Ch 4 les 1

Zach, a college freshman, uses his new credit card with a 19% APR for emergencies during a work break, facing minimum payments that may lead to costly interest and debt.

Mason Bennett
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Minimum Payments MeanCostly ConsequencesCHAPTER 4,LESSON 1DIBECnONSRc-jd the soemrio below. analyze- the data, andusethe Minimum Fbymcni Schedule chan to answer thefollowing questions.The ScenarioZach,3collegefreshma n, recently signed upfor and received hisfi rstcredit card. Thecredrtcard has a 19% annual percentage rate (APR}—that's the interest rate he'll have to pay to usethe money he bonows—and it has a minimum payment of only $10 or 2.5%ofthe balance(whichever is larger}. Zach promised himself that he would use the credit card only foremergencies. I n t h e m i d d l e o f Decernber, Zach had to take off work for a couple weeks tofinish some end-of-semester projects, study for h is finals, and spend time at home over theholiday break. Sinee he won t get a paycheck again until January, he used his credit card forseveral item she considered emergencies.U C MI CREDIT CARDEMERGENCIESGas farthe drive back, home5 5 5Food (srucks far stu dying)5 4 5Christmas, gifts for family5 2 2 5Books for next semester sclasses5 5 9 5Total Dobt5910Many people in debt only make the minimum monthly payments on their credit cards.So, what will happen if Zach just makes the minimum payments on this one credit card?Assuming he charges nothing else and makes every minimum payment on time (two tigassumptions), it will take him 154 months to pay for these 'emergencies."
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