Question

Total replacement insurance coverage against breakage or loss is of a new laptop computer is $19 per month increasing by 5% per year. What is the cost per month in two years ?

Answer 1

Answer:

The cost per month of replacement insurance of laptop is $20.94

Step-by-step explanation:

Given as :

The initial cost of replacement insurance of laptop = $19 per months

The rate of increase = r = 5% yearly

The time period = 2 years

Let The cost per month in 2 years = $x

Now, According to question

The final insurance cost = The initial insurance cost × $(1+\dfrac{\textrm rate}{100})^{\textrm time}$

Or, The final insurance cost = $19 × $(1+\dfrac{\textrm r}{100})^{\textrm t}$

Or, The final insurance cost = $19 × $(1+\dfrac{\textrm r}{100})^{\textrm t}$

Or,  The final insurance cost = $19 × $(1+\dfrac{\textrm 5}{100})^{\textrm 2}$

Or, x  = $19 × (1.05)²

or, x = $19 × 1.1025

∴ x = $20.94

So, The cost per month in two years = x = $20.94

Hence The cost per month of replacement insurance of laptop is $20.94 Answer