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Zach, a college freshman, uses his new credit card with a 19% APR for emergencies during a work break, facing minimum payments that may lead to costly interest and debt.

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    Minimum Payments Mean Costly Consequences CHAPTER 4, LESSON 1 DIBECnONS Rc-jd the soemrio below. analyze- the data, and use the Minimum Fbymcni Schedule chan to answer the following questions. The Scenario Zach, 3 collegefreshma n, recently signed upfor and received hisfi rstcredit ca rd. Thecredrt card has a 19% annual percentage rate (APR}—that's the interest rate he'll have to pay to use the money he bonows—a nd it has a minimum payment of only $10 or 2.5%ofthe balance (whichever is larger}. Zach promised himself that he would use the credit card only for emergencies. I n t h e m i d d l e o f Decern ber, Zach had to take off work for a couple weeks to finish some end-of-semester projects, study for h is finals, and spend time at home over the holiday break. Si nee he won t get a paycheck again until January, he used his credit card for several item s he considered emergencies. U C M I CREDIT CARD EMERGENCIES Gas farthe drive back, home 5 5 5 Food (srucks far stu dying) 5 4 5 Christmas, gifts for family 5 2 2 5 Books for next semester sclasses 5 5 9 5 Total Dobt 5910 Many people in debt only make the minimum monthly payments on their credit cards. So, what will happen if Zach just makes the minimum payments on this one credit card? Assuming he charges nothing else and makes every minimum payment on time (two tig assumptions), it will take him 154 months to pay for these 'emergencies."

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