Financial Planning Strategy
A company invests ā¹10,000 in the first year, ā¹12,000 in the second year, ā¹14,000 in the third year,
and so on, increasing by ā¹2,000 each year. If they continue this pattern for 15 years:
a) How much will they invest in the 15th year?
b) What's the total investment over 15 years?
c) In which year will the annual investment first exceed ā¹25,000?
Investment Pattern
Year 1: ā¹10,000
Year 2: ā¹12,000
Year 3: ā¹14,000
Year 4: ā¹16,000
...continuing...
Sequence Analysis
First term a = 10,000
Common difference d = 2,000
Number of years n = 15
Part (a): Investment in 15th year
aāā
= a + (n-1)d = 10,000 + (15-1)Ć2,000 = 10,000 + 28,000 = ā¹38,000
Using nth term formula
Part (b): Total investment over 15 years
Sāā
= n/2[2a + (n-1)d] = 15/2[20,000 + 28,000] = 15/2 Ć 48,000 = ā¹3,60,000
Using sum formula for arithmetic progression
Part (c): When investment exceeds ā¹25,000
aā > 25,000 ā 10,000 + (n-1)Ć2,000 > 25,000 ā (n-1)Ć2,000 > 15,000 ā n-1 > 7.5 ā n > 8.5
Since n must be whole number, investment first exceeds ā¹25,000 in year 9
Verification for part (c)
Year 8: 10,000 + 7Ć2,000 = ā¹24,000 Year 9: 10,000 + 8Ć2,000 = ā¹26,000 ā
Confirming our answer
Answer: a) ā¹38,000 b) ā¹3,60,000 c) Year 9