1. 1 Press Ctrl-A ©G Dear 2010 – Not to be sold/Free to use Credit Cards Stage 6 - Year 12 General Mathematic

2. 2 A credit card is a type of loan. It is usually paid back monthly. Either 5% of the balance or $10 which ever is the least. Some have an Interest Free period (Higher Interest) some don’t. (Lower Interest) Interest is calculated daily

3. 3 Example 1 John owes $150 on his credit card. How much does he have to repay? 5% = 0.05 x $150 = $7.50 Since it is less that $10 John must repay $10

4. 4 Example 2 Mary owes $250 on his credit card. How much does she have to repay? 5% = 0.05 x $250 = $12.50 Since it is more that $10 Mary must repay $12.50

5. 5 Example 2 Arthur owes $2400 on his credit card. He does not pay it off by the due date. Calculate his monthly interest (16% p.a.). Interest = P r n I = 2400x 0.16 x 1 12 1 month = $32

6. 6 Example 4 DateCreditDebitBalance 1 May$500 15 May$200$300 20 May$100$400 26 May$150$550 1 Jun Repayments Purchases Interest?? 1 st May to 14 th May14 days 15 th May to 19 th May5 days 20 th May to 25 th May6 days 26 th May to 31 st May6 days 14-1 +1 19-15+1 25-20+1 31-26+1 Total 31 days 0.0575% per day21% per annum

7. 7 Example 4 DateCreditDebitBalance 1 May$500 15 May$200$300 20 May$100$400 26 May$150$550 1 Jun Interest?? 14 days 5 days 6 days I =0.000575x $500 21% per annum0.0575% per day x 14 days 0.000575x $300x 5 days 0.000575x $400x 6 days 0.000575x $450x 6 days = $78.20 $78.20