Introduction

Probability has a dual aspect: on the one

hand the likelihood of hypotheses given
the evidence for them, and on the other
hand the behavior of stochastic
processes such as the throwing of dice or
coins. The study of the former is
historically older in, for example, the law
of evidence, while the mathematical
treatment of dice began with the work
of Cardano, Pascal and Fermat between
the 16th and 17th century.Probability
Distribution is one of the subfield of
probability.

Part 1
a.

A Short History of Probability

The mathematical theory

of probability has its roots in attempts to
analyze games of chance by Gerolamo
Cardano in the sixteenth century, and
by Pierre de Fermat and Blaise Pascal in
the seventeenth century (for example the
"problem of points"). Christiaan

Huygens published a book on the subject

in 1657[5] and in the 19th century a big
work was done by Laplace in what can be
considered today as the classic
interpretation.
Initially, probability theory mainly
considered discrete events, and its
methods were mainly combinatorial.
Eventually, analytical considerations
compelled the incorporation
of continuous variables into the theory.
This culminated in modern probability
theory, on foundations laid by Andrey
Nikolaevich Kolmogorov. Kolmogorov
combined the notion of sample space,
introduced by Richard von Mises,
and measure theory and presented
his axiom system for probability theory in
1933. Fairly quickly this became the
mostly undisputed axiomatic basis for
modern probability theory but
alternatives exist, in particular the
adoption of finite rather than countable
additivity by Bruno de Finetti.

b.

The theory of

Discrete probability distribution

Discrete probability theory deals with
events that occur in countable sample
spaces.
Examples: Throwing dice, experiments
with decks of cards, and random walk.
Classical definition: Initially the
probability of an event to occur was
defined as number of cases favorable for
the event, over the number of total
outcomes possible in an equiprobable
sample space.
For example, if the event is "occurrence
of an even number when a die is rolled",
the probability is given by
, since 3
faces out of the 6 have even numbers and
each face has the same probability of
appearing.
Modern definition: The modern definition
starts with a set called the sample space,
which relates to the set of all possible
outcomes in classical sense, denoted
by
. It is then assumed that for
each element
, an intrinsic

"probability" value
is attached, which
satisfies the following properties:
1.
2.
That is, the probability function f(x) lies
between zero and one for every value
of x in the sample space , and the sum
of f(x) over all values x in the sample
space is exactly equal to 1. An event is
defined as
any subset of the
sample space .
The probability of the
event defined as

So, the probability of the entire sample

space is 1, and the probability of the null
event is 0.
The function
mapping a point in the
sample space to the "probability" value is
called a probability mass
function abbreviated as pmf. The modern
definition does not try to answer how
probability mass functions are obtained;

instead it builds a theory that assumes

their existence.
Continuous probability distributions
Continuous probability theory deals with
events that occur in a continuous sample
space.
Classical definition: The classical
definition breaks down when confronted
with the continuous case. See Bertrand's
paradox.
Modern definition: If the sample space is
the real numbers ( ), then a function
called the cumulative distribution
function (or cdf) is assumed to exist,
which gives
for a random
variable X. That is, F(x) returns the
probability that X will be less than or
equal to x.
The cdf must satisfy the following
properties.
1. is a monotonically nondecreasing, right-continuous
function;

2.
3.
If is differentiable, then the random
variable X is said to have a probability
density function or pdf or
simply density
For a set
, the probability of the
random variable X being in is defined as

In case the probability density function

exists, this can be written as

Whereas the pdf exists only for

continuous random variables,
the cdf exists for all random variables
(including discrete random variables)
that take values on
These concepts can be generalized
for multidimensional cases on and other
continuous sample spaces.

Part 4
i.

Definition of compound interest

Compound interest is interest calculated

on the initial principal and also on the
accumulated interest of previous periods
of a deposit or loan. Compound interest
can be thought of as interest on
interest, and will make a deposit or loan
grow at a faster rate than simple interest,
which is interest calculated only on the
principal amount. The rate at which
compound interest accrues depends on
the frequency of compounding; the
higher the number
of compounding periods, the greater the
compound interest. Thus, the amount of
compound interest accrued on $100
compounded at 10% annually will be
lower than that on $100 compounded at
5% semi-annually over the same time
period. Compound interest is also known
as compounding.
The addition of interest to the principal
sum of a loan or deposit is
called compounding. Compound
interest is interest on interest. It is the
result of reinvesting interest, rather than
paying it out, so that interest in the next

period is then earned on the principal

sum plus previously-accumulated
interest. Compound interest is standard
in finance and economics.
Compound interest may be contrasted
with simple interest, where interest is not
added to the principal, so there is no
compounding. The simple annual interest
rate is the interest amount per period,
multiplied by the number of periods per
year. The simple annual interest rate is
also known as the nominal interest
rate(not to be confused with nominal as
opposed to real interest rates).

