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Start by reading and following these instructions:

1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.

2. Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.

3. Consider the discussion and the any insights you gained from it.

4. Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

Answer these essay questions:

1. Calculating Future Values – You have $20,000 you want to invest for the next 40 years. You are offered an investment plan that will pay you 7 percent per year for the first 20 years and 11 percent per year for the last 20 years. How much will you have at the end of the 40 years? Does it matter if the investment plan pays you 11 percent per year for the first 20 years and 7 percent per year for the next 20 years? Why or why not?

2. Finding the time necessary until you pay off a loan is simple if you make equal payments each month. However, when paying off credit cards many individuals only make the minimum monthly payment, which is generally 2% to 3% of the balance or $10 whichever is greater. Locate the credit card calculator at www.fincalc.com and work out this exercise:

You currently owe $10,000 on a credit card with a 17% interest rate and a minimum payment of $10 or 2% of your balance.

– How soon will you pay off this debt if you make the minimum payment each month?

– How much total interest will you pay using that method?

– Calculate how soon you would pay off this debt if you paid $100 per monthly payment.

3. Find the retirement calculator at www.moneychimp.com to answer the following questions. Suppose you have $1,500,000 when you retire and want to withdraw an equal amount each year for the next 30 years.

– How much can you withdraw each year if you earn 7%

– What if you can earn 9%?

– What if the market failed and your earnings dropped to -.5%. How long would it take to drain your account if you did nothing about this loss pattern?

This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals:

– Years until retirement: 30

– Amount to withdraw each year: $90,000

– Years to withdraw in retirement: 20

– Interest rate: 8%

Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into her account for her retirement fund.

a. If she starts making these deposits in one year and makes her last deposit on the day she retires, what amount must she deposit annually to be able to make the desired withdrawals at retirement?

b. Suppose your friend just inherited a large sum of money. Rather than making equal annual payments, she decided to make one lump-sum deposit today to cover her retirement needs. What amount does she have to deposit today?

c. Suppose your friend’s employer will contribute to the account each year as part of the company’s profit-sharing plan. In addition, your friend expects a distribution from a family trust several years from now. What amount must she deposit annually now to be able to make the desired withdrawals at retirement?

– Employer’s annual contribution: $1,500

– Years until trust fund distribution: 20

– Amount of trust fund distribution: $25,000

4. Time value of money. In our opening case study, why would the Toyota Motor Credit Corporation (TMCC) be willing to accept such a small amount today ($1,163) in exchange for a promise to repay about 9 times that amount ($10,000) in the future (30 years)?

– Would you—why or why not? Outline the considerations you used in making your answer.

– Would your answer depend on who is making the promise to repay? Explain your conclusions.

Midterm Test

The midterm test is over chapters 1-5.  Please use this template and answer the questions on this form.  Place your name at the top of this page prior to submitting (or add a cover page to this paper),

 

1. For each of the datasets note if data privacy is an important issue
   1. Census data collected from 1900- 1950
   2. IP addresses and visit times of web users who visit your website.
   3. Images from Earth orbiting satellites
   4. Names and addresses of people from the telephone book
   5. Names and email addresses collected from the web.

 

2. Classify the following attributes as binary, discrete, or continuous. Also classify them as qualitative (nominal or ordinal) or quantitative (interval or ratio). Some cases may have more than one interpretation, so briefly indicate your reasoning if you think there may be some ambiguity.

Example: Age in years. Answer: Discrete, quantitative, ratio

 

(a) Time in terms of AM or PM.

(b) Brightness as measured by a light meter.

(c) Brightness as measured by people’s judgments.

(d) Angles as measured in degrees between 0◦ and 360◦.

(e) Bronze, Silver, and Gold medals as awarded at the Olympics.

(f) Height above sea level.

(g) Number of patients in a hospital.

(h) ISBN numbers for books. (Look up the format on the Web.)

(i) Ability to pass light in terms of the following values: opaque, translucent, transparent.

(j) Military rank.

(k) Distance from the center of campus.

(l) Density of a substance in grams per cubic centimeter.

(m) Coat check number. (When you attend an event, you can often give your coat to someone who, in turn, gives you a number that you can use to claim your coat when you leave.)

 

3. Which of the following quantities is likely to show more temporal autocorrelation: daily rainfall or daily temperature? Why?
4. Distinguish between noise and outliers. Be sure to consider the following questions.
   1. Is noise ever interesting or desirable? Outliers?
   2. Can noise objects be outliers?
   3. Are noise objects always outliers?
   4. Are outliers always noise objects?
   5. Can noise make a typical value into an unusual one, or vice versa?
5. Discuss the advantages and disadvantages of using sampling to reduce the number of data objects that need to be displayed. Would simple random sampling (without replacement) be a good approach to sampling? Why or why not?
6. How might you address the problem that a histogram depends on the number and location of the bins?
7. Show that the entropy of a node never increases after splitting it into smaller successor nodes.
8. Compute a two-level decision tree using the greedy approach described in this chapter. Use the classification error rate as the criterion for splitting. What is the overall error rate of the induced tree?
9. Consider a binary classification problem with the following set of attributes and attribute values:

 

• Air Conditioner = {Working, Broken}
• Engine = {Good, Bad}
• Mileage = {High, Medium, Low}
• Rust = {Yes, No}

Suppose a rule-based classifier produces the following rule set:

Mileage = High −→ Value = Low

Mileage = Low −→ Value = High

Air Conditioner = Working, Engine = Good −→ Value = High

Air Conditioner = Working, Engine = Bad −→ Value = Low

Air Conditioner = Broken −→ Value = Low (

 

1. a) Are the rules mutually exclusive? Answer: No
2. b) Is the rule set exhaustive? Answer: Yes
3. c) Is ordering needed for this set of rules? Answer: Yes because a test instance may trigger more than one rule.
4. d) Do you need a default class for the rule set? Answer: No because every instance is guaranteed to trigger at least one rule. 46 Chapter 5 Classification: Alternative Technique
5. Consider the one-dimensional data set shown below:

 

X	.5	3.0	4.5	4.6	4.9	5.2	5.3	5.5	7.0	9.5
Y	–	–	+	+	+	–	–	+	–	–

 

 

• Classify the data point x = 5.0 according to its 1-, 3-, 5-, and 9-nearest neighbors (using majority vote).
• Repeat the previous analysis using the distance-weighted voting approach.

 

In a 4-6-page APA formatted written report (and a minimum of six [6] peer-reviewed sources), address the following:

1. Analyze two examples of how the Internet of Things benefits organizations (public sector, private sector, for-profit, or not-for-profit).
2. Analyze two specific business uses of Internet of Things and RFID technology.