Driving Home: Car Loan Simulation
Activity Description
The "Car Loan Simulation" is an engaging and educational activity designed to help students explore the world of auto financing. This simulation allows students to make financial decisions when purchasing a car, providing them with practical experience in understanding the financial aspects of car ownership.
Activity Components:
- Car Selection: Students choose a car model that suits their preferences and budget.
- Down Payment: Students decide on the initial down payment amount using a slider
- Loan Duration: Students select the duration of the auto loan using a slider
- Fill the table: Fill monthly payment and total interest for different scenarios given.
- Review Questions: Students answer review questions to reinforce their understanding of auto financing concepts.
- Real-Life Application: Students determine the optimal loan parameters for a fictional car buyer, Mr. John, applying what they've learned to a practical scenario.
Key Learning Outcomes:
- Car Loan Comprehension: Students will understand the factors that influence car loan payments and total interest.
- Financial Data Analysis: Students will develop skills in analyzing loan scenarios and recording data.
- Informed Decision-Making: This worksheet will help students make informed decisions about car financing options based on financial constraints.
This activity is suitable for high school students and can be adapted for different grade levels based on the complexity of the questions and discussions.
The "Car Loan Simulation" is a valuable tool for teaching students about responsible financial decision-making in the context of car purchases. It equips students with practical skills and knowledge that will be beneficial as they prepare for their financial futures.
Learning Objective
Car Selection: How to choose a car that fits their needs and budget.
Interest Rates: How different interest rates impact the cost of financing a car.
Loan Duration: How the duration of a loan affects monthly payments and the total interest paid.
Amortization: What an amortization schedule is and how to interpret it, including how each payment contributes to both interest and principal repayment.
Overall, the learning objective is to improve students' financial literacy and decision-making skills when it comes to buying a car and managing car loans.
