Modeling change and

Numerical Solutions using

Difference Equation
Discrete Models
Department of Mathematics and Physics
College of Science
Central Luzon State University
August 2023
1 Modeling Change
Paradigm:

𝑓𝑢𝑡𝑢𝑟𝑒 𝑣𝑎𝑙𝑢𝑒 = 𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 + 𝑐ℎ𝑎𝑛𝑔𝑒

(What we know now?) (carefully observed)

Focus
𝑐ℎ𝑎𝑛𝑔𝑒 = 𝑓𝑢𝑡𝑢𝑟𝑒 𝑣𝑎𝑙𝑢𝑒 − 𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒
1 Modeling Change

Difference Equation – if the change is taking place

over a discrete time periods.

Differential Equation – if the change is taking place

continuously with respect to time.
2 Modeling Change using Difference Equation
Definition 2.1:
For a sequence of numbers 𝐴 = {𝑎1 , 𝑎2 , 𝑎3 , … }, the first differences are
defined as follows:
Δ𝑎1 = 𝑎2 − 𝑎1
Δ𝑎2 = 𝑎3 − 𝑎2
Δ𝑎3 = 𝑎4 − 𝑎3 , …

In general, the 𝒏𝒕𝒉 first difference is defined as

Δ𝑎𝑛 = 𝑎𝑛+1 − 𝑎𝑛 .

𝒂𝒏+𝟏 = 𝒂𝒏 + 𝚫𝐚𝐧 𝑐ℎ𝑎𝑛𝑔𝑒

𝑓𝑢𝑡𝑢𝑟𝑒 𝑣𝑎𝑙𝑢𝑒
𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒
2 Modeling Change using Difference Equation

Example 1: Savings Certificates

Consider the value of a savings certificate initially worth of ₱15,000 that
accumulates interest paid each month at 1% per month.
Initially, we have 𝑎0 = ₱15,000. Each month, it was paid with interest rate of
1%. The table below shows the accumulated amount of the savings certificate paid
each month after 5 months.

Initial amount ₱ 15,000

𝐴 = {15 000, 15 150, 15 301.5, 15 454.515,
1st month ₱ 15,150 15 609.06015, 15 765.15075, … }
2nd month ₱ 15,301.5
3rd month ₱ 15,454.515 𝑎0 − initial amount
4th month ₱ 15,609.06015 𝑎1 − amount at the end of one month
5th month ₱ 15,765.15075
𝑎𝑛+1 = 𝑎𝑛 + 𝚫𝐚𝐧 𝑓𝑖𝑛𝑑
2 Modeling Change using Difference Equation

Example 1: Savings Certificates

Observed that Δan is exactly the interest paid each month.

Δ𝑎𝑛 = 1 % 𝑜𝑓 𝑎𝑛
𝚫𝒂𝒏 = 𝟎. 𝟎𝟏𝒂𝒏

Substitute the value of Δan to the equation 𝑎𝑛+1 = 𝑎𝑛 + Δ𝑎𝑛 .

𝑎𝑛+1 = 𝑎𝑛 + Δ𝑎𝑛
𝑎𝑛+1 = 𝑎𝑛 + 0.01𝑎𝑛
𝒂𝒏+𝟏 = 𝟏. 𝟎𝟏𝒂𝒏

𝒂𝒏+𝟏 = 𝟏. 𝟎𝟏𝒂𝒏 , 𝑛 = 0,1,2,3, …

Recurrence formula: ቊ 𝐷𝑦𝑛𝑎𝑚𝑖𝑐𝑎𝑙 𝑠𝑦𝑠𝑡𝑒𝑚
𝒂𝟎 = ₱𝟏𝟓, 𝟎𝟎𝟎 (Difference Equation)
2 Modeling Change using Difference Equation

Definition 2.2
A dynamical system is a relationship among terms in a sequence.

Remarks
It is necessary to plot the change, observe the pattern, and then determine the change in
mathematical terms. We want are trying to find
change = Δ𝑎𝑛 = 𝑠𝑜𝑚𝑒 𝑓𝑢𝑛𝑐𝑡𝑖𝑜𝑛

In constructing models representing that involves discrete interval, we consider the model below.

