At the start of every year Jane puts $100 into an investment that gets 5% interest at the end of the year. After 20 years, how much money is in the account? Hint: calculate the amount from the year 1 contribution after 20 years, then from the year 2

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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solve the question (b) with explanation asap within 10 mins or else downvote
(a) Both Carbon Dioxide and Water Vapour in the air are "greenhouse gases": that is, they trap
energy that would normally radiate away from the Earth. This raises the temperature of the
atmosphere. Warmer air can hold more water vapour, which in turn warms the atmosphere a
bit more, which allows more water vapour, ., in an infinite cycle.
Assume that for every increase of temperature of X, enough additional water evaporates to
increase the temperature by an additional amount X/2 (which itself will cause additional water
vapour to be released).
Now assume that there is an increase in CO2 that is enough to directly cause an increase of 1
degree in average temperature. This warming will start a cycle of increased water vapour.
Write down an infinite series for the total change in temperature resulting from the combined
CO2 and water vapour. Find the combined temperature increase.
(b) At the start of every year Jane puts $100 into an investment that gets 5% interest at the end
of the year. After 20 years, how much money is in the account?
Hint: calculate the amount from the year 1 contribution after 20 years, then from the year 2
contribution at the end of the 20th year, then from the year 3 contribution etc.
Transcribed Image Text:(a) Both Carbon Dioxide and Water Vapour in the air are "greenhouse gases": that is, they trap energy that would normally radiate away from the Earth. This raises the temperature of the atmosphere. Warmer air can hold more water vapour, which in turn warms the atmosphere a bit more, which allows more water vapour, ., in an infinite cycle. Assume that for every increase of temperature of X, enough additional water evaporates to increase the temperature by an additional amount X/2 (which itself will cause additional water vapour to be released). Now assume that there is an increase in CO2 that is enough to directly cause an increase of 1 degree in average temperature. This warming will start a cycle of increased water vapour. Write down an infinite series for the total change in temperature resulting from the combined CO2 and water vapour. Find the combined temperature increase. (b) At the start of every year Jane puts $100 into an investment that gets 5% interest at the end of the year. After 20 years, how much money is in the account? Hint: calculate the amount from the year 1 contribution after 20 years, then from the year 2 contribution at the end of the 20th year, then from the year 3 contribution etc.
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