Difference equation - compound interest

Discussion in 'Math' started by Peytonator, Aug 22, 2011.

  1. Peytonator

    Thread Starter Active Member

    Jun 30, 2008
    105
    3
    Hello,

    A car is purchased on hire purchase for $a. The debt is to be paid by a sequence of N payments over a total time of NT time periods. The interest charges are compounded at a rate r% per time period T.

    What is the difference eqation representing this system?

    My attempt:

    Let y(k) = outstanding debt after the kth payment of p

    y(k+1) = y(k) + r*y(k) - p

    Is this correct? Where does the "a" come in?

    Thanks :)
     
  2. Kermit2

    AAC Fanatic!

    Feb 5, 2010
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