ANSWER THE FOLLOWING QUESTIONS (AS YOU PROGRESS THROUGH THE LAB):

1. Explain why the minimum monthly payment required exceeds the interest accrued in a month. What would happen to the card balance if the minimum required payment was less than the accrued interest?

If the minimum required payment was less than the accrued interest, the amount owed would continue to grow, as will the total interest owed because the amount payed of is less that the charges added.

1. What was your first payment? What was the balance after the first payment?

The first payment is 50 and the balance after the first payment is $1980

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1. How many months did it take to pay off the credit card paying the minimum? How much interest did you pay?

50 months- the Interest is 60%

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1. How many months did it take to pay off the credit card paying the minimum+10? How much interest did you pay?

1. How many months did it take to pay off the credit card paying $50 per month? How much interest did you pay?

It took 40 months to pay off the debt . When paying the minimum for 40months the total is 607.5 60% that is 364.5.

MTH 110 PROJECT #1: PART II: CREDIT CARD DEBT -- ANSWER SHEET PAGE 2

1. How long did it take to pay off the credit card paying the minimum at 1%? How much interest did you pay?

The interest is greater than the minimum required. It is infinity because you are never gonna payoff because the amount it is increasing .

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1. How long did it take to pay off the credit card paying the minimum+10 at 1%? How much interest did you pay?

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1. How long did it take to pay off the credit card paying $50/month at 1%? How much interest did you pay?

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1. What does all of this tell you about credit cards and minimum payments?

(Provide a concise, hard-hitting paragraph. Use complete sentences, and use proper grammar)

MTH 110 PROJECT #1: PART II: CREDIT CARD DEBT LAB INSTRUCTIO0NS PAGE 3

1. Purpose: To use Excel to analyze various credit card situations.

1. Getting Started: Locate the Excel icon or shortcut and double click. A blank workbook will open with multiple worksheets.

1. Four scenarios:

1. Credit Card Debt (#1): You have a credit card on which you owe $2000. Your credit card company charges a monthly interest rate of 1.5% and requires a minimum monthly payment of 2.5% of your current balance or $5.00, whichever is larger. Answer question 1.

Suppose you decide to pay off your $2000 credit card debt by making only the minimum required payment each month. Assume that you make no further charges to the card. To see how long this takes and how much you end up paying, do the following:

1. a.Go to a blank worksheet and name it Min Pay. To do this, double-click on Sheet1 and type in the new name.
2. b.First, we will enter labels: In cell A1, enter Initial Balance; in cell A2, enter Interest Rate; and in cell A3, enter Min. Payment.
3. c.We will start with the initial values: in cell B1, enter 2000; in cell B2, enter .015; and in cell B3, enter .025.
4. d.Add more labels and initial values: in cell A5, enter Month; in cell B5, enter Payment; and in cell C5, enter Balance. In cell A6, enter 0; in cell C6, enter = $B$1 .
5. e.Do the monthly calculations: in cell A7, enter 1; in cell B7, enter =max(5,round(C6*$B$3,2)) (your payment is the maximum of $5 or 2.5% of the previous balance); and in cell C7, enter =C6*(1+$B$2)-B7 (your new balance is the previous balance plus the interest less the payment). Answer question 2.
6. Highlight cells A7--C7, place the cursor in the lower right-hand corner of cell C7 (the cursor should be a solid black cross), and drag down until the value in column C becomes negative.
7. g.Once you've determined how long it takes to pay off the credit card, determine how much you paid: click the cell in the B column next to the first negative number in column C, then click on the button followed by Enter (make sure the Home tab is selected). Answer question 3.

MTH 110 PROJECT #1: PART II: CREDIT CARD DEBT -- ANSWER SHEET PAGE 4

1. Credit Card Debt (#2): Same story as above. This time, however, you pay $10 more than the minimum or $25, whichever is larger.

1. Copy the Min Pay worksheet. With the Home tab selected, select the Format drop-down menu, then the Move or Copy Sheet\... option. Click Create a copy then press OK. A new worksheet named Min Pay(2) is created. Rename this sheet Min Pay +10.
2. Edit the payment so that you're always paying $10 more than the minimum OR $25, whichever is larger: edit cell B7 to be =max(25,round(C6*$B$3,2)+10) .
3. Highlight cells A7--C7, place the cursor in the lower right-hand corner of cell C7 (the cursor should be a solid black cross), and drag down until column C becomes negative.
4. Once you've determined how long it takes to pay off the credit card, determine how much you paid: click the cell in the B column next to the first negative number in column C, then click on the button followed by Enter (make sure the Home tab is selected). Answer question 4.

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1. Credit Card Debt (#3): Same story. This time, you pay $50 each month.

1. Copy the Min Pay worksheet as you did above and rename this sheet Pay 50
2. Edit the payment so that you're always paying $50: edit cell B7 to be =50 .
3. Highlight cells A7--C7, place the cursor in the lower right-hand corner of cell C7 (the cursor should be a solid black cross), and drag down until column C becomes negative.
4. Once you've determined how long it takes to pay off the credit card, determine how much you paid as you did in the previous two problems (click the cell in the B column next to the first negative number in column C, then click on the button followed by Enter). Answer question 5.

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1. Credit Card Debt (#4): Not quite the same story. This time, you've transferred the balance of the credit card to another credit card with the promise of a lower monthly interest rate--1% instead of 1.5%.

1. In the Min Pay worksheet, change cell B2 to .01. In the B column next to the first negative value in Column C, use Autosum to determine how much you paid. Answer question 6.
2. In the Min Pay+10 worksheet, change cell B2 to .01. In the B column next to the first negative value in Column C, use Autosum to determine how much you paid. Answer question 7.
3. In the Pay 50 worksheet, change cell B2 to .01. In the B column next to the first negative value in Column C, use Autosum to determine how much you paid. Answer questions 8 & 9.