StudyXY
RegisterLog in

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
Contributor
4.5
35
6 months ago
Preview (1 of 3 Pages)
100%
Purchase to unlock

Page 1

Ch 4 les 1 - Page 1 preview image

Loading page ...

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."
Preview Mode

This document has 3 pages. Sign in to access the full document!

Study Now!

XY-Copilot AI
Unlimited Access
Secure Payment
Instant Access
24/7 Support
Document Chat

Document Details

Subject
Finance

Related Documents

View all
Past Exams

Texas Life and Health Insurance Exam 150 Questions

A study-sharing site offering verified Q&A for the Texas Life and Health Insurance Exam. Ideal for candidates preparing for certification with updated 2023 content, covering key laws, policies, and insurance concepts.

Class Notes

Understanding Obligation and Deobligation in Resou

Obligation: legally reserving funds for expenses e.g: travel orders. Deobligation: adjusting obligations downward when actual costs are less, freeing funds for other needs. Ensures efficient effective use of finite resources in government operations.

Solved Assignments

Budgeting for Life After High School

High school budgeting activity featuring a real-life scenario for college student Lisa. Students create a zero-based budget using her income, expenses, and support funds to learn personal finance, savings, and responsible spending.

Class Notes

Understanding Credit Reports Analyzing John's Fina

This activity uses John Doe's financial story and a sample credit report to help students learn how to read and understand credit reports. Students analyze his credit use, debts, and recent financial inquiries to answer related questions.

Solved Assignments

Financial Analysis - GE1

This document contains a financial analysis assignment solution.

Solved Assignments

Efficiency Test in US Stock Market

An assignment analyzing the efficiency of the U.S. stock market and its financial implications.

Solved Assignments

Financial Planning and Budget Analysis

A financial study on budgeting techniques and financial planning strategies.

Solved Assignments

Financial Research Report

A detailed report analyzing financial trends, risk factors, and economic indicators.

Solved Assignments

CEO pay at John Deere and Caterpillar

Compares CEO pay at two companies.

Solved Assignments

WACC Project Verizon Communication Inc

This document provides a comprehensive analysis of the Weighted Average Cost of Capital (WACC) for Verizon, offering insights into financial decision-making and investment strategies.