Thread: Recurrence relation for amount in account at end of n years if no money withdrawn.

1. Recurrence relation for amount in account at end of n years if no money withdrawn.

A deposit of 50000 O.R.is maid to an investment fund at the beginning of a year.On the last day of each year two dividends are awarded.The first dividend is 20% of the amount in the account during that year. The second dividend is 45% of the amount in the account in the previous year.

(a)Find a recurrence relation for {pn}, where pn is the amount in the account at the end of n years if no money is ever withdrawn.

hope someone can help me, and thanks in advance.

2. You didn't specify where you were stuck, so i'll assume its at the first step.

The amount of money at the end of year n is going to be the amount of money at the end of the previous year + dividends received in that year.

3. Originally Posted by mujix
A deposit of 50000 O.R.is maid to an investment fund at the beginning of a year.On the last day of each year two dividends are awarded.The first dividend is 20% of the amount in the account during that year. The second dividend is 45% of the amount in the account in the previous year.

(a)Find a recurrence relation for {pn}, where pn is the amount in the account at the end of n years if no money is ever withdrawn.

hope someone can help me, and thanks in advance.
Let $p_n$ be the amount in the account at the end of the $n$ th year.

Now you need to write $p_{n+1}$ in terms of $p_n$ and $p_{n-1}$.

Try that let us know how you get on and what problems you are still having.

CB