Question

Arnold has a bank account with a beginning balance of $5000. He spends one-fifth (20%) of the balance each month. How much money will be in the account after 6 months?

Answer 1

$1310.72

Explanation:

if he spend 20% each month, then his balance will decrease to 80% each month.

A = 5000 x 0.8^n

where A is the account balance and n = number of months

Therefore, when n = 6

A = 5000 x 0.8^6 = $1310.72