It is one thing to tell students that credit cards carry high interest rates, it is probably more effective for learning to have them actually input those high interest rates into their own credit card calculator to see the impact on payments.  In this activity “Excel: Build a Credit Card Calculator,” students get an opportunity to flex their spreadsheet muscles through an activity that provides four options based on level of expertise.  Please share this with your math department too as this activity helps students understand the mathematical underpinnings of credit card calculators and develop a deeper understanding rather than just inputting factors into an online calculator.

The activity starts with a basic scenario that includes information about a credit card balance, a minimum payment amount and an A.P.R. (Annual Percentage Rate).  It then scaffolds the problem based on the level of Excel skills of your students so that it meets them where they are at.  For students with no Excel skills, it provides hints to allow students to complete the task the old-fashioned way, through basic math operations.  The students are asked questions regarding time to pay off this credit card balance as well as the amount to be paid off so students can see that a $1,000 credit card balance paid down by the minimum payment each month has a multiplier effect (like compound interest working against you as a borrower!).

Enjoy!

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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