Further Exploration
a. Linear programming
Linear programming (LP) (also
called linear optimization) is a method to
achieve the best outcome (such as
maximum profit or lowest cost) in
a mathematical model whose
requirements are represented by linear
relationships. Linear programming is a
special case of mathematical

programming (mathematical
optimization).
Linear programming was developed as
a discipline in the 1940's, motivated
initially by the need to solve complex
planning problems in wartime operations.
Its development accelerated rapidly in
the postwar period as many industries
found valuable uses for linear
programming. The founders of the
subject are generally regarded as George
B. Dantzig, who devised the simplex
method in 1947, and John von Neumann,
who established the theory of duality that
same year. The Nobel prize in econonmics
was awarded in 1975 to the
mathematician Leonid Kantorovich
(USSR) and the economist Tjalling
Koopmans (USA) for their contributions to
the theory of optimal allocation of
resources, in which linear programming
played a key role. Many industries use
linear programming as a standard tool,
e.g. to allocate a finite set of resources in
an optimal way. Examples of important
application areas include airline crew

scheduling, shipping or
telecommunication networks, oil refining
and blending, and stock and bond
portfolio selection.
It is important to solve these types of
problems and in many fields like
economics, business and operations
research, is quite useful. There are many
benefits of linear programming for
business Solve the business problems.
With linear programming we can
easily solve business problem. It is very
benefited for increase the profit or
decrease the cost of business.
Easy work of manager under limitations
and condition.Linear programming solve
problem under different limitions and
conditions , so It is easy for manager to
work under limitations and conditions . It
helps manager to decide in different
limitations. Use in solving staffing
problems.With linear programming , we
can calculate the number of staff needed
in hospitals ,mines , hotels and other
type of business.
Helpful in profit planning.Today linear

programming is using for good profit

planning.Select best advertising
media.With linear programming we can
select best advertising media among a
numbers of media. Solve the diet
problems.With linear programming you
can solve the diet problems with
minimum cost. It is very useful for
hospitals .There are different elements
like vitamins, proteins, carbohydrates
etc. You can select best quantity of them
with minimum cost.
One of the example of linear
programming in real life is solve the
transportation problem.A company has
a stock of goods allocated
in m storehouses. The goods is to be
delivered ton customers, each of which is
requesting a certain quantity of the
goods. (It is supposed that the quantity
of the goods in the storehouses is
sufficient to cover the customers
requests.) The transportation cost of one
unit of the goods from the storehouse
no. i to the customer
no. j is cij fori = 1, 2, , m and j = 1, 2,

, n. The goal is to make up

a transportation plan so that the requests
of the customers are met and the total
transportation costs are minimal.
Next , it minimize of production
costs.A company produces n different
kinds of goods. It has received orders
from customers to supply certain
quantity of each kind of the goods. The
company produces the goods
by m activities (processes). Each of the
activities no. 1, 2, , m produces all the
kinds of the goods no. 1, 2, , n in
a certain ratio. (For example, the
distillation of crude oil yields petrol, oil,
paraffin oil, asphalt, The production of
iron in the blast furnace yields iron as
well as slag, which can be used in
building industry. And so forth.) The unit
production costs of the i-th activity
are ci. The goal is to make up an optimal
production programme, i.e., to determine
the production level of the activities, so
that the orders of the customers are met
and the total production costs are
minimal.

Reflection
This coursework means a lot to me
because I was able to learn many
stuffsthroughout this coursework. By
conducting this coursework, I was able to
learnon how to practically apply

mathematical skills in real-life situations.

Thus, itprovided me a better
understanding of the topics which are
being discussed inthis project work.
Apart from that, this coursework has
also enhanced my skills in terms
oftechnology. I had to virtually draw
charts, graphs and type out
variousmathematical equations which
needs some kind of knowledge in
computers -this coursework has provided
me that knowledge.
This coursework has also taught me to
be independent. Everything thatcan be
seen in this coursework - words, graphs,
charts, and equations aregenuinely
drawn and typed by myself though I had
referred some sources toensure my work
is correct. To some degree, the fact that
this work of mine isgenuine satisfies me.
Indirectly, I consider this coursework
as a revision for my
upcomingexamination. It is because,
while carrying out this task, I had to

revise previoustopics in order to

complete this work.