If Tyler deposits $2000 of the $3200 he has earned in an account that pays 8% simple interest, how much will he have after 1 yea
1 answer:
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Let
where we assume |r| < 1. Multiplying on both sides by r gives
and subtracting this from gives
As n → ∞, the exponential term will converge to 0, and the partial sums will converge to
Now, we're given
We must have |r| < 1 since both sums converge, so
Solving for r by substitution, we have
Recalling the difference of squares identity, we have
We've already confirmed r ≠ 1, so we can simplify this to
It follows that
and so the sum we want is
which doesn't appear to be either of the given answer choices. Are you sure there isn't a typo somewhere?