 # Your Money and and Your Math Chapter 13 1. Credit Cards and Consumer Credit 13.2 2.

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Credit Cards and Consumer Credit 13.2 2

You can save money if you know the following: interest rate annual fee fixed variable grace period finance charge Credit Cards 3

Find the new balance, assuming that the bank charges 1½% per month on the unpaid balance. Previous New BalancePaymentPurchases 1. \$100.00 \$10.00 \$50.00 2. \$378.93 \$75.00 \$248.99 Exercises 4

1. Balance = \$100.00  \$10.00 = \$90.00 Finance Charge = \$90.00  0.015 = \$1.35 New Balance = \$90.00 + \$1.35 + \$50.00 = \$141.35 2. Balance = \$378.93  \$75.00 = \$303.93 Finance Charge = \$303.93  0.015 = \$4.56 New Balance = \$303.93 + \$4.56 + \$248.99 = \$557.48 5

Use the following rates and payments table to find the following: a.finance charge for the month b.new balance c.the minimum monthly payment 1. Previous New Balance Purchases \$271 \$91 6

Finance Charge = \$271.00  0.015 = \$4.07 New Balance = \$271.00 + \$91.00 + \$4.07 = \$366.07 Minimum Monthly Payment = 0.05  (\$366.07)=\$18.30 Solution 7

2. Previous New Balance Purchases \$760 \$80 8

Bill Seeker bought a boat costing \$8500 with \$1500 down, the balance plus add-on interest to be paid in 36 monthly installments. If the add-on interest was 18%, find a.the total interest charged. b.the monthly payment to the nearest dollar. Exercise 9

Solution 10

a. Ordinary Annuity: b. Annuity Due: S = future value of annuity R = rate of payment 11

Ordinary Annuity: an account which receives regular periodic deposits at the end of each compounding period. Tyler has set up an ordinary annuity account and will be making monthly deposits of \$150.00 with deposits earning 5.2% per year compounded monthly. Find a.the value of the annuity in 12 years. b.the total deposits Tyler will make. c.the interest earned. 12

c. Earned interest = \$29,902.99  \$21,600.00 = \$8,302.99 13

Annuity Due: an account which receives regular periodic deposits at the beginning of each compounding period. Find the future value of an annuity due, if payments are made of \$350 and interest is 4.25% compounded quarterly for 21 years. 14

Find the present value of an ordinary annuity, if payments are made of \$475 at the end of each quarterly period for 28 years at 8.00% compounded quarterly. 15

Find the amount of each payment to be made into a sinking fund so that enough money will be able to pay off a loan of \$29,250 due in 15 years if money is earns 7.25% compounded monthly. Assume this to be an ordinary annuity. 16

If Russell wanted to start making payments today, what would be the amount of each payment into a sinking fund so that enough money will be able to pay off a loan of \$18,300 due in 14 years if money is earns 4.00% compounded quarterly. 17 END