Ledger of Debt Worksheet The Ledger of Debt
Economics in the Gilded Age: Credit & Installment Plans
Name:
Date:
Part 1: The Modern Hook
The Poll: Imagine a brand new smartphone costs $1,000 today. Most people don't have that much cash in their pocket. If you could have the phone today for just $20 per month , would you do it?
Yes, Buy Now
No, Save Up
Why did you choose that option? Consider the trade-off of "Time vs. Cost."
Part 2: Gilded Age Mechanics
Watch the video segment (3:55–4:59) and define the following terms in your own words:
Principal
Interest
Installment Plan
Part 3: Simulation Results
Role:
Weekly Salary: $
Item Selection Cash Price Final Cost (Credit) Interest Paid $ $ $ $ $ $
The Comparison: How many weeks would you have to save your weekly 20% to buy your first item in CASH?
The Verdict: Was having the item "Now" worth the extra interest paid? Why or why not?
Price of Progress Slides The Price of Progress
Economics of the Gilded Age
Learning Goals
Mechanics
Explain how credit and installment plans functioned to increase mass consumption.
Evaluation
Evaluate the benefits and risks of consumer debt for the Gilded Age middle class.
Buy Now, Pay Later
A new $1,000 smartphone is released today.
You don't have $1,000. But the store offers a deal:
$20 / MONTH
You get the phone today.
YES
NO
Gilded Age Consumption
Viewing Segment: 3:55–4:59
Embedded media
Terms to Track:
1
Principal
2
Interest
3
Installment Plan
"Buy now, pay later... made expensive items more affordable for middle class Americans."
Economic Simulation
THE COST OF CREDIT
Get Your Role
Pick Your Items
Do the Math
Simulation Rules
01
Check Your Ledger
Your Scenario Card tells you your weekly salary and two items you "need."
02
Calculate the Gap
If you buy with CASH , how many weeks of total savings do you need? (Assume you save 20% of your salary).
03
Calculate the Credit
If you use an INSTALLMENT PLAN , what is the final price after all interest is paid?
Reflection
Trap or Tool?
Is consumer credit a way to empower the middle class to live better lives, or a system designed to keep people working forever to pay off the past?
The Past
"Excelling over everyone else in the accumulation of goods." — Veblen
The Present
How does your own phone/technology credit look compared to the Gilded Age?
Gilded Catalog Scenario Cards The Gilded Catalog
Consumer Scenario Cards for "The Cost of Credit" Simulation
Instructions: Cut these cards along the dashed lines. Each student or small group receives one Occupation Card and must choose two items from the Catalog Items to "purchase."
Occupation Card 1
Railroad Clerk
Weekly Salary: $15.00
You live in the city and need to keep up appearances for your office job.
Weekly Savings (20%):
$3.00
Occupation Card 2
Factory Foreman
Weekly Salary: $22.50
With a steady job managing the floor, you're looking to upgrade your home life.
Weekly Savings (20%):
$4.50
The Season's Must-Haves
"The Domestic Queen" Sewing Machine
Cash Price: $40.00
Installment Plan:
$5.00 Down Payment
$4.00 / month for 12 months
Ornate Oak Bedroom Set
Cash Price: $100.00
Installment Plan:
$10.00 Down Payment
$10.00 / month for 12 months
Columbia Graphophone
Cash Price: $25.00
Installment Plan:
$3.00 Down Payment
$3.00 / month for 10 months
Bicycle (Safety Model)
Cash Price: $75.00
Installment Plan:
$15.00 Down Payment
$7.00 / month for 12 months
Reference: Prices and wages based on 1895 historical averages.
Credit Math Reference Sheet The Installment Calculator
Gilded Age Financial Reference Sheet
Basic Formulas
Total Cost of Credit
\[ \text{Down Payment} + (\text{Monthly Payment} \times \text{Number of Months}) \]
Interest Paid (The "Fee" for borrowing)
\[ \text{Total Cost} - \text{Cash Price} = \text{Interest} \]
Worked Example
Item: The "Standard" Stove
Cash Price: $20.00
Plan: $2.00 Down + $2.00/month for 12 months
1. Calculate Installments: $2.00 \times 12 \text{ months} = \mathbf{\$24.00}\)
2. Add Down Payment: $24.00 + \$2.00 = \mathbf{\$26.00}\)
Final Cost on Credit: $26.00
3. How much was Interest? $26.00 - \$20.00 = \mathbf{\$6.00}\)
The "Patience" Option (Cash)
If you decide to save your money instead of using credit, use this formula to see how long you must wait:
\[ \frac{\text{Cash Price}}{\text{Weekly Savings}} = \text{Weeks of Saving} \]
Gilded Age Economics Instructional Reference No. 102
Price of Progress Teacher Guide Teacher Facilitation Guide
Lesson: The Price of Progress
Lesson Overview
This lesson explores the economic shift from "save then buy" to "buy now, pay later" during the Gilded Age. Students will use historical math to evaluate the true cost of credit and debate the psychological and economic trade-offs of debt.
Grade Level
10th Grade Economics
Time
50 Minutes
Instructional Steps
1
The Phone Hook (5 min)
Use Slide 3 to run the poll. Focus the discussion not on the phone , but on the monthly payment . Ask: "Does $20/month feel like a different amount than $1,000 upfront?"
2
Video & Definitions (10 min)
Play the video (3:55-4:59). Students should use the Ledger Worksheet to define Principal (the original price), Interest (the extra fee), and Installment (the recurring payment).
3
The Simulation (25 min)
Setup:
Hand out Scenario Cards (railroad clerk or foreman).
Distribute the Credit Math Reference Sheet .
Students pick 2 items from the catalog.
Teacher Tip: Most items in the catalog carry an interest rate of roughly 20-30%. Point out that while the monthly payment is low, the final price is often significantly higher than the cash price.
4
Reflection (10 min)
Discuss Thorstein Veblen’s "Conspicuous Consumption." Ask: "Is credit helping people survive, or is it helping them 'excel over others' in a way they can't afford?"
Differentiation Support
Scaffolding
For students struggling with multi-step math, have them focus on calculating only one item. Provide pre-calculated 'Weekly Savings' values on their cards.
Extension
Challenge students to calculate the "Annual Percentage Rate" (APR) for the sewing machine. How does it compare to modern credit card rates (15-25%)?
Price of Progress Answer Key Answer Key
The Ledger of Debt / Price of Progress
Teacher Reference
Part 2: Definitions
Principal
The original sum of money lent or invested on which interest is paid; the actual cost of the item without the financing fees.
Interest
Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. It is the "fee" for borrowing.
Installment Plan
An arrangement for payment by installments (recurring smaller payments) over a fixed period of time until the full price plus interest is paid.
Part 3: Catalog Calculations
Item Cash Price Calculation Total (Credit) Interest Sewing Machine $40.00 $5 + ($4 * 12) $53.00 $13.00 Bedroom Set $100.00 $10 + ($10 * 12) $130.00 $30.00 Graphophone $25.00 $3 + ($3 * 10) $33.00 $8.00 Bicycle $75.00 $15 + ($7 * 12) $99.00 $24.00
Part 3: Savings Wait Times (Cash)
Railroad Clerk ($3/wk savings)
Sewing Machine: 13.3 weeks
Bedroom Set: 33.3 weeks
Graphophone: 8.3 weeks
Bicycle: 25 weeks
Factory Foreman ($4.50/wk savings)
Sewing Machine: 8.8 weeks
Bedroom Set: 22.2 weeks
Graphophone: 5.5 weeks
Bicycle: 16.6 weeks
