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  • Difference Equation - Practice Questions

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    JoeJye
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    This document contains practice questions on difference equations with specified initial conditions and their solutions. It asks the reader to identify the difference equation and unique solution for a savings account with an initial $30,000 deposit and $5,000 added annually. With a 2% interest rate, it is calculated that the savings would be $166,065.27 after 20 years and reach $112,000 in approximately 13 years.

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    economic notes from professional

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    Difference Equation_Practice Questions

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    This document contains practice questions on difference equations with specified initial conditions and their solutions. It asks the reader to identify the difference equation and unique solution for a savings account with an initial $30,000 deposit and $5,000 added annually. With a 2% interest rate, it is calculated that the savings would be $166,065.27 after 20 years and reach $112,000 in approximately 13 years.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views1 page

    Difference Equation - Practice Questions

    Uploaded by

    JoeJye
    This document contains practice questions on difference equations with specified initial conditions and their solutions. It asks the reader to identify the difference equation and unique solution for a savings account with an initial $30,000 deposit and $5,000 added annually. With a 2% interest rate, it is calculated that the savings would be $166,065.27 after 20 years and reach $112,000 in approximately 13 years.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Practice questions (Difference Equations)

    1. Find the unique solutions of the following difference equations with the specified initial
    conditions:
    t

    1
    1
    a) Yt Yt 1 6; Y0 0 (Ans: Yt 4 4 )
    2
    2
    b) Yt 2Yt 1 9; Y0 4 (Ans: Yt 2 3 )
    t

    1
    c) Yt Yt 1 6; Y0 1
    4
    d) Yt 4Yt 1 5; Y0 2
    Comment on the qualitative behaviour of the solution as t increases.

    2. You opened a saving account with an initial deposit of $30000. You are planning save $5000
    every year.
    a) Identify the difference equation and the unique solution for the above.
    b) If the interest rate is 2% per annum, how much would you have saved after 20 years?
    [Answer: 166065.27]
    c) How many years would you need to wait to achieve a saving target of at least $112,000?
    [Answer: 12.9713 years]

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