(16) A person has deposited $25000 in an investment which yields 14% simple interest annually. Do these amounts (principal + interest) form an A.P? If so, determine the amount of investment after 20 years.

Solution:

Simple interest = PNR/100

                     = (25000 x 1 x 14)/100

                     = 3500

Amount = principal + interest

         = 25000 + 3500

        = 28500

Amount at the end of the first year = 28500

Amount at the end of second year = 28500 + 3500

                                                   = 32000

Amount at the end of third year = 32000 + 3500

                                              = 35500

28500,32000,35500.,………………….

This is the arithmetic sequence. To find the amount of investment after 20 years we need to find 20th term

tn = a +(n - 1) d

a = 28500 d = 32000 – 28500

                   = 3500

t20 = 28500 + (20 - 1) 3500

  = 28500 + 19 (3500)

  = 28500 + 66500

  = 95000