Analysis and Approaches for IBDP Maths Ebook 1 | Page 74

Your Practice Set – Analysis and Approaches for IBDP Mathematics
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Paper 2 Section A – Financial application problems
Example
On 1st January 2019, Judy invests $P in an account that pays a nominal annual interest
rate of 4%, compounded half-yearly. The amount of money in her account at the end of
each year follows a geometric sequence with common ratio R .
(a) Find the exact value of R .
It is given that there is no further deposit to or any withdrawal from the account.
[3]
(b)
Find the year in which the amount of money in Judy’s account will become
double the amount she invested.
[3]
Solution
(a)
R
2
� 4 �
��1 � �
� (2)(100) �
(M1)(A1) for correct formula
� 1.0404
A1 N3
[3]
(b) 2P�P� 1.0404 n
(M1)(A1) for correct formula
2 � 1.0404 n
1.0404 �2 � 0
n � 17.501394
Thus, the amount of money in Judy’s account will become
double the amount she invested in 2036. A1 N3
[3]
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