Question

You guys I need help with something like this again

Answer 1

In general an annual rate of
`r` compounded monthly will multiply the amount by a factor of
`1+(r)/(12)` each month.

Each month of 4.3% is a factor of
`1+(.043)/(12)`. That goes for five months, so is multiplied by itself five times, so gets a fifth power.

Each month of 13.7% is a factor of
`1+(.137)/(12)`. He pays this for 12-5=7 months, so it gets an exponent of seven.

We started the year owing $2600 of principal, so after the year we owe


`2600(1+(.043)/(12))^5(1+(.137)/(12))^7`.

Choice A.