Differential equations interest probelm

In summary, the problem involves two people, P1 and P2, who start bank accounts at the ages of 25 and 35 respectively, with no initial capital. They both add 2000 euros annually for 10 and 30 years, and the goal is to calculate the balance of each account at the age of 65. The interest rate is 8%, and the question also asks for the interest rate needed to make both balances equal. Using the formula for continuous interest, we can calculate the balances at age 65 as S(t) = e^{rt}+2000rt+2000t. To make the balances equal, we can set the two equations for P1 and P2 equal to each other
  • #1
atrus_ovis
101
0

Homework Statement


Two same aged people P1,P2 create bank accounts at ages 25,35 respectively, and add 2000 euros annualy , for 10,30 years respectively. No initial capital in the accounts.

1.For interest 8% , what's the balance of each acount at age of 65 of P1,P2?
2.What should be the interest for the above balances to be equal

The Attempt at a Solution


I guess continuous interest is assumed.

The problem here is the constant 2000/year.
The interest r affects the balance in the form of
[tex]S_r(t) = S_0e^{rt}[/tex] , while the constant deposits [tex] S_{c0}(t) = S_{c0} + 2000t [/tex]

edit : To the result of the bank's interest over a year, 2000 is added and the total is considered the balance for the application of interest at the next year.
Does it hold to say:
[tex] \frac{dS}{dt} = (2000+S)r \iff S(t) = S_0 e^{rt} + 2000rt[/tex] ?

Do i have to combine them somehow / write the relation as a DE and find the solution?
hints?
 
Last edited:
Physics news on Phys.org
  • #2
I think i got it:
[tex]
S(t) = e^{rt}+2000rt+2000t
[/tex]
 

FAQ: Differential equations interest probelm

1. What is a differential equation?

A differential equation is a mathematical equation that relates a function with its derivatives. It describes the relationship between a quantity and the rate at which that quantity changes.

2. What is the importance of differential equations in science?

Differential equations are essential in understanding and modeling many scientific phenomena, including physical systems, chemical reactions, population growth, and more. They allow scientists to make predictions and analyze complex systems.

3. What is an interest problem in differential equations?

An interest problem in differential equations involves modeling the change in interest over time. This can be used to understand the behavior of investments, loans, and other financial situations.

4. How are differential equations solved?

There are various methods for solving differential equations, such as separation of variables, integrating factors, and power series. These methods involve manipulating the equation to find a solution that satisfies the given conditions.

5. What are some real-life applications of differential equations?

Differential equations have numerous applications in real-world situations, including predicting the spread of diseases, designing control systems for vehicles and robots, and analyzing weather patterns. They are also used in many areas of engineering, physics, and economics.

Similar threads

Replies
12
Views
4K
Replies
5
Views
3K
Replies
1
Views
2K
Replies
4
Views
3K
Replies
1
Views
2K
Replies
3
Views
6K
Replies
5
Views
3K
Back
Top