Respuesta :
The total amount of money earned in any year based on the amount earned in the previous year is f(n+1) = 1.05f(n).
What is annual interest rate?
The interest rate is the amount a lender charges a borrower and is a percentage of the principal—the amount loaned.
What is principal?
Principal is the money that you originally agreed to pay back. Interest is the cost of borrowing the principal.
According to the question,
The annual interest rate is 5%
So, suppose the amount earned in the previous year is f(n).
The total amount of money earned in any year based on the amount earned in the previous year is
f(n+1) = f(n) + 5%f(n) (principal + interest)
f(n+1) = 1.05f(n)
Hence, the total amount of money earned in any year based on the amount earned in the previous year is f(n+1) = 1.05f(n).
Find out more information about interest rate here
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