Question

John has taken out a loan for college. He started paying off the loan with a first payment of $100. Each month he pays, he wants to pay back 1.1 times the amount he paid the month before. Explain to John how to represent his first 20 payments in sequence notation. Then explain how to find the sum of his first 20 payments, using complete sentences.

Answer 1

Let a_0 = 100, the first payment. Every subsequent payment is the prior payment, times 1.1. In order to represent that, let a_n be the term in question. The term before it is a_n-1. So a_n = 1.1 * a_n-1. This means that a_19 = 1.1*a_18, a_18 = 1.1*a_17, etc. To find the sum of your first 20 payments, this sum is equal to a_0+a_1+a_2+...+a_19. a_1 = 1.1*a_0, so a_2 = 1.1*(1.1*a_0) = (1.1)^2 * a_0, a_3 = 1.1*a_2 = (1.1)^3*a_3, and so on. So the sum can be reduced to S = a_0 * (1+ 1.1 + 1.1^2 + 1.1^3 + ... + 1.1^19) which is approximately $5727.50