1. Exponential Functions – Personal Finance
Basic Formula for Compound Interest:
A = P(1 + r/n)nt
A = Final Amount
P = Beginning Amount
r = rate – expressed as a decimal
n = number of compound periods in one year
t = time in years

2. Credit Cards - Purchases
Most credit card rates are in the range of 18-26%
Credit card bills come monthly
Only a minimum payment is required
You can choose to pay:
The minimum payment
The full balance every month.
Some amount in between.
Interest Due to the Credit Card Company is calculated on the unpaid portion of the bill

3. Credit Cards - Purchases
Credit Card First Example:
You purchase a $1500 TV.
Option 1 – Only paying the minimum balance
Option 2- paying $100 per month
Option 3 – paying the full amount when you get the bill

4. Credit Card Purchases – Day 2
You get a bill today for $3000 for your credit card this month.
Figure out:
How many months would it take to pay off this bill if you pay $200 each month (Assume your credit card is 21% interest).
How much extra does this cost you?