anonymous
  • anonymous
How might interest be described as a problem of sequences?
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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chestercat
  • chestercat
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JamesJ
  • JamesJ
Ok, what's the formula for a geometric series? And what's the formula for compound interest? How do they compare?
JamesJ
  • JamesJ
looks pretty similar to me. What about you?
JamesJ
  • JamesJ
P ---> a 1+i ---> r n ---> n-1

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JamesJ
  • JamesJ
the principle P grows every time period by (1+i). This is just like the growth rate in a geometric series of r, where r > 1.
JamesJ
  • JamesJ
make sense?
JamesJ
  • JamesJ
In a geometric series, suppose a = 100 and r = 1.1. Then after one step, a has grown to ar = 110 One more step and its 121 Now start with $100 and grow it at 10%. After one time period, the $100 has grown to $110 One more time period and we're at $121 etc.
JamesJ
  • JamesJ
The ratio of the value of the principle one time step later is a constant and that constant is 1+i where i is the interest rate. This is just like a geometric series where the ratio of successive terms is constant.

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