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Cogito

Consumer Math · Chapter 4 · Lesson 1

Practice Worksheet

Credit Cards and Minimum Payments

The most expensive way to borrow.

12 problems · about 22 minutes · TEKS M.M.4.A

NameDate

Figure — use these to answer the problems

Interest charged against the minimum payment. When the bars are close, almost nothing comes off the balance.
Monthly interest60
Minimum payment75
Monthly interest60
Minimum payment75
Figure 1

Warm Up

Straightforward practice. Get the method working first.

5 problems

  1. APR 12%. What is the monthly rate, in percent?

    Answer

  2. Why does a minimum payment barely reduce a balance?

    • Most of it covers the interest just charged.
    • The bank keeps it as a fee.

  3. APR 24%. Monthly rate in percent?

    Answer

  4. $3000 at 2% a month. Interest in dollars?

    Answer

  5. Minimum of 2.5% on $3000. Payment in dollars?

    Answer

Build It Up

The same ideas with more to keep track of.

3 problems

  1. Payment $75, interest $60. How much comes off the balance, in dollars?

    Answer

  2. $1200 at 1.5% a month. Interest in dollars?

    Answer

  3. Paying the full statement balance on time. Interest charged, in dollars?

    Answer

Stretch Yourself

Mixed problems. Work out what kind of question it is before you start.

4 problems

  1. Put the debt payoff priorities in order, best first.

    Write 1 to 4 in the boxes to put these in order.

    • Pay the full statement balance every month.
    • Pay well above the minimum on any balance carried.
    • Clear the highest rate debt first.
    • Pay only the minimum.

  2. $5000 at 2% a month. Interest in dollars?

    Answer

  3. The Monthly Rate

    An APR of 18%. What is the monthly rate, in percent?

    Answer%

  4. The Charge

    A $2000 balance at 1.5% a month. Interest this month, in dollars?

    Answerdollars