Remember: APR is the yearly price of owing, as a percent of what is owed. Time matters, and a lower APR costs less. These are pretend coins; ask a grown-up to read a real offer with you.
Read and answer
Read the story first, then answer.
The card offer in LarkspurIn the pretend village of Larkspur, Ana opened a card offer with three big letters on it: APR. That means annual percentage rate, the yearly price of owing. Percent means out of one hundred, so twenty percent is twenty in every hundred. For Ana, who owed 60 coins, 20 percent means 2 extra for every 10 owed. Sixty is six tens, so owing 60 for a whole year costs 12 extra. Owe it for half a year and the extra is half, 6 coins. Three months make 3 coins, and one month makes 1 coin, because the yearly price is shared across the months. In this village, paying the whole bill by the due day adds no extra, so the APR only matters when something is left owing. Ben showed Ana his card. "Mine says 10 percent, not 20," he said. For 60 coins over a year, that is 6 extra, not 12. Think of three things multiplied: the coins owed, the percent and the time. Twenty percent a year is not 20 coins a month, but about 1 coin a month on 60. The APR is usually boxed near the top of an offer. Ask three things: the APR, the due day and any fee.
1
APR stands for annual percentage , the yearly price of owing.
limitfeerate
2
Ana owes 60 coins at 20 percent. That is 2 extra for every 10 owed. For a whole year the extra is coins.
3
Ana owes the 60 coins for only 6 months at 20 percent. How many extra coins?
12620
4
Ben's card says 10 percent. On 60 coins for a year, the extra is coins.
5
In Larkspur, paying the whole bill by the due day adds no extra.
TrueFalse
6
Two offers cost the same coins for the same time. Which costs less?
The offer with the higher APRThe offer with the lower APRThey cost the same
Match, order and fix
7
Join each one to what it tells you.
1APR
2Due day
3Late fee
4Percent
Athe yearly price of owing
Bout of one hundred
Cpay in full by then and there is no extra
Dwhat a late bill costs
8
Number these by the extra Ana pays on 60 coins, least first.
Owe it for 3 months
Owe it for 1 month
Owe it for 6 months
Owe it for 12 months
9
Kit says: 20 percent a year means 20 coins every month. Is Kit right?
YesNo
10
Circle every line worth reading on a card offer.
The APRHow shiny the banner isThe due dayAny feeThe color of the card
11
Ben says: 10 percent of 60 is 10 coins. What is his mix-up?
He took the percent for the coins. It is 6He should have said 12He forgot the due day
12
Stretch: 30 percent is 3 extra for every 10. For 60 coins owed a year, the extra is coins.
13
Write the three things to ask about on a card offer.
14
Draw a card offer and put a box around the APR near the top.
Scan the code at the top to mark this sheet on screenTake a photo of your answers or type them. It is marked for you automatically, and your score is kept.
Answer key · Set A
Credit cards and APR
1rate APR means annual percentage rate, the yearly price of owing.
212 60 is six tens, and 6 × 2 = 12.
36 Half a year costs half of 12, which is 6. Twenty is the percent, not the coins.
46 10 percent is 1 extra for every 10, and 60 is six tens, so 6 × 1 = 6.
5True The APR only matters when something is left owing.
6The offer with the lower APR A lower APR costs less for the same coins and time. Here, 10 percent costs less than 20.
71-A, 2-C, 3-D, 4-B The APR is the yearly price, the due day is the pay-by day, the late fee is the cost of being late, and percent means out of one hundred.
82, 1, 3, 4 One month costs 1 coin, three months 3, six months 6, and twelve months 12.
9No The year is the unit. On 60 coins it is 12 extra a year, about 1 coin a month.
10The APR, The due day, Any fee The APR, the due day and any fee show the cost. A shiny banner or a color does not change what a card costs.
11He took the percent for the coins. It is 6 Ten is the percent, not the coins. 10 percent of 60 is 6.
1218 60 is six tens, and 6 × 3 = 18.
13Your own words: a grown-up reads it.
Mark each answer, count the right ones and write the score on the sheet.