Geometric With Percentage

Which is a purpose of using a geometric recurrence relation in finance ?

• To calculate simple interest on investments

• To model compound interest for investments or loans

• To determine the principal amount of a loan

• To track the stock market prices

What can be done using geometric recurrence relations in the context of depreciation?

• Calculate the original cost of an asset

• Model reducing-balance depreciation

• Determine the salvage value of an asset

• Estimate the lifespan of an asset

What occurs in a sequence when the quantity being modelled increases or decreases by the same percentage at regular intervals?

• Linear growth

• Geometric growth or decay

• Exponential shift

• Arithmetic progression

Which of the following is an everyday example of geometric decay?

• Appreciation of antique value over time

• Depreciation of a new car's value by a constant percentage each year

• Increase in population

• Simple interest accumulation

The common ratio, r, in a geometric sequence is 0.6.

What is the percent of change?

• 60% increase

• 40% increase

• 60% decrease

• 40% decrease

The common ratio, r, in a geometric sequence is 1.35.

What is the percent of change?

• 135% increase

• 35% increase

• 65% increase

• 35% decrease

When writing a recursive formula for geometric sequences that show growth, we can replace r, the common ratio, with...

• (1+p) where p is the percentage written as a decimal

• (1-p) where p is the percentage written as a decimal

• You cannot replace r

• the % listed in the problem

When writing a recursive formula for geometric sequences that show decay, we can replace r, the common ratio, with...

• (1+p) where p is the percentage written as a decimal

• (1-p) where p is the percentage written as a decimal

• You cannot replace r

• the % listed in the problem

A new car depreciates about 15% each year. You purchase a new car for $35,000. Which recursive formula models this situation?

• £27375.75

• £11054.25

• £9900

• £17202.09