Note: if you cannot remember the recurrence relation formula for a compound interest system, revise notes for 2.2 Analysis of Compound Interest.

### Modelling using a Recurrence Relation

- A
**compound interest system with regular withdrawals**describes a system which has a**positive interest rate**, and**withdrawals (negative)**made at the end of each compounding period. - We can use the
**simple recursion formula**to model this system:

A_{n+1}=d+(1+I) A_{n}

Where d<0 and I>0.