PowerPay Debt Reduction Analysis Assignment

1. Use the worksheet below to make up a "case study household" with between seven (7) and ten (10) creditors. List the creditor name, balance owed, monthly payment (note: it must be at least 2% of the balance owed) and the APR (interest rate) for each debt. Make up realistic numbers.
   
   Example: J.C. Penney, $1,020, $30, 22%
   
   

   Creditor	Balance Owing	Monthly Payment	Annual % Rate

2. Go to the PowerPay Web site at www.powerpay.org . Click on "Flash Version" (if you have Flash installed on your computer) or "HTML Version."
3. Click on "Add a Creditor" and add the information from your worksheet above.
4. Print out your list of creditors.
5. When finished adding all the creditors, click on "enter additional payments" and create a scenario (e.g., use of a tax refund to repay debt).
6. Click "Submit."
7. Review the cost savings from using PowerPay's three different options (highest interest, lowest balance, shortest payoff term) and print out the time and interest savings page.
8. Click on "Click for Details" on the method with the greatest cost savings.
9. Print out the debt repayment calendar for that repayment method.
10. Review your printouts and write a one-page summary about your scenario and what you learned about debt and credit card interest from completing the assignment.

Instructor: Dr. Barbara O'Neill, CFP®, Extension Specialist in Financial Resource Management and Professor II
Office: Room 107, Cook Office Building, 55 Dudley Road, New Brunswick, NJ 08901
Phone: 732-932-9155 x250
E-Mail: oneill@aesop.rutgers.edu
Web Page: njaes.rutgers.edu/money | investing.rutgers.edu