1 of 8 0-day streak

Analyse balances and graphs of an affine cash-flow model

Question 1 of 8

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A balance model is used for the emergency fund. Let $V_n$ be the fund balance in dollars after $n$ periods. $V_0$ is before the first interest calculation and cash flow

The nominal annual interest rate is 12%, compounded annually. The rate for one year is 12%

The initial balance is $36,250. An addition of $87.72 is made at the end of each year, after interest

Use the exact recurrence for the calculations. Displayed money values are rounded to the nearest cent only at the point where they are shown

2 marks

Find each balance marked ? to the nearest cent

Money values are rounded to the nearest cent after the exact recurrence is evaluated
Period n	fund balance ($)
0	$36,250
1	?
2	?

$V_{1}$ at period 1 $V_{2}$ at period 2