𝐜𝐡𝐚𝐧𝐠𝐞 = 𝚫𝒂𝒏 = 𝒂𝒏+𝟏 − 𝒂𝒏 = 𝒇(𝒕𝒆𝒓𝒎𝒔 𝒊𝒏 𝒕𝒉𝒆 𝒔𝒆𝒒𝒖𝒆𝒏𝒄𝒆, 𝒆𝒙𝒕𝒆𝒓𝒏𝒂𝒍 𝒕𝒆𝒓𝒎𝒔)

2 Modeling Change using Difference Equation

Example 2: Mortgaging a Home

Six years ago, your parent purchased a home financing ₱ 800,000 for 20 years, paying
monthly payment of ₱ 8 808.7 with a monthly interest of 1%. They have made 72
payments and wish to know how much they owe on the mortgage, which they are
considering paying off with an inheritance they received. Or they could be considering
refinancing the mortgage with several interest rate options.

What can you say about the change Δan ?

Δan = 0.01an − 8808.7

Dynamical system model:

𝒂 = 𝟏. 𝟎𝟏𝒂𝒏 − 𝟖 𝟖𝟎𝟖. 𝟕, 𝑛 = 0,1,2,3, …

ቊ 𝒏+𝟏
𝒂𝟎 = ₱𝟏𝟓, 𝟎𝟎𝟎
2 Modeling Change using Difference Equation

Example 2: Mortgaging a Home

n Amount Owed 1000000
𝒂𝒏
0 800000 800000
1 799191.3

Loan value
2 798374.513
600000
3 797549.5581
4 796716.3537
400000
5 795874.8172
6 795024.8654
7 794166.4141
200000
8 793299.3782
9 792423.672 0
10 791539.2087 0 50 100 150 200 250 300
11 790645.9008 months
12 789743.6598

Numerical Solution and graph for Mortgaging a Home

Definition 2.3
A numerical solution is a table of values satisfying the dynamical system.
2 Modeling Change using Difference Equation

Exercises
A. Write a difference equation to represent the change during the 𝑛𝑡ℎ interval as a function
of the previous term in the sequence.
1. { 2,4,16,256, … }
2. 1,2,5,11,23, …
3. {1,8,29,65,…}

B. Formulate a dynamical system that models change exactly for the following situations.
1. You currently have ₱10, 000 in your savings account that pays 0.5% interest each
month. You add another ₱250.00 each month.
2. Your parents are considering a 30-year ₱ 1,000,000 mortgage that charges 0.5%
interest each month. Formulate a model in terms of a monthly payment 𝒑 that
allows the mortgage to be paid off after 360 payments.
3 Dynamical System Model for Population Growth of a Certain Specie
• Mathematical models simply approximate real world behavior and
some simplifications is necessary to represent a real-world behavior
with a mathematical construct.
Spotted Owl Population

Suppose we want to represent the spotted owl population in a habitat

to predict the effect of changes in environmental policy.
Variables that affect spotted owl population: birth rate, death rate,
availability of resources, competition for resources, predators and
natural disasters.

In the following slides, we will see the construction of four models of spotted owl
population incorporating different assumptions.
3 Dynamical System Model for Population Growth of a Certain Specie
Spotted Owl Population
1 Unconstrained Growth
• Consider the population of spotted owl over each time period 𝑛 ( pn )
• Population changes by only births and deaths.
• Number of births 𝑏 (𝑝𝑜𝑠𝑖𝑡𝑖𝑣𝑒 𝑐𝑜𝑛𝑡𝑎𝑛𝑡) is a percentage of the current
population for each time period 𝑏𝑝𝑛 .
• Number of deaths 𝑑 (𝑝𝑜𝑠𝑖𝑡𝑖𝑣𝑒 𝑐𝑜𝑛𝑠𝑡𝑎𝑛𝑡) is a percentage of the current
population for each time period (𝑑𝑝𝑛 ).
Model for change.
Δ𝑝𝑛 = 𝑏𝑝𝑛 − 𝑑𝑝𝑛
Δ𝑝𝑛 = 𝑘𝑝𝑛 Note also that 𝛥𝑝𝑛 = 𝑝𝑛+1 − 𝑝𝑛

