Financial Applications of Geometric Sequences and Series

Geometric Sequences and series  are described by the blanket term geometric progressions. In these progressions, you are multiplying a term by a constant to get to the next term, repeatedly. Repeated multiplication is described by exponents, hence, geometric progressions can model exponential growth.

• Exponential growth is used in a variety of financial applications, including, but not limited to:
  • Compound interest
  • Interest rates, dates, and periods.
  • Capitalization.
• The formulas for geometric sequences and series can be used to solve for amounts and sums of money, time periods, growth and interest rates, and more.