This activity from the Nuffield Foundation shows students how to use a recurrence relation to work out how long it takes to pay off a credit card loan and how much it costs. They can use a graphic calculator or spreadsheet to do the working.
After working through the given example, where a customer spends £1250 and repays £80 per month at a monthly interest rate of 1.2%, students are asked to investigate how long it would take to pay off another debt with different rates of interest or different regular payments.
The Excel spreadsheet can be used to demonstrate the spreadsheet methods or formulae.
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