Muller's recurrence: limit In Kahan's account of the Muller's recurrence (p.16): $x_{n+1} = E(x_n, x_{n-1})$ for the function
$$
E(y, z) = 108 - \frac{815-\frac{1500}{z}}{y},
$$
he uses the characteristic polynomial for the recurrence to deduce the closed form:
$$
x_n = \frac{\alpha 3^{n+1} + \beta 5^{n+1} + \gamma 100^{n+1}}{\alpha 3^{n} + \beta 5^{n} + \gamma 100^{n}}.
$$
If $x_0=4, x_1=4.25$ exactly, then we can choose $\alpha=\beta=1, \gamma=0$. But, if there is some numerical round-off in a numerical calculation of the $x_n$, then the closed form becomes ("at least initially"),
$$
x_n = \frac{3^{n+1} + 5^{n+1} + \gamma_n 100^{n+1}}{3^{n} + 5^{n} + \gamma_n 100^{n}}\\
= 100 - \frac{95+97(3/5)^n}{20^n\gamma_n+1+(3/5)^n}
$$
where $\gamma_n$ is small.
I can't derive the last equality, and can't see how this changes the limit (as $n\rightarrow \infty$) to 100 instead of 5. Furthermore, what justifies the choice of $\alpha$, $\beta$, $\gamma$ above amongst the presumably infinite options?
 A: $\alpha = 1, \beta = 1, \gamma = 0$ gives the exact solution from the starting values. For the round-off error setting  they are slightly disturbed; we still have
$\alpha \approx  1, \beta \approx 1,$ but $\gamma$ has the order of the machine epsilon $\gamma \approx \epsilon.$ To compute Kahan's form from 
$$x_n = \frac{3^{n+1} + 5^{n+1} + \gamma_n 100^{n+1}}{3^{n} + 5^{n} + \gamma_n 100^{n}}$$
first do some algebraic manipulations with the numerator
$$3^{n+1} + 5^{n+1} + \gamma_n 100^{n+1}=
3\cdot 3^{n} + 5\cdot 5^{n} + 100\gamma_n 100^{n}$$
$$=(100-97)\cdot 3^{n} + (100-95)\cdot 5^{n} + 100\gamma_n 100^{n}$$
$$=100(3^{n} + 5^{n} + \gamma_n 100^{n})-97\cdot 3^{n} -95\cdot 5^{n} 
$$
hence the intermediate value for $x_n$ is 
$$x_n = 100 - \frac{97\cdot 3^n + 95\cdot 5^n}{3^n + 5^n + \gamma_n 100^n}$$
now divide by $5^n$ and get 
$$x_n = 100 - \frac{ 95+ 97\cdot (3/5)^n }{ 20^n \gamma_n+ 1 +(3/5)^n }$$
Now it is clear that the limit is $\lim_\limits{n\rightarrow \infty} x_n = 100$ for $\gamma_n  \ne 0$ and $100-95 = 5$ for $\gamma_n = 0$
The main difference between exact (error=0) and round-off is the growing error term 
$20^n \gamma_n$. For double precision calculations with a constant $\gamma_n = \epsilon = 2.22\times 10^{-16}$ you have $20^{15}\epsilon \approx 7275.9576$ and 
$20^{20}\epsilon \approx 23283064365.4$
