Insurance Data Analysis
1. **Calculate the mean, median, and mode for the ungrouped data.**
Given data: 22, 21, 23, 24, 25, 24, 23, 22, 5, 2, 4, 3, 1, 2, 4, 16, 17, 18, 17, 18, 19, 17, 18, 16, 20, 20, 18, 10, 9, 7, 8, 6, 9, 8, 6, 9, 11, 13, 15, 12, 14, 14, 12, 13, 15, 11, 11, 14, 13, 12
- Number of data points, $n = 50$
- Mean, $\bar{x} = \frac{\sum x_i}{n}$
Calculate sum:
$$\sum x_i = 22+21+23+24+25+24+23+22+5+2+4+3+1+2+4+16+17+18+17+18+19+17+18+16+20+20+18+10+9+7+8+6+9+8+6+9+11+13+15+12+14+14+12+13+15+11+11+14+13+12 = 700$$
So,
$$\bar{x} = \frac{700}{50} = 14$$
- Median: Sort data and find middle value(s).
Sorted data (ascending): 1,2,2,3,4,4,5,6,6,7,8,8,9,9,9,10,11,11,11,12,12,12,13,13,13,14,14,14,15,15,16,16,17,17,17,18,18,18,18,19,20,20,21,22,22,23,23,24,24,25
Since $n=50$ (even), median is average of 25th and 26th values:
25th value = 13, 26th value = 14
Median = $\frac{13+14}{2} = 13.5$
- Mode: The most frequent value(s).
Frequencies:
- 9 appears 3 times
- 11 appears 3 times
- 14 appears 3 times
- 18 appears 4 times (highest)
Mode = 18
2. **Construct a frequency distribution table with class width 4.**
Classes (start from 0 to cover minimum 1):
0-3, 4-7, 8-11, 12-15, 16-19, 20-23, 24-27
Count frequencies:
- 0-3: 1,2,2,3 → 4
- 4-7: 4,4,5,6,6,7 → 6
- 8-11: 8,8,9,9,9,10,11,11,11 → 9
- 12-15: 12,12,12,13,13,13,14,14,14,15,15 → 11
- 16-19: 16,16,17,17,17,18,18,18,18,19 → 10
- 20-23: 20,20,21,22,22,23,23 → 7
- 24-27: 24,24,25 → 3
| Class Interval | Frequency |
|----------------|-----------|
| 0 - 3 | 4 |
| 4 - 7 | 6 |
| 8 - 11 | 9 |
| 12 - 15 | 11 |
| 16 - 19 | 10 |
| 20 - 23 | 7 |
| 24 - 27 | 3 |
3. **Calculate mean, median, and mode for grouped data.**
- Midpoints ($x_i$):
0-3: 1.5, 4-7: 5.5, 8-11: 9.5, 12-15: 13.5, 16-19: 17.5, 20-23: 21.5, 24-27: 25.5
- Multiply midpoints by frequencies:
$1.5 \times 4 = 6$
$5.5 \times 6 = 33$
$9.5 \times 9 = 85.5$
$13.5 \times 11 = 148.5$
$17.5 \times 10 = 175$
$21.5 \times 7 = 150.5$
$25.5 \times 3 = 76.5$
Sum of $f x_i = 6 + 33 + 85.5 + 148.5 + 175 + 150.5 + 76.5 = 675$
Mean grouped:
$$\bar{x} = \frac{\sum f x_i}{n} = \frac{675}{50} = 13.5$$
- Median grouped:
Cumulative frequencies:
0-3: 4
4-7: 10
8-11: 19
12-15: 30
16-19: 40
20-23: 47
24-27: 50
Median class is where cumulative frequency reaches $\frac{n}{2} = 25$, which is 12-15 class.
Median formula:
$$\text{Median} = L + \left( \frac{\frac{n}{2} - F}{f_m} \right) \times c$$
Where:
- $L = 12$ (lower boundary of median class)
- $n = 50$
- $F = 19$ (cumulative frequency before median class)
- $f_m = 11$ (frequency of median class)
- $c = 4$ (class width)
Calculate:
$$\text{Median} = 12 + \left( \frac{25 - 19}{11} \right) \times 4 = 12 + \left( \frac{6}{11} \right) \times 4 = 12 + 2.18 = 14.18$$
- Mode grouped:
Modal class is class with highest frequency = 12-15 (frequency 11)
Mode formula:
$$\text{Mode} = L + \left( \frac{f_1 - f_0}{2f_1 - f_0 - f_2} \right) \times c$$
Where:
- $L = 12$
- $f_1 = 11$ (frequency of modal class)
- $f_0 = 9$ (frequency before modal class, 8-11)
- $f_2 = 10$ (frequency after modal class, 16-19)
- $c = 4$
Calculate:
$$\text{Mode} = 12 + \left( \frac{11 - 9}{2 \times 11 - 9 - 10} \right) \times 4 = 12 + \left( \frac{2}{22 - 19} \right) \times 4 = 12 + \left( \frac{2}{3} \right) \times 4 = 12 + 2.67 = 14.67$$
4. **Compare results:**
| Statistic | Ungrouped Data | Grouped Data |
|-----------|----------------|--------------|
| Mean | 14 | 13.5 |
| Median | 13.5 | 14.18 |
| Mode | 18 | 14.67 |
- The mean and median are close between grouped and ungrouped data, showing grouping smooths data slightly.
- The mode differs more, as grouping affects the most frequent class representation.
Grouping simplifies data but may reduce precision in mode estimation.