Question

Many credit card companies charge a compound interest rate of 1.8% per month on a credit card balance. Miriam owes $650 on a credit card. If she makes no purchases or payments, she will go more and more into debt. Which of the following sequences best describes her increasing monthly balances?

A. 650.00, 767.00, 884.00, 1,001.00, 1,118.00, ...
B. 650.00, 661.70, 673.40, 685.10, 696.80, ...
C. 650.00, 661.70, 673.61, 685.74, 698.08, ...
D. 650.00, 650.18, 650.36, 650.54, 650.72, ...
E. 650.00, 767.00, 905.06, 1,067.97, 1,260.21, ...

Answer 1

650(1.018) = 661.7
661.05(1.018) = 673.6106
673.6106(1.018)=685.7355908

So, the correct answer is C 650.00, 661.70, 673.61, 685.74, 698.08.