Idea 23of 23Builds onInterest is the cost of borrowing
Pay now or pay later
Is a payment plan cheaper because each payment is small?
Today you'll discover
- how to total a payment plan
- how much more paying later costs
- when paying later can make sense
Think firstA $120 bike
Pay $120 now, or make 6 payments of $22. Which costs more in all?
Decide first, then press Next. Compare the top bar with the row of pieces.
A bike for $120. A blue bar: save first, pay once, $120. Under it, a payment plan of six orange pieces of $22 each, with a bracket: 6 × $22 = $132. Then a dashed piece added to the top bar marks the difference, +$12, and the sentence $132 − $120 = $12 more for paying later. The last step shows a $240 tablet or 12 payments of $22.
See the whole ideathe big idea and the key word, in one place
The big idea
Add up every payment before choosing: paying later usually costs more than paying now.
When later makes senseIf the fridge breaks, a family may need a new one today. Then a payment plan can be worth its extra cost.
Wait and saveSaving $20 a week for 6 weeks buys the $120 bike with no extra cost, just later.
Key word
- payment plan
- paying for something in several smaller payments over time, often adding up to more than the price
Ready to use it?
- Total a payment plan.
- Find how much more paying later costs.