The Real Cost of Buying Now and Paying Later · seed 1 · A4, ink-friendly. The answer key prints on its own page for grown-ups.
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Count the full price of credit

Life Skills · Money & Finance · ages 15-16
Name ______________________   Date ____________

  1. What does an annual interest rate express?

    • A discount applied once to the purchase price
    • A yearly percentage rate for borrowing
    • A monthly percentage rate for borrowing

  2. For a fixed-payment credit offer, what should you compare with the cash price?

    • All scheduled payments, plus any deposit and separate fees
    • Only one monthly payment
    • The borrowed amount before interest and fees are added

  3. A card's minimum payment means the amount needed to clear its full balance that month.

    Circle one:   True   False

  4. A practice loan charges one year of simple interest at 20% on an unchanged £500. There are no fees. How much interest is charged?

    • £500 interest
    • £0 interest
    • £100 interest

  5. A speaker offer requires 18 payments of £25, with no deposit or separate fees. All interest is included. What is the full cost, in pounds?

    Answer: ______________

  6. The same phone costs £300 cash or 18 payments of £20. Credit has no deposit or separate fees, and interest is included. Which costs more overall?

    • Cash: £300 in total
    • Credit: £360 in total
    • Both: £300 in total, including all repayments

  7. Two repayment plans start with £400 owed. Over one year, minimum payments total £120 and interest £72. Higher payments total £240 and interest £48. Neither has fees or new spending. Which leaves less owed?

    • Higher payments: £208 left
    • Minimum plan: £280 left
    • Both plans: £352 left

  8. A £200 jacket is offered as four £55 payments, including all charges. Alternatively, a card repayment plan adds £40 total interest to £200 borrowed. Neither has separate fees. Which costs more?

    • Instalments: £240 in total
    • Card plan: £240 in total
    • Both: £220 in total
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Answer key

For grown-ups. Fold this page away before handing over the rest.

Count the full price of credit W1-mt_VidrDsqJqA-s1

  1. A yearly percentage rate for borrowing · The rate is expressed as a yearly percentage. The cash interest charged also depends on balances, timing and terms.
  2. All scheduled payments, plus any deposit and separate fees · Compare the full cost. Deposits and separate fees count even when they sit outside the monthly payments.
  3. False · The minimum is the smallest required payment by the due date. Paying it does not necessarily clear the balance.
  4. £100 interest · Simple interest is £500 x 20 / 100 = £100 for this stated one-year model.
  5. 450 · The full cost is £25 x 18 = £450. There is no deposit or separate fee to add.
  6. Credit: £360 in total · Credit totals £20 x 18 = £360, which is £60 more than the £300 cash price.
  7. Higher payments: £208 left · Minimum payments leave £400 + £72 - £120 = £352. Higher payments leave £400 + £48 - £240 = £208, which is £144 less.
  8. Card plan: £240 in total · Instalments total £55 x 4 = £220. The card plan totals £200 + £40 = £240, so it costs £20 more.
Worksheet · LightMySky