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An exercise that has been bugging me.


joeyay

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S10 = 1295.67

Un = ar^n-1

Sn = a (1-r^n/ 1-r)

Therefore,

1295.67 = 400 * ((1 - r^10) / (1 - r))

Dividing both sides by 400,

3.24 = (1-r^10)/ (1-r)

Cross multiplying,

3.24 - 3.24r = 1- r^10

therefore,

r^10 - 3.24 r + 2.24 = 0

I was stuck here but when graphing this equation on a graphics calculator, and u look for the x-intercepts,

r=0.7 r=1 but r cannot b 1 so, r= 0.7

Checking your answer,

400 * ((1- 0.7^10)/ (1-0.7)) = 1295.66667

Dont know if i helped enough... :-)

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