Work on the credit card problem Assignment, red pen, highlighter, notebook, graphing calculator, pencil U3D12 Have out: Bellwork: Work on the credit card problem total:

The first day of college you pick up a credit card application for a Citibank Credit Card. It boasts no interest for the first 7 months. However, in the fine print it mentions the rate goes up to 21.99% APR every month thereafter. Annual interest for a credit card is compounded monthly. In the first year you decide to charge $2,200 for new bed sheets, a new TV, a new iphone… use your imagination. ($2200 is the average credit card debit for college students according to a 2008 study published by Nellie Mae.) Since your credit card does not charge interest for 7 months, you decide to wait to pay it back. Time slips by, and 5 years and 7 months later, you finally decide to pay off the card now that you are a college graduate.

I shouldn’t have signed up for all those credit cards in college! 1. How much will you owe after 7 months? (Recall: there is 0% interest for 7 months.) ___________ (We will ignore late fees, etc, throughout the problem.) $2,200 +2 I shouldn’t have signed up for all those credit cards in college! 2. How much will you owe after the remaining 5 years when the interest jumps to 21.99% APR? (Hint: t = 5 years and the interest is compounded monthly) A(t) = total amount A0 = ________ t = _______ n = ______ r = ______ A(5) = ____________ +1 +2 +1 +1 $2,200 5 years 12 0.2199 $6540.44 +2 3. How much more do you owe in interest only? (Hint: Take the difference between # 1 and # 2.) 6540.44 – 2200 = +1 $4,340.44 total: +2

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Get together with some classmates and complete the STT. It is time for the… Study Team Test Get together with some classmates and complete the STT.

Old bellwork

10/21/10 Have out: Bellwork: Solve each problem. Assignment, red pen, highlighter, notebook, graphing calculator, pencil 10/21/10 Have out: Bellwork: Solve each problem. A new $1500 computer depreciates 31% per year. How much will the computer cost in 4 years? When will the computer be worth $1? Round to the nearest year. 2. Uniqua invests $1200 into an account earning 3.5% annual interest compounded quarterly. How much will she have in 15 years?

A new $1500 computer depreciates 31% per year. How much will the computer cost in 4 years? V(t) = k(m)t initial value = $1500 V(t) = 1500(0.69)t multiplier = 100% – 31% = 69% V(4) = 1500(0.69)4 = 0.69 V(4)  $340.01 time = 4 The computer will be worth about $340.01 in 4 years. b) When will the computer be worth $1? Round to the nearest year. Use your calculator’s table to find the answer. V(t) = 1500(0.69)t 1 = 1500(0.69)t t  20 years 1500 1500 The computer will be worth $1 in about 20 years.

2. Uniqua invests $1200 into an account earning 3 2. Uniqua invests $1200 into an account earning 3.5% annual interest compounded quarterly. How much will she have in 15 years? A(t) = amount (value) A0 = 1200 n = 4 r = 0.035 t = 15 $2023.92

It’s time to grade Quiz #2. Take out a red pen. It’s time to grade Quiz #2.