What are the advantages and disadvantages of different ways to pay bills?

Transcription

1 ? Name 17.4 Essential Question Paying Bills What are the advantages and disadvantages of different ways to pay bills? Personal Finance Literacy 5.10.C MATHEMATICAL PROCESSES 5.1.E You go into a store and see something you want to buy. Should you pay with cash, the money in your wallet, or another way? A check is a written order asking a bank to pay a certain amount from your account. Sometimes it takes several days for a bank to pay the amount on a check. In your checkbook, there is a place to record how much you have and how much you spend. A credit card is an identification card issued by a bank that allows a user to buy items and services immediately and pay the cost at a later time. The bank might charge the user interest in exchange for the use of the money. A debit card is an identification card issued by a bank that allows a user to immediately use money from an account. You have a personal identification number (PIN) to keep it safe. Unlock the Problem Mrs. Pastella wants to buy an easel for $100 at a store. She has no cash with her. Complete the table below to help her determine the method of payment she should use. Write the letter of the statements to show the advantages and disadvantages of each method. A statement can go in more than one place. Check Credit Card Debit Card Advantages Disadvantages A. PIN can make it secure I. Can buy now and pay later B. May owe more money than I can pay back C. Could be bulky to carry J. Need to remember PIN K. Need to have enough in my account D. Less likely to overspend L. Could lose the card E. Takes time to write it out M. Can run out of checks F. Convenient and easy to carry around G. Provides a space to record expenses H. Easy to forget to record how much I spend N. May have to pay interest O. Could be stolen Module

2 Example 1 Sometimes it is not possible to use cash or a check. In such cases, you can use a credit card or one of several methods of electronic payment. These methods are especially useful when you shop online. Some companies offer money transfer services to send money immediately from your account to the seller. There is usually a fee for the service. Some sellers let you pay the cost in several parts. You set up automatic payments that transfer a set amount of money from your account at specific times. You usually pay a fee for spreading out the payments. Automatic payments are also useful for bills that occur regularly. Write the letter of the statements to show the advantages and disadvantages of each method of payment. A statement can go in more than one place. A. Useful for monthly bills B. Can buy now and pay later C. May have to pay a fee or interest D. Convenient and easy to carry around E. May forget that a payment will be made F. Fast way to send money G. May owe more money than I can pay back H. Need to have enough in my account I. Could be stolen Advantages Disadvantages Credit Card Money Transfer Automatic Payments Share and Show 1. The total cost of buying a computer online using automatic payments: = + =. 2. The total cost of buying a computer online using a credit card: = Math Talk Mathematical Processes Which method would you use to buy the computer and why? PRICE OF A COMPUTER C-Mart Computer Store: Cash:$625 ComputerWorld.com 4 easy payments of $150 + $10 fee per payment Credit Card: $575 + Interest* *Interest: $50

3 Name Problem Solving 3. Apply Name one method of payment that allows you to use money in your account and one method that alows you to pay the amount at a later time. 4. Analyze What are the advantages and disadvantages of the methods you chose in Exercise 3? Problem Solving 5. Multi-Step Ty researches how much he would pay if he used various methods of payment to buy a chemistry set. If he pays $0.10 in interest for every dollar on his credit card, which method should he use to buy the chemistry set? Explain. Price of a Chemistry Set ABC Toys Cash: $175 Check or Debit Card: $175 + $5 processing fee Books.com (free shipping!) 4 payments of $30 + $40 fee Credit Card: $150 + interest 6. Liam s bank pays the amount on a check five days after it is written. If Liam wants to make a payment immediately, which method of payment could he use? Explain. Module 17 Lesson 4 637

4 Daily Assessment Task Mathematical Processes Fill in the bubble completely to show your answer. 7. Jen wants to buy a camera. Which method will let her buy now and pay later? A B C D check cash credit card money transfer 8. Antoine owes $684. He can make six monthly automatic payments with a $2.50 fee for each payment, or he can pay using a credit card. If he uses his credit card, he will pay $30 in interest. How much money does he save by using automatic payments? A $15 C $ B $114 D $16 9. Multi-Step Lester buys a sofa for $560. He pays $200 first and pays the rest over 6 months using automatic payments. How much will he pay each month? A $360 B $60 C $93.33 D $ TEXAS Test Prep 10. Which of the following is an advantage of using a check to pay bills? A You can buy now and pay later. 638 B C D The money is transferred immediately. You can pay using money in your account. You may have to pay interest on the amount.

5 Homework and Practice Name Personal Financial Literacy 5.10.C MATHEMATICAL PROCESSES 5.1.E 17.4 Paying Bills Angelina made a chart to compare the cost of buying a game console using different payment methods. Use the chart for The total cost of buying a game console at Ed s Discount Store is. 2. The total cost of buying a game console online using automatic payments: _ ( _ + _ ) = _ 3. The total cost of buying a game console using a credit card: _ + _ = _ PRICE OF A GAME CONSOLE Ed s Discount Store: $229 GameStore.com (free shipping) 3 payments of $75 + $5 per payment Credit Card: $219 + $10.95 interest 4. Why might Angelina choose to purchase the game console using a more expensive payment method? Problem Solving 5. Jada researches various methods of payment to buy a video game. If Jada pays $0.03 in interest for every dollar on her credit card, which method will be the least expensive? Which method is the most expensive? 6. Oliver pays $0.05 interest for every $1 he spends using his credit card. Explain how he can use mental math to find the total cost of a $300 tablet computer. PRICE OF A VIDEO GAME Paula s Game Store Cash: $49 Check or Debit Card: $49 + $5 processing fee Games.com (free shipping) 2 payments of $26 + $2 per payment Credit Card: $48 Module 17 Lesson 4 639

6 Lesson Check TEXAS Test Prep Fill in the bubble completely to show your answer. 7. Which of the following is NOT an advantage of using a debit card as your payment method? A B C D You can buy now and pay later. A personal identification number helps keep your account safe. It is convenient to carry around. You are less likely to overspend. 8. Harrison pays $0.02 in interest for every $1 that he spends on his credit card. How much interest will Harrison pay on the purchase of a $78 camera bag? A $1.40 B $1.56 C $15.60 D $ Multi-Step Charlotte wants to buy some books online that have a total cost of $162. She plans to make six equal monthly payments. Each month, she will be charged a $1.75 processing fee. How much will Charlotte pay each month? A $27.00 B $25.25 C $28.75 D $ Multi-Step Ethan wants to buy a new watch that costs $112. He pays $0.04 in interest for every $1 that he spends on his credit card. How much will Ethan save by paying with cash? A $2.80 B $1.04 C $0.45 D $ Multi-Step Enrique buys a jacket for $35 and pants for $29. Sales tax is $0.07 for every dollar of the purchase price. He pays a $2.75 processing fee for paying with a check. How much will Enrique pay for his purchases? A $ Multi-Step Paige finds a printer for $148 at an online store. The cost of shipping the printer is $20. If Paige plans to make four equal monthly payments for the total cost, how much will she pay each month? A $ B $68.48 C $71.42 D $66.75 B $42 C $32 D $40