 )
= 1650 + ( 175/13 )
= 21625 / 13
Hence,
Weekly cost of the living index is 1663.46 Rs.
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Hope it helps !