Priya pays into a savings scheme. She pays 500 pounds in year 1. Each subsequent year, she pays 4% more than the year before, so her annual payments form a geometric sequence with first term 500 and common ratio 1.04.
(a)Find the amount Priya pays in year 8, giving your answer to the nearest penny.(3)
(b)Find the total amount Priya has paid into the scheme by the end of year 15 (the sum of the first 15 payments), giving your answer to the nearest pound.(3)
(c)Priya wants the total amount paid into the scheme to first exceed 20000 pounds. Using logarithms, find the smallest number of years, n, for which this occurs.(5)
(d)State one assumption made in this model that may not hold in reality.(1)
(Total for Question 12 is 12 marks)