CMA Foundation · Fundamentals of Business Mathematics and Statistics · Arithmetic Progression and Geometric Progression
A recurring-style plan has Mehta & Sons depositing Rs 1,000 at the end of the first year, with each later year's deposit being 1.5 times the previous year's, for 4 years (ignore interest). What is the total deposited?
The total deposited is Rs 8,125. The deposits form a GP with first term 1,000 and ratio 1.5, giving 1,000, 1,500, 2,250 and 3,375, which add up to 8,125.
- ARs 5,062.50
- BRs 6,500
- CRs 8,125Correct
- DRs 6,625
Explanation
Deposits: 1,000, 1,500, 2,250, 3,375. Sum = 1,000(1.5^4 - 1)/0.5 = 1,000 x (5.0625 - 1)/0.5 = 8,125. Rs 5,062.50 is just the fourth power times 1,000 without subtracting 1 and dividing.
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