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Exercise 5.4 · Q7

Q.You and your sibling decide to ask for a raise in your pocket money from your Dad. Your Dad gives both of you a choice. You two could have ₹1000 at once or can get ₹2 on day one, ₹4 on day two and so on, receiving twice as many rupees each day as the previous day, for 12 days. While you opted for getting ₹1000 at once, your brother opted for the latter. Which one of you made a better decision and why?

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One option is a flat ₹1000\text{₹}1000; the other is a GP starting at ₹2\text{₹}2, doubling daily for 12 days. Compare the totals.

Sum of the first nn terms of a GP: Sn=a(rn−1)r−1S_n=\dfrac{a(r^n-1)}{r-1}, where a=a= Day-1 amount, r=r= common ratio (doubling ⇒r=2\Rightarrow r=2), n=n= number of days.

  1. GP option: Day 1 =₹2=\text{₹}2, so a=2a=2. Amount doubles each day, so r=2r=2. Duration n=12n=12 days.
  2. Substitute into the sum formula:

S12=2(212−1)2−1=2(212−1)S_{12}=\dfrac{2\left(2^{12}-1\right)}{2-1}=2\left(2^{12}-1\right)

  1. Compute 212=40962^{12}=4096, so S12=2(4096−1)=2(4095)=8190S_{12}=2(4096-1)=2(4095)=8190.
  2. Compare: flat option =₹1000=\text{₹}1000; GP option =₹8190=\text{₹}8190.
  3. Since ₹8190>₹1000\text{₹}8190 > \text{₹}1000, the GP (doubling) option yields ₹7190\text{₹}7190 more. …

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