Question

many credit card companies charge a compound interest rate of 1.8% per month on a credit card balance. miriam owes $550 on a credit card. if she makes no purchases or payments, she will go more and more into debt. which of the following sequences describes her increasing monthly balance? a. 550.00, 559.90, 569.80, 579.70, 589.60, ... b. 550.00, 559.90, 569.98, 580.24, 590.68, ... c. 550.00, 559.35, 568.86, 578.53, 588.36, ... d. 550.00, 649.00, 765.82, 903.67, 1,066.33, ... e. 550.00, 550.99, 551.98, 552.98, 553.97, ...

Explanation:

Step1: Calculate monthly growth factor

The monthly interest rate is 1.8%, so the growth factor is $1 + \frac{1.8}{100} = 1.018$.

Step2: Compute Month 1 balance

Multiply initial balance by growth factor:
$550 \times 1.018 = 559.90$

Step3: Compute Month 2 balance

Multiply Month 1 balance by growth factor:
$559.90 \times 1.018 = 569.98$

Step4: Compute Month 3 balance

Multiply Month 2 balance by growth factor:
$569.98 \times 1.018 = 580.24$

Step5: Compute Month 4 balance

Multiply Month 3 balance by growth factor:
$580.24 \times 1.018 = 590.68$

Answer:

B. 550.00, 559.90, 569.98, 580.24, 590.68, ...