Asked by lisa

Robert Mason's account of $98.50 has been delinquent for three months. According to the office procedures manual, after 90 days a 2% service charge, compounded monthly, is added to future bills. What will be the amount owed after nine months?

Answers

Answered by Henry
Pt = Po

















Pt = Po





Pt = Po (r + 1)^n.

r =2% / 100% = 0.02 = rate / mo.

n = 12 comp/yr * 0.75 yr = 9 comp.

Pt = 98.50 (1.02 )^9,

Pt = 98.50 * 1.1951 =117.72 after 9mo.










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