Hi All,
I feel like I continuously have issues understanding when and how to apply decrements uniformly. For eg. the February 2016 past paper (Paper 2) has a model where children leave and join uniformly. Additionally, weekly fees associated with the average number of children is calculated using an assumption of uniform distribution. My thinking is:
Eg. 24 people join over the course of a year, 50% of those will leave. This means that 2 people join per month... so then 50% *2 = 1 person would be leaving every month. So there should be 6 people by mid year (12 have joined, 6 have left). So if I wanted to calculate the fees for this cohort, it would be 6 people * applicable per child fee * 52 (I think).
The model solution indicates that the 50% should be applied to half of the starting population (24 in my example) = 12*0.5 = 6 and then further if I wanted to calculate the fees associated I would apply 0.5 again to get a result 0f 3. I figure this last bit is because we are trying to calculate the average number of children mid-year, but doesn't my previous answer of 6 already assume that there are 6 children left by mid-year?
Hope this isn't too confusing.
Thanks much.
I feel like I continuously have issues understanding when and how to apply decrements uniformly. For eg. the February 2016 past paper (Paper 2) has a model where children leave and join uniformly. Additionally, weekly fees associated with the average number of children is calculated using an assumption of uniform distribution. My thinking is:
Eg. 24 people join over the course of a year, 50% of those will leave. This means that 2 people join per month... so then 50% *2 = 1 person would be leaving every month. So there should be 6 people by mid year (12 have joined, 6 have left). So if I wanted to calculate the fees for this cohort, it would be 6 people * applicable per child fee * 52 (I think).
The model solution indicates that the 50% should be applied to half of the starting population (24 in my example) = 12*0.5 = 6 and then further if I wanted to calculate the fees associated I would apply 0.5 again to get a result 0f 3. I figure this last bit is because we are trying to calculate the average number of children mid-year, but doesn't my previous answer of 6 already assume that there are 6 children left by mid-year?
Hope this isn't too confusing.
Thanks much.