Scroll to the part with the bolded algebraic equations. I understand the formula: S=A(1+R)+A(1+R)^2+...+A(1+R)^n

iescabroussexg

iescabroussexg

Answered question

2022-09-05

Intro to Discrete Math: compound interest calculation
Scroll to the part with the bolded algebraic equations.
I understand the formula:
S = A ( 1 + R ) + A ( 1 + R ) 2 + . . . + A ( 1 + R ) n
As well known, this S can be put into a more compact form by first computing S ( 1 + R ) S as S = A ( ( 1 + R ) n + 1 ( 1 + R ) ) / R
I have no idea what S ( 1 + R ) S or where it's gotten from.

Answer & Explanation

Salvador Howard

Salvador Howard

Beginner2022-09-06Added 12 answers

Step 1
This is from the geometric sum:
1 + r + r 2 + r 3 + r n = 1 r n + 1 1 r
Step 2
To see this, calculate ( 1 + r + r 2 + r 3 + r n ) ( 1 r ). Apply it this way:
A ( 1 + R ) + A ( 1 + R ) 2 + A ( 1 + R ) n = A ( 1 + R ) [ 1 + ( 1 + R ) + + ( 1 + R ) n 1 ] = A ( 1 + R ) 1 ( 1 + R ) n 1 ( 1 + R )

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