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The following table shows the expenses and payments on a credit card for 3 months, starting with an initial balance of $700. Use the table as a guide to help you find the balance at the end of the third month, to the nearest dollar. Assume that the APR for the credit card is 30% (billed at a rate of 2.5% per month), and that the interest for a given month is based on the balance for the previous month.

$1,173

$1,281

$1,233

$1,245

None of the above.

Let's break down the problem step by step based on the given table and the assumptions:

### Given Information:
- Initial balance (Month 0): $700
- APR (Annual Percentage Rate): 30%, which translates to a monthly interest rate of 2.5% (since 30% / 12 = 2.5%).

We'll use the following formula for each month's interest:
\[
\text{Interest} = \text{Previous Month's Balance} \times 2.5\%
\]

Then, the formula for the new balance is:
\[
\text{New Balance} = \text{Previous Balance} + \text{Expenses} + \text{Interest} - \text{Payment}
\]

### Calculating Month-by-Month Balance:

#### Month 1:
- Previous Balance (Month 0): $700
- Interest (2.5% of $700): 
\[
700 \times 0.025 = 17.50
\]
- Balance before payment:
\[
700 + 720 + 17.50 = 1,437.50
\]
- New Balance after payment of $550:
\[
1,437.50 - 550 = 887.50
\]

#### Month 2:
- Previous Balance (Month 1): $887.50
- Interest (2.5% of $887.50): 
\[
887.50 \times 0.025 = 22.19
\]
- Balance before payment:
\[
887.50 + 610 + 22.19 = 1,519.69
\]
- New Balance after payment of $250:
\[
1,519.69 - 250 = 1,269.69
\]

#### Month 3:
- Previous Balance (Month 2): $1,269.69
- Interest (2.5% of $1,269.69):
\[
1,269.69 \times 0.025 = 31.74
\]
- Balance before payment:
\[
1,269.69 + 380 + 31.74 = 1,681.43
\]
- New Balance after payment of $400:
\[
1,681.43 - 400 = 1,281.43
\]

### Final Answer:
The balance at the end of Month 3 is **$1,281**, which matches the second answer choice.

Would you like further details, or do you have any questions?

---

Here are five related questions for deeper understanding:
1. How would the balance change if the APR were reduced to 20%?
2. What happens to the balance if no payments are made for 6 months?
3. How can the total interest paid over the three months be calculated?
4. What would the balance be if the payments were all delayed by one month?
5. How is credit card interest affected by compound interest over time?

**Tip:** Always pay attention to interest rates and make early payments to reduce interest accumulation!

The following table shows the expenses and payments on a credit card for 3 months, starting with an initial balance of $700. Use the table as a guide to help you find the balance at the end of the third month, to the nearest dollar. Assume that the APR for the credit card is 30% (billed at a rate of 2.5% per month), and that the interest for a given month is based on the balance for the previous month.

Calculate the credit card balance after 3 months, starting with an initial balance of $700 and using a 30% APR (2.5% monthly interest rate). Learn how to factor in monthly expenses and payments to determine the final balance. Suitable for high school students learning about compound interest and personal finance.

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