Show that eventually the person''s capital grows at 20%

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Reference no: EM131079633

A person's capital at the beginning of, and expenditure during, a given year k are denoted by Ck and Ek respectively, and satisfy the difference equations

(a) Show that eventually the person's capital grows at 20% per annum.

(b) If the capital at the beginning of year 1 is £6000 and the expenditure during year 1 is £3720 then find the year in which the expenditure is a minimum and the capital at the beginning of that year.

Reference no: EM131079633

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