Question

a tin mine is estimated to have tin reserves worth two million ringgit. if the monthly extraction is 5% of the value of the reserve the month before, find the value of the tin reserves after two years.

Answer 1

Month_1 Value = Month_0 Value * 0.95

Month_2 Value = Month_1 Value * 0.95 = Moth_0 Value * 0.95*0.95 = Month_0 Value * 0.95^2

Month _n Value = Month_0 Value * (0.95)^n

After 2 years ==> n = 24

Month_24 Value = Month_0 Value * (0.95)^24 = 2,000,000 *(0.95)^24 = 583,978.05