Amount of money that Victoria had in her account at the end of year
= $ 200
Money Deposited At each subsequent year = $ 15
Total Balance after a year = $ 200 + $ 15 = $ 215
Rate of interest = 2 %
As there are two types of interest : 1. Simple Interest 2. Compound Interest
In simple interest Principal doesn't get affected. As rate of interest is applied on Money invested in the beginning.
But in compound interest , Principal changes on each day, or month, or semi annually, or yearly the way the interest is applied.
So, Recursive Formula that represents the total amount in the bank
= Amount after each subsequent year
= [tex]\text{Principal} \times [1 +\frac{Rate}{100}]^{\text{Number of years}}[/tex]
= [tex]200 \times [1 + \frac{2}{100}]^n[/tex] where n= 1,2,3.......
