Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the formula to solve the question. I just need help with 1) and 2) Equation 9.2. Sums of Arithmetic and Geometric Sequence-r - TheaumSoftherstntermaofanarithmeticaequenceek=c+{ir1)darlrzlis

Use the formula to solve the question. I just need help with 1) and 2)

image text in transcribedimage text in transcribed
Equation 9.2. Sums of Arithmetic and Geometric Sequence-r - TheaumSoftherstntermaofanarithmeticaequenceek=c+{ir1)darlrzlis While we have made an honest effort to derive the formulas in Equation 9.2, formal proofs require the machinery in Section 9.3. An application of the arithmetic sum formula which proves useful in lCalculus results in formula for the sum of the rst n natural numbers. The natural numbers themselves are a sequence{1 1, 2, 3, . .. which is arithmetic with o = d = 1. Applying Equation 9.2, n{n+ 1] 2 So, for example, the sum of the rst 1m natural numbers5 is 1au21c1 = . An important application of the geometric sum formula is the investment plan called an annuity. Annuities differ from the lrind of invmtments we studied in Section .5 in that payments are deposited into the account on an on-going basis, and this complicates the mathematics a little. Suppose you have an account with annual interest rate 1* which is compounded n times per year. We let 1' = % denote the interest rate per period. Suppose we wish to malre ongoing deposits of P dollars at the end of each compounding period. Let A], denote the amount in the account after i: compounding periods. Then A, = P, because we have made our rst deposit at the end of the rst compounding period and no interest has been earned. During the second compounding period, we earn interest on A, so that our initial investment has grown to Al + i} = Pf] + i} in accordance with Equation 651. When we add our second payment at the end of the second period, we get 1+2+3+...+ = 1 A:=Ar[l+i]l+P=P{1+i}+P=P{l+i] (14-144) The reason for factoring out the PH + i] will become apparent in short order. During the third compounding period, we earn interest on A: which then grows to Ag] + i}. We add our third \f

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Making Hard Decisions with decision tools

Authors: Robert Clemen, Terence Reilly

3rd edition

538797576, 978-0538797573

More Books

Students also viewed these Mathematics questions