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Download the
CreditSavings model
for the lesson.
Pay with Savings
Use the following formula to calculate the monthly amount of the monthly amount
of savings it would take to save $1000 in 11 months. The annual saving rate is 3%.
A = Principle * rate * time
Assume that savings is calculated on 30 days per month.
The rate will be calculated on a 360day basis.
Use the savings model to check you answer. Experiment with different rates and savings
payment plans.
Pay with credit
You purchased $1000 dollars in gifts on your credit card.
What is the monthly payment required to payoff the credit card within 11 months?
Using the simple interest formula calculate the annual rate.
Try calculating interest using the simple interest:
A = Principle * (1 + rate)^{time}
The credit card model should be used for this part of the lesson.
The Interview
Come up with a definition of the following terms. Put the answer in your own words.
 Revolving Agreement
 Charge Agreement
 Installment Agreement
We use credit to purchase an education, a house, a car, or gifts for our loved ones
and friends. Is there good or bad credit?
What do you think?
Type a 1 page paper (12 point Arial font  double spaced)address the following
statements/questions:
 List examples of purchases that you would consider putting on credit. Label them
"Good" or "Bad".
 Would you choose to save the money starting at the beginning of the year, or would
you to put your purchases on a credit card and pay the balance of over the following
year? Why?
 Explain your current view of credit.
This lesson is worth 10 project points.
Done Early?
Take a look at how credit cards work
Ready, Set, Credit.
Discuss the article with an adult or friend. Complete the read along
inquiry
.
