Bilbo returns from his journey with his chest of treasure wo

Bilbo returns from his journey with his chest of treasure worth 10,000 dollars. He visits the local bank back in the Shire and deposits his earnings in an account that pays 4 percent annual interest. After every year, he decides to withdraw 300 dollars from the account. Use formal recurrence notation to express the amount of money Bilbo has in the account after n years.

Solution

Let, A(n) be amount of money in account after n years

Amount , A(n) is amount after n-1 years plus 4 percent annual interest minus the 300 dollars withdrawal

Hence, A(n)=(1+4/100)A(n-1)-300

Or, A(n)=1.04A(n-1)-300