Alice earns £450 in wages per month. She pays £200 in rent per month. Next month, • her wages will increase by 2% • her rent will increase by 5% She says “The increase in my wages will pay for the increase in my rent” Is she correct? You must show your working.

Step-by-step explanation:

Wages

£450

450 x 1.02 = 459

Rent

£200

200 x 1.05 = 210

wages increases by £9

rent increases by £10

No the increase in her wages will not fully pay for the increase in the rent

addition

step-by-step explanation:

answer: c, the green line

step-by-step explanation:

there is no black line, eliminate b.

simple interest implies periodic payments, but the red line shows no payments, eliminate d.

simple interest has equal payments. if paid say every day, the graph is about a straight line (actually a stairstep).

the yellow line is not straight, eliminate a.

check: the green line is straight, answer is c.

simple interest with positive interest rate gives a straight line sloping up to the right. green line:

g(t) = $100 + ($200-$100) ÷ (20 years) × (t years)

= $100 + (4%/year) × ($100)(t years)

incidentally, the yellow line curving upward represents continuously compounded interest

y = $100 × 2^(t years / (14 assuming the yellow line hits $200 at 14 years. 2^0 is 1, so y(0) = $100; 2^(14/14) is 2, so y(14) = $200.