1 offers a 6% annual interest rate, but charges a $1 service charge each year, including the year when the account was opened. Bank #2 offers a 5% annual interest rate, and has no annual service charge. Let x; [n represent the amount of money you deposit in bank I during year n and yi[n] represent your balance in bank i. Assume that deposits during year n are credited to the balance in year n but earn no interest until year n +1.

1. Use difference equations to express the relation between deposits and balances for each bank.

2. Assume that you deposit $100 in each bank in the year 2022 and make no further deposits. Solve your difference equations in part a numerically to determine your balance in each bank during years 0 through 25. Make a plot of these balances. Which bank has the larger balance in the year 2026? Which bank has the larger balance in the year 2041?

Answer rating: 100% (QA)

1 Difference equations for each bank For Bank 1 Deposit in year xn Balance in year y1n The rel... View the full answer