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# Application of number: level 3 - Is House Buying a Good Idea or Not?

Extracts from this document...

Introduction

Application of number: level 3

IS House Buying – a Good Idea or Not?

A table to show the data collated for the samples for other houses and first-time buyers’ houses (in ascending order):

 Other houses Price (£) First-time buyers' houses Price (£) 1 32,500 1 18,500 2 35,000 2 29,950 3 37,950 3 37,500 4 39,950 4 39,500 5 44,950 5 39,950 6 46,250 6 39,950 7 54,950 7 39,950 8 64,950 8 41,950 9 64,950 9 43,950 10 65,000 10 44,950 11 71,950 11 46,500 12 74,950 12 46,950 13 82,500 13 49,950 14 87,500 14 50,950 15 89,950 15 51,950 16 94,950 16 51,950 17 110,000 17 52,500 18 110,000 18 52,995 19 131,950 19 53,000 20 139,500 20 54,950 21 145,000 21 54,950 22 145,000 22 55,950 23 149,950 23 57,950 24 175,000 24 69,500 25 175,000 25 69,950 26 195,000 26 70,950 27 195,000 27 72,950 28 210,000 28 79,500 29 215,000 29 79,950 30 249,950 30 84,950

The mean of a set of data is the sum of the values divided by the number of values.

Mean = sum of values / number of values

The range is a measure of spread and the range of a set of data is the difference:

Greatest value – least value

• Mean:         Sum of house prices / 30

= £1,584,445 / 30

= £52,815 (to the nearest £)

• Range:        highest house price – lowest house price

= £84,950 – £18,500

= £66,450 (to the nearest £)

Other houses:

• Mean:         Sum of house prices / 30

= £3,334,600 / 30

= £111,153 (to the nearest £)

• Range:        highest house price – lowest house price

= £249,950 – £32,500

= £217,450 (to the nearest £)

All houses:

• Mean:         Sum of house prices / 60

= £4,919,045/ 60

= £81,984 (to the nearest £)

• Range:        highest house price – lowest house price

= £249,950 – £18,500

= £231,450 (to the nearest £)

All of the calculations have been double checked in order to ensure that they are correct. The data in the tables of the samples was arranged in ascending order in order to be able to easily recognise the highest and lowest values required for calculating the range. The calculations for the means are seemingly correct since they are similar to mean values provided by the Internet. It can be quite simply proved that the mean for all houses is correct as:

Middle

In order to produce the cumulative frequency graphs (for first-time buyers’ houses, other houses and all houses), a cumulative frequency table needs to be made, organising the house prices in ascending order.

 House price (£0000) Cumulative frequency Less than      0 0 1 0 2 1 3 2 4 7 5 13 6 23 7 25 8 29 9 30

Other houses:

 House price (£) Cumulative frequency Less than   0 0 1 0 2 0 3 0 4 4 5 6 6 7 7 10 8 12 9 15 10 16 11 16 12 18 13 18 14 20 15 23 16 23 17 23 18 25 19 25 20 27 21 27 22 29 23 29 24 29 25 30

Conclusion

Accuracy of the graphs and charts were ensured by carrying out the following:

• Using tick marks with lower intervals
• Adding values above bars (on Excel software) and ensuring that they correspond to the data in each of the sample tables.

According to the data for all houses the average house price in my survey (i.e. £81,984) is lower than the average house price for my region (i.e. £88,700). Evidently this difference is not very considerable.

The difference could be due to the following:

• Lack of demand as Leicester may have less to offer as a city (e.g. employment, education, leisure and recreation, low crime rates etc.)
• Inaccuracies in selecting the house prices for the sample, which may be caused by not including enough data or ineffective selective sampling (due to data being selected too randomly).

However the average house price (for all houses) in my survey generally tends

be similar to that of the UK (£81,800).

Generally I think that buying a house in my local area would be a good investment due to the following reasons:

• Average Leicester house prices being only relatively slightly above the national average.
• Leicester house prices having the tendency to increase relatively considerably by about 26% within 2 years.

This student written piece of work is one of many that can be found in our AS and A Level Probability & Statistics section.

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