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▶ Geometric Sequence
▶ Derivative
▶ Increasing/Decreasing Functions
▶ Accumulation Function
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Geometric Sequence
A geometric sequence is a sequence of non-zero numbers of form
a, ar, ar2 , ar3 , . . . ,
where r ̸= 0 is called the common ratio and a is a scale factor.
Fact: The sum of the first n-terms of geometric sequence:
ar0 + ar + ar2 + ar3 + · · · + arn−1
n
X n−1
X
= ark−1 or ark
k=1 k=0
a(1 − rn )
= ,
1−r
where r ̸= 1.
Proof.
▶ 1st method: Mathematical induction (optional).
▶ 2nd method: Direct computation.
Hint: Show the identity
1 − rn = (1 − r)(1 + r + r2 + · · · + rn−1 ).
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Proof
1−r n
Pn Pn Pn
Because k=1 ark−1 = a rk−1 , by k=1 rk−1 =
k=1 1−r , we
obtain !
n n
X
k−1
X
k−1 a(1 − rn )
ar =a· r = .
1−r
k=1 k=1
Pn n
Hence, it suffices to show that k=1 rk−1 = 1−r1−r , i.e.,
1 − rn = (1 − r)(1 + r + r2 + · · · + rn−1 ).
In fact,
(1 − r)(1 + r + r2 + · · · + rn−1 )
=1 + r + r2 + · · · + rn−1
− (r + r2 + · · · + rn−1 + rn )
=1 − rn .
We are done.
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Mathematical Induction (optional)
If r ∈ R, r ̸= 1, prove that for all n ∈ N, we have
1 − rn
1 + r + r2 + · · · + rn−1 = .
1−r
1 − rk
1 + r + r2 + · · · + rk−1 + rk+1−1 = + rk
1−r
1 − rk 1 − rk + rk − rk+1
= + rk =
1−r 1−r
1 − rk+1
=
1−r
Consequently, by the Principle, The inequality is valid for for all
n ∈ N.
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Derivative
Define the derivative of f (x) with respect to x to be f ′ (x) by
f (x + h) − f (x)
f ′ (x) = lim .
h→0 h
Standard derivatives
▶ dxd
(f (x)n ) = nf ′ (x) · f (x)n−1 . e.g. dx
d n
x = nxn−1 for n ≥ 1.
▶ Chain Rule: dx d
(f ◦ g)(x) = f ′ (g(x)) · g ′ (x).
▶ Product Rule: d
dx (f (x) · g(x)) = f ′ (x) · g(x) + f (x) · g ′ (x).
f ′ (x)·g(x)−g ′ (x)·f (x)
d f (x)
▶ Quotient Rule: dx g(x) = (g(x))2 .
Example: Let f (x) = sin(x)2 + ex cos(x). Then
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Increasing/Decreasing Functions
▶ f is (strictly) increasing on (a, b) if x1 < x2 ⇒ f (x1 ) < f (x2 )
for all x1 , x2 ∈ (a, b).
▶ f is (strictly) decreasing on (a, b) if x1 < x2 ⇒ f (x1 ) > f (x2 )
for all x1 , x2 ∈ (a, b).
Increasing/Decreasing Test
Let f be continuous on [a, b], differentiable on (a, b).
▶ If f ′ (x) > 0 for any x ∈ (a, b), then f is strictly increasing on
[a, b].
▶ If f ′ (x) < 0 for any x ∈ (a, b), then f is strictly decreasing on
[a, b]. 6/15
Example
Find the increasing/descreasing intervals of f (x) = x3 − x.
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Exercise
200
X n
X
1. Compute ark and ark for n ≥ m.
k=100 k=m
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Accumulation Function
When a principal of $1 is deposited in an interest-paying account at
time t = 0, it earns some interest over the time interval [0, t]. The
accumulated value of $1 at time t, denoted by a(t), is known as the
accumulation function.
a(t) = principal + interest.
Clearly, a(0) = 1.
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Simple Interest
Let r be the annual rate of interest.
Simple interest is calculated only on the principal amount.
A principal of $1:
▶ After 1 year (i.e., t = 1), earn interest 1 × r and the accumulated
value a(1) = 1 + 1 × r × 1 = 1 + r;
▶ After 2 years (i.e., t = 2), earn interest 2 × r and the accumulated
value a(2) = 1 + 2 × r × 1 = 1 + 2r;
▶ After n years (i.e., t = n), earn interest n × r and the
accumulated value a(n) = 1 + n × r × 1 = 1 + nr.
Based on the simple-interest method of calculating interest,
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Compound Interest
A principal of $1:
▶ After 1 year (i.e., t = 1), the accumulated value
a(1) = 1 + 1 × r = 1 + r;
▶ After 2 years (i.e., t = 2), the accumulated value
a(2) = a(1) + a(1) × r = (1 + r) + (1 + r) × r = (1 + r)2 ;
▶ After n years (i.e., t = n), the accumulated value
a(n) = a(n − 1) + a(n − 1) × r = (1 + r)a(n − 1) = (1 + r)n .
If the compound-interest method is used,
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Linear Growth vs Geometric Growth
Figure: https://www.dbs.com.sg/personal/rates-online/
singapore-dollar-fixed-deposits.page 13/15
Example (Structured deposit)
A five-year structured deposit offers an effective annual rate of interest
of 3% for the first 3 years and 3.5% for the next two years.
If I invest $10, 000, how much will I receive at maturity if
(i) simple interest is paid
(ii) compound interest is paid.
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Solution
Solution of (i). Suppose that simple interest is paid.
Note that a(0) = 10000 = 104 .
Since the interest rate for the first 3 years is 3%, we have
a(3) = a(0)(1 + 3% × 3) = 104 × (1 + 0.03 × 3) = 10, 900.
Since the interest rate for the next 2 years is 3.5%, we have