Money Matters--Chapter 4- Making the Minimum Payment
Directions
Zach, a college freshman, recently received his first credit card, which he signed up for during orientation. He promised himself that he would use it only for emergencies. It is now the middle of December and Zach has
to stop working for a couple weeks in order to finish some semester projects, study for and take his finals, and then go home for the holiday break. Since he will not get a paycheck again until the next term in January, he had to use his credit card for the following “emergencies”:
Gas for the drive back home $55
Food (snacks for studying) $45
Christmas gifts for family $225
Books for next semester’s classes $585
_______
$910
Now, what will happen if Zach only makes the minimum payments on this one credit card?
Assuming he charges nothing else and makes every minimum payment on time (two BIG assumptions), it will take him 155 months to pay for these “emergencies.”
Use the chart (Minimum Payment Schedule) on Moodle as you answer the questions that follow.
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