Consumer math questions & worksheet

Card Name (APR %)	Existing Balance	Credit Limit
MarK2 (6.5%)	$475.00	$3,000.00
Bee4 (10.1%)	$1,311.48	$2,500.00

You have $400.00 each month to pay off these two credit cards. You decide to pay only the interest on the lower-interest card and the remaining amount to the higher interest card. Complete the following two tables to help you answer questions 1–3.

Higher-Interest Card (Payoff Option)

Month	1	2	3	4	5	6	7	8	9	10
Principal
Interest accrued
Payment (on due date)
End-of-month balance

Lower-Interest Card

Month	1	2	3	4	5	6	7	8	9	10
Principal
Interest accrued
Payment (on due date)
End-of-month balance

1) How long does it take to pay off the higher-interest card?

2) What is the amount of the last payment on the higher-interest card? Why?

3) At the end of the month that you pay off the higher-interest card, after you have started to pay down your debt on the lower-interest card, what is the balance of the lower-interest card? Why?

Complete the following two tables to help you answer questions 4–5.

4) Rework the problem so that you pay off the lower-interest card first.

5) How much money do you save by paying off the higher-interest card first?

Lower Interest Card (Payoff Option)

Month	1	2	3	4	5	6	7	8	9	10
Principal
Interest accrued
Payment (on due date)
End-of-month balance

Higher Interest Card

Month	1	2	3	4	5	6	7	8	9	10
Principal
Interest accrued
Payment (on due date)
End-of-month balance

Be sure to include in your response:

· All parts of the tables are complete and calculations correct

· The answers to the additional questions