Task: Is It a Deal?

Task: Is It a Deal?

NAME: DATE:

Directions:

Jesse did the math on a laptop deal and realized the bargain wasn’t a bargain at all. See if you can spot a bargain in the offers below. For each purchase, check the option that you think would be the best credit deal.

Computer. You have two options to purchase a computer priced at $1,400.

Store Financing: 24 monthly payments at 11.9 percent interest

Credit Card: 36 monthly payments at 15.9 percent interest

Stereo System. Select an option to purchase a stereo system that costs $800.

Store Financing: 12 monthly payments at 13.5 percent interest

Credit Card: 24 monthly payments at 18 percent interest

Car. You can purchase one of the following new cars from a local dealer.

Car A: costs $20,000 at 7 percent interest for 60 months

Car B: costs $23,000 at 3.9 percent interest for 30 months

Screen TV. Choose an option to purchase a $1,900 TV.

Store Financing: no payments for 90 days, but interest charges start immediately
at 10 percent interest; then 6 months of payments.

Credit Union: 11 percent interest for 12 months

Truck. You have two options to purchase a new truck selling for $25,000 from a local dealer.

Option A: $1,500 cash back now with 2.9 percent interest for 48 months

Option B: $0 cash back at 0.9 percent interest for 36 months

©2012 National Endowment for Financial Education Lesson 2-2: Credit Costs

High School Financial Planning Program www.hsfpp.org Task: Is It a Deal?