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*0.018)+650=11.7+650=661.7`

After second month:

`661.7*(1+0.018)=661.7*(1.018)=673.61`

After third month:

`673.61*1.018=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