Maria will be a college sophomore next year and she is determined to have her own credit card. She will not be employed during the school year but is convinced that she can pay for credit card expenses based on her summer earnings. Maria's parents have read a number of articles about the problems of credit cards and college students, including examples of students leaving school after a downward spiral of credit cards, overspending, working to pay bills, worrying about bills, working more hours to pay bills, and eventually withdrawing from school. When Maria showed up with a handful of applications including Visa, a Gold MasterCard, Discover, a Visa sponsored by her university, an American Express, a secured MasterCard, and a gas company card her parents were overwhelmed. Maria admitted she didn't want them

all.

"I'm not stupid," she declared. Since Maria obviously needed to learn about credit cards, her parents agreed to co-sign her application on one condition. She had to approach her choice just as she would a class project and research the following questions.

If she uses her card only for her books this fall and next fall, how will these purchases affect her monthly payments if she still wants to eliminate her balance and be debt free in 24 months? Assume that her book purchases are $600 and are 3 months and 15 months away. (Assume an APR of 1414%.)