Question

Which of the following sequences describes her increasing monthly balance?

Answer 1

Given:

Rate = 1.8% = 1.8/100 = 0.018

Owes = $650

Therefore, after one month balance:

$(650\times0.018)+650=11.7+650=661.7$

After second month:

$661.7\times(1+0.018)=661.7\times(1.018)=673.61$

After third month:

$673.61\times1.018=685.74$

So, the sequence is:

650, 661.7, 673.61, 685,74...

Answer: D. 650.00, 661.70, 673.61, 685.74, 698.08