Q:

Which of the following is missing in the explicit formula for the compound interest geometric sequence below?

Accepted Solution

A:
Answer:1+iStep-by-step explanation:The explicit formula for the compound interest geometric tell us: If P1 is invested at an interest rate of i per year, compounded annually, the future value Pn at the end of the nth year is:[tex]Pn=P1(1+i)^{(n-1)}[/tex]For example if you have $10 at 5% at an interest rate of 5% per year.Then if you want to know the amount of money at the end of the 2, 3 and 4 year, you have:n=1 year P1=10n=2 year[tex]P2=10(1+(5/100))[/tex][tex]P2=10(1+(5/100))^{(2-1)}[/tex][tex]P2=10(1+(5/100))^{(1)}[/tex]=10,5n=3 year[tex]P3=10(1+(5/100))*(1+(5/100))[/tex][tex]P3=10(1+(5/100))^{(3-1)}[/tex][tex]P3=10(1+(5/100))^{(2)}[/tex]=11.025n=4 year[tex]P4=10(1+(5/100))*(1+(5/100))*(1+(5/100)) [/tex][tex]P4=10(1+(5/100))^{(4-1)}[/tex][tex]P4=10(1+(5/100))^{(3)}[/tex]= 11.57625