Unit 5: Instructor Graded Assignment Consumer Credit

Unit 5: Instructor Graded Assignment Consumer Credit In this And Future

Based on the provided assignment prompts, the core task involves calculating interest rates, analyzing credit card transactions over a specific month, and evaluating credit cards based on research. The key components include identifying the current prime interest rate, calculating interest rates with that prime rate, analyzing a series of credit card balances and transactions, and composing an evaluative essay on credit card options, supported by credible sources.

Paper For Above instruction

The assignment requires a comprehensive understanding of consumer credit, focusing on the calculation of interest rates, understanding the impact of historical prime rates, and assessing personal credit card usage. Additionally, students are tasked with researching and analyzing different credit card offers to identify the best option based on specific criteria.

First, students must determine the current prime interest rate by consulting the Wall Street Journal or a similarly reliable financial publication. Once obtained, they will add 9.9% to this prime rate to determine the current interest rate applicable to their credit card. For example, if the prime rate is 4.75%, then the total interest rate on the credit card would be 9.9% + 4.75% = 14.65%. If the card had been issued 30 years ago, students are expected to find the prime rate from that period and calculate the corresponding interest rate, which demonstrates understanding of how interest rates and economic conditions have changed over time.

Next, students analyze a hypothetical credit card account with a balance of $1,000 during April. They will need to incorporate specific transaction dates and amounts—such as charges for a $100 purchase on April 3rd, gas on April 20th, a payment of $400 on April 23rd, and a food charge on April 27th. Using the national average costs for gas and food (retrieved from credible sources and based on the month four months prior to the assignment deadline), the students must calculate the average daily balance of the credit card for April. This entails calculating the balance on each relevant day, accounting for the transactions and the days on which they occurred, to find the weighted average over the billing period.

Following this, students will determine the interest charged for that month, based on the average daily balance and the applicable annual interest rate. They will perform two separate calculations: one using the current year's prime rate and interest rate, and another assuming the interest rate from 30 years ago, to illustrate how historical interest rates impact borrowing costs.

The final component involves analyzing three different credit cards sourced from credible consumer research websites like Bankrate.com. Students are asked to compare features such as interest rates, grace periods, annual fees, and other relevant terms. They will then compose a well-structured essay evaluating which credit card is the best choice, supporting their decision with evidence from reliable sources. The essay must be between ¾ and one page, written in proper academic style, including APA citations and references.

Throughout the assignment, students are instructed to show detailed work and explanations for each calculation, use reliable sources (excluding Wikipedia, Yahoo Answers, and Ask.com), and submit their responses as a Microsoft Word document by the due date. Proper citations and proper formatting are emphasized for credibility and academic integrity.

References

  • Bankrate.com. (n.d.). Retrieved from https://www.bankrate.com/
  • Federal Reserve Board. (2023). Historical Prime Rate Data. Retrieved from https://www.federalreserve.gov/
  • Wall Street Journal. (2023). Prime Rate Data. Retrieved from https://www.wsj.com/
  • Investopedia. (2021). Average Credit Card Interest Rates. Retrieved from https://www.investopedia.com/
  • Federal Trade Commission. (2019). Consumer Credit Harmful Practices. Retrieved from https://www.consumer.ftc.gov/
  • U.S. Bureau of Labor Statistics. (2023). Consumer Price Index Data. Retrieved from https://www.bls.gov/
  • MoneyGeek. (2022). Best Credit Cards of 2022. Retrieved from https://www.moneygeek.com/
  • MyFICO. (2023). Credit Card FAQs. Retrieved from https://www.myfico.com/
  • AnnualCreditReport.com. (2023). Free Annual Credit Report. Retrieved from https://www.annualcreditreport.com/
  • Consumer Financial Protection Bureau. (2022). Credit Card Market Data. Retrieved from https://www.consumerfinance.gov/

Related Assignments