Lesson 3: The Cost of Credit
Duration of Days: 6
Lesson Objective
Students will calculate how much a $500 purchase actually costs if only the "minimum payment" is made.
If I buy a $1,000 TV on a credit card, why do I end up paying $1,500?
Principal
Interest Rate
Minimum Payment
Debt
CCSS.MATH.CONTENT.HSF.LE.A.1
Description: Students use a "Credit Card Interest Calculator" to see the "hidden" cost of time.
Purpose: Building a healthy fear of high-interest debt.
DOK Level: 3.
Use a "Debt Visualizer" (a bar graph that grows over time); simplify calculations to 10% interest for easier mental math.
Comparison chart showing the cost of a pair of shoes ($100) paid in cash vs. paid over 12 months on a card and other examples.
Online interest calculators, "Debt Trap" visual infographic