Help on geometric question.

[lee91]

Hello everyone, I've encountered this mathematic questions, it's about geometric, can somebody teach me how to get the answer by using the formula? Appreciate that a lot.

Let's say I have 1 million and i put it in the back. After one year, I would take 120,000 dollars from the account every year. The interest of the bank is 10% annually. When is the last year that I can collect money from the account and what is the amount?

 

[M.Omar]

is it compound interest or simple interest...Sorry cant answer yet coz this part of question is imp

 

[lee91]

Can you please explain the difference?

 

[M.Omar]

Simple interst is when the interest is calculated based on the initial principal amount throughout.e.g if the principle is 100 and interest is 10% per annum then ofcourse u will have 110 at the end of the year now if tht amount remains on interest then the next year the amount wud be 120 coz 10 more(interst value) is added ,this is simple interest.However relating to the same scenario as of above the COMPOUND interest of tht amoun for the second year shud be 11 coz 10% of 110 is 11 and so the amount wud be 121 tht is 1 more than the simple interest amount.Got it.

 

[Nabeel.Ahmad]

The last year is 50th year. And you will collect 20,000 Dollars.

 

[M.Omar]

The last year is 50th year. And you will collect 20,000 Dollars.

u calculated based on simple interest...wht of the compound one tht is the challenging part

 

[Nabeel.Ahmad]

u calculated based on simple interest...wht of the compound one tht is the challenging part

Compound Interest can be calculated too. But i haven't studied that, since its not in the O-Level Syllabus for Mathematics.

 

[lee91]

Omar, it is compound interest. Any idea how to solve it?

 

[M.Omar]

The last year is 50th year. And you will collect 20,000 Dollars.

plus its still the wrong answer....(even if u assume it as simple interest)

 

[Nabeel.Ahmad]

plus its still the wrong answer....(even if u assume it as simple interest)

Really? What's the right answer then?

 

[M.Omar]

assuming simple interest only...after 44 years u wud have 120000 in the bank and when u withdraw tht money there will be none left to charge the interest value..Lets say tht the interest is charged before the withdrawal then u wud have 20000 left which by next year wud be 120000 and u wud finally take in all the amount ..with nothing in the bank the interst will ofc not be charged and so considering the abv 2 diff situations it can be after 44 or 45 years after the initial deposit(assuming simple interest in all the abv situation)...Abt compound then i think the trial and error method or just calculating year by year wud be the most probable way to answer this question ....no formula yet coz it wud be too complicated and also its difficult to crack tht combined formula ,yup year by year calculation is more manageable