The True Cost of Borrowing
The same fictional €90 item is offered as “3 easy payments of €34.” Add them up — €102 — and the “easy” wording costs €12 more.
Ready-to-print worksheets
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In the year workbook
My Money YearThis lesson has a companion in the printable year workbook: pupil pp. 139–140, teacher companion p. 113.
Learning objectives
- Add the three €34 payments (3 × €34 = €102) and find how much is above the €90 price
- Compare the total of each offer and, under the stated assumptions, pick the lowest
- Explain why “only €34 each time” is an incomplete way to compare offers
Vocabulary
- Credit
- Money you borrow now and pay back later.
- Interest
- Extra money added for saving, or charged for borrowing.
- APR
- A yearly figure showing how much borrowing really costs.
- Instalment
- One of several equal payments that add up to the full price.
- Total Repayment
- Everything you pay back in the end, including any extra.
Materials
Minute-by-minute flow
7′
Hook
Teacher does
Read the story: a fictional item costs €90 now; one offer is “3 easy payments of €34,” another is “Pay €90 later, no stated fee” under this exercise’s assumptions. Ask which card facts are known and what to find out.
Students do
Name the three ways to pay and the €90 price.
13′
Model
Teacher does
Think aloud through task 1: add the three €34 payments — 3 × €34 = €102 — how much above the €90 price is that? (€12).
Students do
Work out €102 and the €12 extra.
22′
Practise
Teacher does
Set tasks 2 and 3: under the stated assumptions which offer has the lowest total, and why is “only €34 each time” incomplete?
Students do
Show pay-now €90 and fee-free pay-later €90 tie while the three-payment offer totals €102, and explain the monthly wording hides the total and possible fees.
12′
Discuss
Teacher does
Surface the misconception: a pay-later option is not automatically free or safer in real life — the €90-later card is a narrow teaching assumption.
Students do
Explain real terms, fees and timing could change the answer.
6′
Exit
Teacher does
Pose the reflection: what figure should you compare first across borrowing offers?
Students do
Say the full total to repay, alongside terms, fees and timing.
Check for understanding
Can the learner show 3 × €34 = €102 (€12 over €90) and choose by total repayment rather than the monthly amount?
Exit ticket
Three €34 payments total €__ — €12 above the €90 price — so I compare offers first by their…
Support
Provide 34 + 34 + 34 already arranged in a column.
Stretch
Add a hypothetical €5 missed-payment fee to the three-payment offer: €107 total.
Home connection
Find one “pay in 3” or “pay later” offer and work out its full total, marking one assumption or fee you would need to check first.