# I need help with this work sheet

How much interest are you paying on your credit cards? How much are you actually paying when you charge something to a credit card? You are not using your own financial information in this assignment, but it is designed to demonstrate your understanding of the cost of credit. Review your Week 3 Learning Activities, especially Focus on Personal Finance, Ch. 5, the Khan Academy Video Reflection, and your iGrad Credit Card Module.
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The Cost of Credit Card Usage Worksheet
FP/100 Version 1
University of Phoenix Material
The Cost of Credit Card Usage Worksheet
Card Module for support in completing this assignment.
1. Calculate the following using the Bankrate calculator. You may use the Bankrate calculator for the
remainder of the questions on this worksheet.
Credit Card
Balance
Interest Rate
Impact of Interest Rates
\$5,000
13%
\$5,000
18%
15%
Number of
Months to Pay in
Full
Total Interest
Paid
Minimum
(interest% of
balance)
Minimum
(interest% of
balance)
Impact of Payment Amounts
\$2,000
15%
\$2,000
Minimum/Fixed
Payment
Minimum
(interest% of
balance)
Fixed \$100
2. In the ?Impact of Interest Rates? example, a 5% interest rate difference results in how much extra
interest paid when making only a required minimum monthly payment equal to the monthly interest,
plus 1% of the outstanding balance?
3. In the ?Impact of Payment Amounts? example, how much total interest would you save by making a
fixed payment of \$100 per month instead of the required minimum payment equal to the monthly
interest, plus 1% of the outstanding balance?
4. How much quicker would you be able to pay off the \$2,000 credit card balance by making a fixed
payment of \$100 each month instead of the required minimum payment?
5. Assume you have a friend who is making the minimum monthly payments on a credit card. Your
friend asks your thoughts on what he or she is doing. Based on these calculations and what you have
should be at least 100 words.
1
The Cost of Credit Card Usage Worksheet
FP/100 Version 1
6. The chart above looks at paying off a credit card balance and assumes you will not be using it while
paying it down. In these minimum payment examples the balance decreases by only 1% each month.
Most of us will use credit cards throughout the year, and that means we may carry a balance past the
grace period. Assuming you were trying to pay off the balance while still using the card, what actions
must you take? Your response should be at least 100 words.
7. What recommendations would you make in regards to properly managing credit card usage and
repayment? Your response should be at least 100 words.
Choosing Between Credit Card Options
Review the Schumer Box information provided below for two credit card options, and then answer the
question that follows.
Annual Percentage Rate (APR)
for Purchases and Transfers
Annual Fee
Transfer Fee
Grace Period
Late Payment Fee
Rewards Program
CARD DISCLOSURES
Credit Card Option A
24.99%, variable
Credit Card Option B
13.24%, variable
24.99%, variable
\$0
3% of balance transferred
20 days
\$25
No
23.24%, variable
\$59
\$0
25 days
\$35
Yes
8. Which one of these two card options would you choose for your personal use? Provide support for
your decision, considering which three attributes are most important to you and trade-offs that you are
willing to accept. Your response should be at least 100 words.
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