Assume that you have a balance of $3000 on your American Express credit card and that you make no more charges. If your APR is 18% and each month you make only the minimum payment of 4% of your balance, then the formula for the balance after t monthly payments is given by 3000(0.9744)t . What will the balance be after 20 months?
A. $1785.94
B. $980.10
C. $1609.96
D. $4858.62
3000(0.9744^20) = 1785.94
To find the balance after 20 months, we can use the given formula: 3000(0.9744)^t, where t is the number of months.
Plugging in t = 20, we have: 3000(0.9744)^20
To evaluate this expression, we can calculate (0.9744)^20 separately and then multiply it by 3000.
To find (0.9744)^20, we can use a calculator or a spreadsheet software:
(0.9744)^20 ≈ 0.817
Now, multiply this result by 3000:
0.817 * 3000 = 2451
Therefore, the balance after 20 months is approximately $2451.
None of the given options exactly match this result.