A+ » VCE » Further Maths U3 & 4 Master Notes » A2 Recursion and Financial Modelling » 5.1 Modelling Annuity Investments

5.1 Modelling Annuity Investments

Modelling using Recursion Relations

  • An annuity investment describes a system which has a positive interest rate, and positive deposits made at the end of each compounding period.
  • We can use the simple recursion formula to model this system:
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