Robert had $1525 in a savings account 2 yrs ago. What will be the amount of her account 1 yr ago (so 3yrs total), assuming that no deposits or withdrawals are made and the account earns 6.9% interest compounded annually. Write the solution using both a recursive and explicit formula.
2007-08-03 09:38:52 · 3 answers · asked by the man 2 in Science & Mathematics ➔ Mathematics
Write the solution using both a recursive and explicit formula.
2007-08-03 09:52:21 · update #1
$1525 2 years ago
1 year goes by at 6.9% interest
$1525 * 1.069 = $1630.23 1 year ago
also:
$1525 / 1.069 = $1426.57 3 years ago
$1426.57 * 1.069 *1.069 = $1630.23 1 year ago
2007-08-03 09:50:11 · answer #1 · answered by dan 4 · 0⤊ 0⤋
Not 3 years total the way you state it. Let's assume we want to look out three years from the start of her account.
Two years ago she had $1525. After one year she earned interst in the amount of :
Int = 0.069*1525 = $105.23 giving her a total of $1630.23
The next year she earns 6.9% interest on the 1630.23. So a recursive formula might go like:
FV = V0*(1+i)*(1+i)*...*(i+1) where you do this for n years
Shorter version is FV = PV(1+i)^n = 1862.96 where n = 3
2007-08-03 16:51:47 · answer #2 · answered by nyphdinmd 7 · 0⤊ 0⤋
I will assume you mean "1 year from now", for a total of 3 years.
Will also assume you mean "his" account
6.9%=.069
Recursive formula: $1525 x 1.069 x 1.069 x 1.069 = $1862.96
Explicit formula: C = $1525 (1+i)^n
i=.069 and n = 3
Same answer.
2007-08-03 16:53:57 · answer #3 · answered by mr.perfesser 5 · 0⤊ 0⤋