An arithmetic sequence is defined by a starting value and a common difference, and once you have those values, you can write:

, with 

 being the starting value and 

 being the common difference.
We know that the starting value is 

, since that's the balance this month.  The common difference is the difference between two consecutive terms, which is 

Therefore, the arithmetic sequence is 

.
This corresponds to the first and third options.  However, the question of how many months you can pay the bills remains.
We can no longer pay our bills when the balance becomes zero or less, so we solve for the greatest value of 

 satisfying 

.  
Expanding, this becomes 

, 
which is equivalent to 

.  Dividing by 

 gives 

 (the 

 is an approximation, but it's close enough for our purposes).  
Since 

 has to be an integer, the maximum value of 

 is 

.  Thus, the third option is correct.  (
<span>A(n) = 740.00 + (n - 1)(-32.40); 23 months)</span>