Increment = 6% = 0.06
The explicit formula for the series is;
C(n) = C(n-1)(1.06), where n = nth month, C(n-1) = cost during previous month, C(n) = cost in month n
Applying the explicit formula;
Current cost = $150
2nd month cost = 150*1.06 = $159
3rd month cost = 159*1.06 = $168.54
The second option is correct.