Where 𝒌 = 𝒃 − 𝒅 represents the growth constant ( because for

most of the population, 𝑘 is a positive number.
3 Dynamical System Model for Population Growth of a Certain Specie
Spotted Owl Population
2 Constrained Growth
• Consider that a habitat can only support spotted owl population of size
𝑀 𝑐𝑎𝑟𝑟𝑦𝑖𝑛𝑔 𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦 .
• Note that if there are more than, the growth rate becomes negative.
• The population 𝑝𝑛 over period 𝑛 slows down as 𝑝𝑛 approaches 𝑀.

Model for change.

Δ𝑝𝑛 = 𝑘 𝑀 − 𝑝𝑛 𝑝𝑛

Note also that 𝛥𝑝𝑛 = 𝑝𝑛+1 − 𝑝𝑛

where 𝑘 is a positive constant.

3 Dynamical System Model for Population Growth of a Certain Specie
Spotted Owl Population
3 Competing species
• Assume that there are another species lives in a habitat aside from spotted owl.
Let’s denote the population of the competing species after 𝑛 periods as 𝑐𝑛 .
• In the absence of another species, each individual species exhibits unconstrained
growth
• Δ𝑝𝑛 = 𝑘1 𝑝𝑛 − population of spotted owl over a period 𝑛 where 𝑘1 is positive
constant growth rate.
• Δ𝑐𝑛 = 𝑘2 𝑐𝑛 − population of the second specie over a period 𝑛 where 𝑘2 is
positive constant growth rate.
• The effect of the presence of a second species is to diminish the growth rate of
the other species.
• Assume that the decrease in population of two species is roughly proportional
to the number of possible interaction between the two species.
3 Dynamical System Model for Population Growth of a Certain Specie
Spotted Owl Population
3 Competing species

Model for change.

Δ𝑝𝑛 = 𝑘1 𝑝𝑛 − 𝑘3 𝑐𝑛 𝑝𝑛
and
Δ𝑐𝑛 = 𝑘2 𝑐𝑛 − 𝑘4 𝑐𝑛 𝑝𝑛
where 𝑘3 and 𝑘4 represent the relative intensities of the
competitive interactions.
3 Dynamical System Model for Population Growth of a Certain Specie
Spotted Owl Population
4 Predator-prey species
• Consider that a spotted owl’s primary food source in a habitat is single prey, say
mice.
• 𝑚𝑛 - represents the mouse population over a period 𝑛.
• In the absence of predatory spotted owl, the mouse population prospers.
• The detrimental effect on the mouse growth rate by the spotted owl
population.
Δ𝑚𝑛 = 𝑘1 𝑚𝑛 − 𝑘2 𝑝𝑛 𝑚𝑛 where 𝑘1 and 𝑘2 are positive constant.
• In the absence of mice, spotted owl population would diminish to zero
(−𝑘3 𝑝𝑛 𝑤ℎ𝑒𝑟𝑒 𝑘 𝑖𝑠 𝑝𝑜𝑠𝑖𝑡𝑖𝑣𝑒 𝑐𝑜𝑛𝑠𝑡𝑎𝑡𝑛𝑡).
• The presence of more mice increase the growth rate of the predatory spotted owl
which is assume to be proportional to the product of 𝑝𝑛 and 𝑚𝑛 .
3 Dynamical System Model for Population Growth of a Certain Specie
Spotted Owl Population
4 Predator-prey Species

Model for change.

Δ𝑚𝑛 = 𝑘1 𝑝𝑛 − 𝑘2 𝑚𝑛 𝑝𝑛
and
Δ𝑝𝑛 = −𝑘3 𝑝𝑛 + 𝑘4 𝑚𝑛 𝑝𝑛
where 𝑘1 , 𝑘2 , 𝑘3 and 𝑘4 are positive constant.