Recursion and Financial Modelling

Match up the following terms with their definition

• constant ratio between terms

• recursion rule

• produce successive terms in a sequence

• arithmetic sequence

• constant difference between terms

• recursive relation

• enables you to find the nth term

• geometric sequence

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CCSS.HSF.BF.A.2

Consider the first 5 terms in the sequence.

98, 97, 96, 95, 94, ...

This can be generated using the recurrence relation:

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CCSS.HSF.IF.A.3

Tags

CCSS.HSF.BF.A.2

Consider the following sequence.

24, 36, 54, 81, ...

The terms can be generated using the recurrence relation

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CCSS.HSF.IF.A.3

For an investment with an interest rate of 3.95% per annum, compounding monthly, the monthly

interest rate is closest to

• 0.03%

• 0.33%

• 0.40%

• 0.47%

Which of the following rules can be used to model this arithmetic sequence?

2, −3, −8, −13, −18…

Tags

CCSS.HSF.BF.A.2

Which of the following rules can be used to model this geometric sequence?

0.5, 1, 2, 4, 8, …

Tags

CCSS.HSF.BF.A.2