Question

many credit card companies charge a compound interest of 1.8% per month on a credit card balance. Miriam owes 750 on a credit card If she makes no more purchases or payments she will go more and more in debt Which of the following sequences describes her increasing monthly balance?

Answer 1

Answer:

Most credit card companies also apply a late payment penalty if you owe a balance and do not make a payment. Ignoring that fee, Miriam's balance will increase as:  

B(n) = 750(1.018)^n  

where B(n) is Miriam's balance after n months. The progression will be:  

$750.00  

$763.50  

$777.24  

$791.23  

$805.48

Step-by-step explanation:

Answer 2

After the 1st, 2nd, 3rd, 4th, and 5th years Miriam owes $763.5, $777.24, $791.23, $805.48, $891.97 respectively to the credit card company.

What is compound interest?

"Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest."

Given, Miriam owes on a credit card of P = $750.

The compound interest rate of the credit card company is r = 1.8% = 0.018.

Therefore, after 1 year, the debt of Miriam will be $ $750(1 + 0.018)^{1}$ = $763.5.

After 2 years, the debt of Miriam will be $ $750(1 + 0.018)^{2}$ = $777.24.

After 3 years, the debt of Miriam will be $ $750(1 + 0.018)^{3}$ = $791.23.

After 4 years, the debt of Miriam will be $ $750(1 + 0.018)^{4}$ = $805.48.

After 5 years, the debt of Miriam will be $ $750(1 + 0.018)^{5}$ = $891.97.

Therefore, after the 1st, 2nd, 3rd, 4th, and 5th years Miriam owes $763.5, $777.24, $791.23, $805.48, $891.97 respectively to the credit card company.

Learn more about compound interest here: https://brainly.com/question/14193247

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