Question

You owe $300 on your credit card. For every month that you fail to make a payment, your balance increases by 1%. Find a formula for the balance B owed after t months with no payment.

Answer 1

Answer:

$B(t) = 300(1.01)^{t}$

Step-by-step explanation:

The balance owed after t months can be given by an exponential function in the following format:

$B(t) = B(0)(1+r)^{t}$

In which B(0) is the initial balance owed and r is the growth rate, as a decimal.

You owe $300 on your credit card. For every month that you fail to make a payment, your balance increases by 1%.

This means, respectively, that $B(0) = 300, r = 0.01$

So

$B(t) = 300(1+0.01)^{t}$

$B(t) = 300(1.01)^{t}$