Math

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In a financial deal, you are promised $800 the first day and each day after that you will receive 45% of the previous day's amount. When one day's amount drops below $1, you stop getting paid from that day on. What day is the first day you would receive no payment and what is your total income?

I am so confused about this problem. Could someone please show me the steps?

  • Math -

    f(day)=800*.45^(day)

    Set f(day)=1, solve for day by taking a log on both sides.

  • Math -

    instead of .45^(day) you should actually use .45^(day-1) so that the first day is 800

  • Math -

    I tried doing this, but I still have no idea how to solve this problem =/

  • Math -

    e.g.
    day 1 = 800
    day 2 = 800(.45)
    day 3 = 800(.45)^2
    looks like day (n+1) would be 800(.45)^n
    ..

    when is 800(.45)^n = 1
    .45^n = 1/800 = .00125
    take log of both sides
    log(.45^n) = log .00125
    n log .45 = log .00125
    n = log .00125/log .45 = 8.3

    checking:
    day 9 = 800(.45)^8 = 1.35
    day 10 = 800(.45)^9 = .61 ----> receive no income

    so he receives income for 9 days
    so we want the sum of the geometric series of 9 terms
    with a = 800 and r = .45
    sum(9) = 800(1 - .45^9)/(1 - .45)
    = 1453.44

  • Math -

    I understand it now! Thank you so much!

  • Math -

    i still don't get it

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