Name: ______________________ Date: __________ Partner: ______________________
Rates on this sheet are typical for 2026 and marked. The people are made up.
My do now guess: a $500 phone at $25 a month on a store card will cost $__________ in total.
Part A: Debit vs credit, side by side
| Debit card | Credit card | |
|---|---|---|
| Whose money is it? | ||
| When does it leave? | ||
| Is there a bill? | ||
| Is there interest? | ||
| What if the card is stolen? | ||
| Does it build a credit score? |
Credit is _________________________________________________________________
Debt is __________________________________________________________________
Interest is _______________________________________________________________
Part B: Simple interest on $500
The formula: I = P x r x t
(interest = amount borrowed x rate as a decimal x years)
Rates as decimals: 5 percent = 0.05. 15 percent = 0.15. 24 percent = 0.24.
Worked example: $500 at 5 percent for 1 year. $500 x 0.05 x 1 = $25. Total owed: $500 + $25 = $525.
| Rate | What it is like | One year: interest | One year: total owed | Three years: interest | Three years: total owed |
|---|---|---|---|---|---|
| 5 percent | a good car loan | $500 x 0.05 x 1 = $______ | $______ | $500 x 0.05 x 3 = $______ | $______ |
| 15 percent | a credit union card | $500 x 0.15 x 1 = $______ | $______ | $500 x 0.15 x 3 = $______ | $______ |
| 24 percent | a typical bank credit card | $500 x 0.24 x 1 = $______ | $______ | $500 x 0.24 x 3 = $______ | $______ |
At which rate does three years of interest cost more than half the phone? ______________
(Grade 6: one-year columns only.)
Part C: Two more loans
- Ines borrows $1,200 on a store card at 15 percent and pays nothing for two years. Interest: $______ x ______ x ______ = $______. Total owed: $______.
- A used car loan: $8,000 at 5 percent for four years. Interest: $______ x ______ x ______ = $______. Total paid: $______.
- Which loan cost more in dollars? ______ Which cost more as a percent of what was borrowed? ______ How can both be true?
Part D: The minimum payment trap
Leo puts a $500 phone on a credit card at 24 percent APR. That is 2 percent a month. Each month the card adds 2 percent of the balance, then his payment comes off.
The first three months at $25 a month (follow along on the board):
| Month | Balance at start | Add 2 percent | Pay $25 | Balance at end |
|---|---|---|---|---|
| 1 | $500.00 | $10.00 | $25.00 | $485.00 |
| 2 | $485.00 | $9.70 | $25.00 | $469.70 |
| 3 | $469.70 | $9.39 | $25.00 | $454.09 |
Three months in, Leo has paid $75 and still owes $454.09. Copy the finished results from the slide:
| Plan | Months to pay off | Total interest | Total paid for the $500 phone |
|---|---|---|---|
| $25 a month (the minimum) | |||
| $50 a month | |||
| Paid in full the first month |
My recommendation (two sentences, with the numbers):
My do now guess was $______. The real number was $______. I was off by $______.
Part E: The credit score, in one paragraph
A credit score is a number from ______ to ______ that shows ________________________________.
It goes up when I ____________________________________ and ____________________________________.
It goes down when I ____________________________________ or ____________________________________.
It matters because ______________________________, ______________________________, and sometimes ______________________________ look at it.
Grade 8 stretch
- Do months 4 and 5 of the $25 plan by hand and check them against the pattern.
- What monthly payment would clear the $500 in ten months? (Try $55, then $56.) About how much interest is that?
- Three cards: a bank card at 24 percent, a store card at 29 percent, a credit union card at 15 percent. A person with a good score should pick ______________ because ______________________________.
Exit card (3-2-1)
3 differences between credit and debit: ________________, ________________, ________________
2 things that move a credit score: ________________, ________________
1 number: the total cost of the $500 phone at $25 a month: $________