Browse the Topics, Table of Contents, and Index
Follow us:
Twitter Facebook

6.2 Buying Now, Paying Later

6.2 Buying Now, Paying Later
  • Math Help

    Note that Example 3 has been simplified for illustrative purposes and you are not expected to know how to create the spreadsheet shown in Example 3. For instance, to calculate the interest, you would need to know the average daily balance, the number of days in the billing period, and when any payments are made. The point of the example is to demonstrate how long it takes to pay off a credit card when making only minimum payments. You can learn more about credit cards in Exercises 19-24.

  • Consumer Suggestion

    Did you know that plasma televisions don't work at high altitudes because of the pressure differential between the gases inside the screen and the air pressure? To learn more about plasma TV's and read reviews and recommendations, check out the Plasma TV Buying Guide.

  • Checkpoint Solution
    1. Using a spreadsheet, you can see that it would take 66 months to pay off the debt if you paid $75 each month.

    2. Sum the interest column to see that the total interest paid is $2390.86.
  • Comments (1)

    These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.
    When posting a comment, you agree to our Terms of Use.

    __    __   __   __     _____   __   __            
    \ \\ / //  \ \\/ //   / ___//  \ \\/ //     ___   
     \ \/ //    \ ` //    \___ \\   \ ` //     /   || 
      \  //      | ||     /    //    | ||     | [] || 
       \//       |_||    /____//     |_||      \__ || 
        `        `-`'   `-----`      `-`'       -|_|| 
    Showing 1 comments
    Subscribe by RSS
    system user
    Ron Larson (author)1 decade ago |
    Look closely at the figures in Example 3. The lesson for personal budgets is clear.
    1. If you use a credit card, pay it off each month.
    2. If you can't pay the card off each month, pay as much as you can afford.
    3. If you only make the minimum payment, expect to pay outrageous interest charges.