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The Roaring Twenties Economic Boom

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					The Roaring Twenties:
 The Economic Boom
            Mr. Bach
       Hudson High School
Accelerated United States History
    The Engine of the Boom




                                        The Model T

“Any customer can have a car painted any color that he wants so long
as it is black.” – Henry Ford
  The Detroit Auto Industry
• How did the
  Automobile
  change:
  – Industrial
    Production
    Techniques
  – Labor Relations
  – Other
    industries
  – American
    social life
A Culture of Consumerism




       Buy, Buy, Buy!
    Installment Buying: The
    Ancestor of Credit Cards
• What are
  the
  benefits of
  buying with
  credit?
• What are
  the
  detriments
  of buying
  with
  credit?
      Discover Student Card
Annual Percentage Rate (APR) for      0.0% until June 2009; then the
   Purchases                             standard APR, 14.99% variable
Other APRs                            Cash Advances: 23.99%
                                      Default Rate: up to 30.99%
Grace Period                          At least 25 days when you pay your
                                          balance in full each month
Annual Fee                            None
Minimum Finance Charge                $.50
Other Fees                            Cash Advance Transaction Fee: 3% for
                                         each cash advance, with a minimum
                                         of $5 and no maximum. Late Fee:
                                         $19 on balances up to $250 and
                                         $39 on balances over $250.
                                         Overlimit Fee: $15 on balances up
                                         to $500, and $39 on balances over
                                         $500.
  If you are late making a payment or your account is overlimit twice, we
  may increase your APR to the default rate. Any special or introductory
                       offers may terminate as well.
                May 2009
• Mary, a senior at Hudson High School, applies
  and receives her first credit card, the
  Discover Student Card, at age 18. She is given
  a credit limit of $1,000.
• While shopping for a prom dress, Mary sees
  the perfect dress at Jessica McClintock at
  Beachwood Place. The dress costs $600, but it
  is absolutely perfect, and Mary is sure no other
  girl will have this dress at the prom because it
  is a one-of-a-kind. Mary buys the dress on May
  1, 2009 with her Discover Student Card.
               June 2009
•   Mary receives her billing statement on June
    1, 2009. It lists the balance of $600 for the
    dress and in bold it states the “minimum
    payment due” is $20. Mary mails in a check
    for $20. Assuming she makes no more
    purchases during the month of June, what will
    her next statement on July 1, 2009 read?
•   $600 (balance for dress)
•   - $20 (payment towards balance)
•   = $580 (remaining balance) * 14.99% =
    $86.94 (interest) + balance = $666.94
              July 2009
•   Mary receives her statement on July 1,
    2009 but she decides to send in no
    money (she overspent her cash during
    June). Assuming she makes no more
    purchases on her credit card during the
    month of July, what will her statement
    read on August 1, 2009?
•   $666.94 * 14.99% = $99.97
    (interest) + balance = $766.91 + $39
    (late fee) = $805.91
              August 2009
•   Mary receives her statement on August 1,
    2009, but she decides to send in no money
    (she lost her part-time job at Cali Juice and
    her parents are using “tough love” and refuse
    to bail her out). Assuming she makes no more
    purchases on her credit card during the
    month of August, what will her statement
    read on September 1, 2009?
•   $805.91 * 14.99% = $120.81 (interest) +
    balance = $926.72 + $39 (late fee) =
    $965.72
          September 2009
•   Mary receives her statement on
    September 1, 2009; she is so depressed
    she tears it up and refuses to even open
    it. Assuming she makes no more
    purchases on her credit card during the
    month of July, what will her statement
    read on October 1, 2009?
•   $965.72 * 30.99% = $299.28
    (interest) + balance = $1265.00 +
    $39 (late fee) + $39 (overlimit fee) =
    $1343.00
What would have been the
  wisest thing for Mary to
  have done back in May?


    Don’t Buy the
    Dress – She
  Cannot Afford it!
  A Growing Danger???




Buying on Margin – The Stock Market
         Bubble of the 1920s

				
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