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Context 6 - Credit Cards 2

Last updated about 2 years ago

21 Nsɛmmisa

Hyɛ no nsow a efi ɔkyerɛwfo no hɔ:

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20.

Give at least two reasons for why people might not pay more than the minimum required payment each month.

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21.

Choose one of your reasons from #20. Give advice to someone who might plan to make minimum payments. Back up your advice with mathematics

Link for website needed for assignment:

https://financialmentor.com/calculator/credit-card-payoff-calculator

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1.

Using the $150 fixed payment, 5,934 balance, and 20% interest rate, how many months would it take to pay off the credit card?

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2.

How much money would you pay in total interest?

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3.

What percentage of your original balance is this amount?
Hint: Divide the interest by the total original balance.
Round your answer to the nearest whole percent like 43%

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4.

How much did you spend in total by using a credit card?

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5.

Click on "Create Payoff Amortization Schedule". Calculate the interest to payment ratio for the first month.
To do this, divide the interest by the total payment.
Enter your answer as a percent rounded to 1 decimal point like 23.4%

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6.

Click on "Create Payoff Amortization Schedule". Calculate the interest to payment ratio for the 15th month.
To do this, divide the interest by the total payment.
Enter your answer as a percent rounded to 1 decimal point like 23.4%

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7.

Click on "Create Payoff Amortization Schedule". Calculate the interest to payment ratio for the 30th month.
To do this, divide the interest by the total payment.
Enter your answer as a percent rounded to 1 decimal point like 23.4%

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8.

Is the interest to payment ratio constant throughout the table? Why do you think that it is?

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9.

After how many months does more of your payment go towards the principal instead of the interest?

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10.

If you paid $300 every month, how many months would it take you to pay off your credit card? (Assuming you don’t add any more debt to your credit card.)

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11.

How much money would you pay in total interest?

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12.

What percentage of your original balance is this amount?
Round your answer to the nearest percent like 43%

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13.

How much did you spend in total by using a credit card?

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14.

After how many months does more of your payment go towards the principal instead of the interest?

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15.

If you paid $500 every month, how many months would it take you to pay off your credit card? (Assuming you don’t add any more debt to your credit card.)

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16.

How much money would you pay in total interest?

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17.

What percentage of your original balance is this amount?
Enter your answer rounded to the nearest whole percent like 43%

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18.

How much did you spend in total by using a credit card?

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19.

Scroll down and look at the amortization table. After how many months does more of your payment go towards the principal instead of the interest?