The sum of the arithmetic sequence given by
<span>an = 0.05(n – 1) – 0.6
will be given by:
a1=0.05(1-1)-0.6=-0.6
a2=0.05(2-1)-0.6=-0.55
a3=0.05(3-1)-0.6=-0.5
a4=0.05(4-1)-0.6=-0.45
a5=0.05(5-1)-0.6=-0.4
thus the summation will be:
-0.6+(-0.55)+(-0.5)+(-0.45)+(-0.4)
=-2.5
hence
S5=-2.5</span>
There is no proportion showing
To find this, you just need to plug it in and use some algebra to figure it out.
Initial: 2700 = 2200(1 + r)5
multiply 2200 and 5: 2700 = 11000(1 + r)
Divide both sides by 11000: .24 = 1 + r
subtract both sides by 1: -.754 = r
The problem is, a negative interest rate makes no sense if there was actually an increase of 500. We can try distributing the 11000 instead
Where we left off: 2700 = 11000(1 + r)
Distribute the 11000: 2700 = 11000 + 11000r
Subtract 11000 from both sides: -8300 = 11000r
Divide both sides by 11000: -.754 = r
As you can see, both methods reached the same impossible answer. I'm assuming that you didn't type out the equation right. Are you sure it wasn't
2700 = 2200(1 - r)5
? If you subtract the r to make it negative, it might make more sense. But that still leaves us with a .754 rate of interest, which seems too high. Double check where you're typing from
