1. ## Sequences problem.

Hi everyone, I was hoping someone could help with the question attached.

I'm having an issue creating an equation independent of t-1, my answer is completely different to the one in the back of the book.

the formula pt is of the form yt=ayt-1 + b
so the time independent term b/(1-a) is k(3-2pt-1)/1-(1+r)
I then put this value into the formula for the solution of a first order linear recurrence equation.

But the answer in the book is something totally different.

Why do you have a $\displaystyle p_t$ in the $\displaystyle \frac{b}{1-a}$ term?