Question

ui makes a list of the balances in her savings account at the end of each month. She notices that each month’s total is 5% greater than the previous month’s total. She writes a recursive formula to describe the account balances.

Which value should she use as the common ratio?

0.05
0.5
1.05
5.0

Answer 1

1.05

Each month the balance becomes previous + 5% of previous = previous × (1 + 0.05) = previous × 1.05, so the common ratio is 1.05.