Sylvia Kierkla, Paige Belcastro, & Jordyn Pedersen

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Presentation transcript:

Sylvia Kierkla, Paige Belcastro, & Jordyn Pedersen Credit Cards Sylvia Kierkla, Paige Belcastro, & Jordyn Pedersen

How Credit Card Companies Use Calculus Used to calculate the minimum payment needed on the card. Calculated by the amount of money that is due by a certain time. Also calculates the interest rate given. All those parts together provide the customer with an accurate minimum balance.

Background Information Our topic was inspired by Credit for Life. We believe its important to understand credit cards as we become adults. Credit cards have changed consumer spending habits and are a crucial part of today’s economy.

Key Terms Interest-money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt Interest Rate/Annual Percentage Rate (APR) - The yearly percentage rate of the finance charge. The annual percentage rate will be a fixed or variable rate Fixed Rate - A fixed annual percentage rate of the finance charge Variable Rate - A rate that can increase or decrease with the changes of the Prime Rate or London Interbank Offer Rate (LIBOR) Finance Charge - The amount of interest charged to an account for the billing cycle Minimum Monthly Payment – the smallest amount of money you need to pay on your credit card bill each month

Sample Problem Given: Current balance: $5,400.00 Interest rate: 9.75% Minimum Payment: $20.00 Finding Interest Amount: $5,400 (.0975/12)= $43.88 Minimum Payment: $20.00+$43.88= $63.88

Video https://www.youtube.com/watch?v=Vz05A6cP6Iw

Conclusion In the end this problem shows that you should never just pay the minimum required payment because there is interest and you will end up paying much more than you need to. Instead pay more than the minimum and you will pay off any debt you have much faster.

Citations Osler, Jonathan. "Credit Cards 101." Radical Math. 2006. Web. 5 Mar. 2015.