Question

A savings account earns 5 percent interest every year. What common ratio would help you find the next term?(1 point)
The common ratio that would help you calculate your new balance is
.

Answer 1

To calculate the new balance of a savings account that earns 5 percent interest every year, you can think of the interest as a multiplier that gives you the next term (or balance) in a geometric sequence.

If the initial balance is \( P \), after one year, the new balance will be:

\[
P \times (1 + 0.05) = P \times 1.05
\]

Here, \( 1.05 \) is the common ratio that helps you find the next term (the new balance).

So, the common ratio that would help you calculate your new balance is **1.05**.