Paper 4D: Decision Mathematics 2 June 2025, Question 7 14 marks
A sequence {un}, where n 0, satisfies the first order recurrence relation (*)
where α, β, k are non-zero constants and α k
Determine, in terms of α, β, k and n, the general solution of this recurrence relation.
Reveal mark scheme
Given that u0 = L and uT = 0, where T is a constant,
show that a particular solution of the recurrence relation is
Reveal mark scheme
Taylor borrows a sum of money, L, to buy a house.
Taylor arranges a loan which enables them to increase their repayment as their income grows.
The terms of the loan require Taylor’s repayments to be made once a year.
On each anniversary of the loan being taken out, 6% interest is charged on the outstanding balance and Taylor makes an annual repayment of the total loan.
Taylor’s total annual repayment of the loan will increase by 4% each year and the whole debt will be cleared in exactly 40 years.
The recurrence relation (*) can be used to model this situation.
State the value of α
State the value of k
State the relevance of β in (*)
Show that after 30 years, according to the model, the outstanding debt is larger than the original loan.
Reveal mark scheme