Cathie is a financial analyst studying the growth of two investment accounts, Account 1 and Account 2, for a new client.
Account 1 has an initial amount of 5000 US Dollars (USD). Interest is added to the amount in Account 1 at the end of each year in the following manner: 200 USD at the end of the first year, 260 USD at the end of the second year, 320 USD at the end of the third year, 380 USD at the end of the fourth year and 440 USD at the end of the fifth year.
Assume the amount of interest continues to increase each year so that it follows an arithmetic sequence.
Find
the common difference.
the amount of interest, in USD, added at the end of the 10th year.
Show that the amount of money in Account 1 after n years may be expressed as
Hence or otherwise, find the amount of money in Account 1 at the end of 10 years.
Account 2 has the same initial amount of 5000 USD . Account 2 pays 6.5 % interest compounded annually. The interest is added to the amount in the account at the end of each year.
The amount in Account 2 after n years can be expressed as where .
Write down the value of B.
Hence or otherwise, show that Account 1 will have more money than Account 2 at the end of 10 years.
The client is interested in a longer-term investment. Cathie finds that it will take at least m complete years for the amount in Account 2 to exceed the amount in Account 1.
Find the value of m.
Determine the total interest added to Account 2 at the end of m years.
Give your answer correct to the nearest dollar.










