Homework Assignment

The American Institute of Certified Public Accountants (AICPA) has developed a website which calculates the total interest paid and the time it would take to pay off credit card debt under differing scenarios.

To start go to https://www.360financialliteracy.org/Calculators/Roll-Down-Your-Credit-Card-Debt

Enter the following amounts and view the report for the results.

Scenario 1:

Current balance on card 1: $8,000

Current balance on card 2: $0

Current monthly payment: Minimum

Roll down amount: $25

Interest rate on card 1: 18.9%

Interest rate on card 2: 0%

Total interest paid will be: _____________

Time to pay off this debt: _____________

With rolldown, interest paid will be: _____________

With rolldown, time to pay off this debt will be: _____________

Scenario 2:

Current balance on card 1: $5,000

Current balance on card 2: $0

Current monthly payment: Minimum

Roll down amount: $25

Interest rate on card 1: 18.9%

Interest rate on card 2: 0%

Total interest paid will be: _____________

Time to pay off this debt: _____________

With rolldown, interest paid will be: _____________

With rolldown, time to pay off this debt will be: _____________

Scenario 3:

Current balance on card 1: $5,000

Current balance on card 2: $5,000

Current monthly payment: Minimum

Roll down amount: $50

Interest rate on card 1: 18.9%

Interest rate on card 2: 17.5%

Total interest paid will be: _____________

Time to pay off this debt: _____________

With rolldown, interest paid will be: _____________

With rolldown, time to pay off this debt will be: _____________

Scenario 4:

Current balance on card 1: $2,000

Current balance on card 2: $1,000

Current monthly payment: Minimum

Roll down amount: $50

Interest rate on card 1: 18.9%

Interest rate on card 2: 17.5%

Total interest paid will be: _____________

Time to pay off this debt: _____________

With rolldown, interest paid will be: _____________

With rolldown, time to pay off this debt will be: _____________