Applications of Sequences and Series in Finance

Vocabulary flashcards covering formulas and concepts for applying arithmetic and geometric sequences and series to financial scenarios.

Sequence Formulas (in Finance)

Formulas used when calculating the value of a single specific term at a certain point in time.

Series Formulas (in Finance)

Formulas used when calculating the total or accumulated sum of several terms over a period of time.

Arithmetic Sequence Formula

The formula $a_n = a_1 + (n - 1)d$, used to determine a specific term in a sequence with a constant common difference $d$.

Arithmetic Series Formula

The formula $S_n = \frac{n}{2}(a_1 + a_n)$, used to calculate the sum or total of the first $n$ terms in an arithmetic pattern.

Geometric Sequence Formula

The formula $a_n = a_1 \times r^{n-1}$, used to calculate a specific term in a sequence where each term is multiplied by a common ratio $r$.

Common Ratio ($r$) for Percentage Growth

The multiplier in a geometric sequence involving percentage increase, calculated by adding $1$ to the given percentage rate in decimal form.