Question

Modern Appliances offers a one-year monthly installment plan for a refrigerator. The payment for the first month is $75, and then it increases by 6% each month for the rest of the year. Which expression can be used to find the total paid in the first 12 months?

Answer 1

First month payment = $75
The amount to pay increases compound for the next 11 months 

Number of months left on the instalment plan is 11 months

The increase is 6% = 0.06

Let F be final value and X  be the value paid at the beginning of instalment, then

$F=X (1+0.06)^{n}$, where 'n' is the number of months left to be paid

$F=75 (1.06)^{11} =142.4$