In this interactive activity, students will explore how to read and understand an amortization schedule. They'll examine the amortization table of a $20,000 car loan with a 7% APR and a variable loan duration. Students can adjust the loan duration to either 3 years or 7 years, observing the impact on the amortization table. Additionally, students will respond to review questions that prompt them to consider changes in the interest and principal portions each month.
Students will also complete two tables, calculating the percentage of the monthly payment allocated to the interest and principal parts.
By interacting with review questions and tabular data, students will enhance their comprehension of borrowing, interest payments, and responsible debt management.
For more activities like this, explore our car loan lab - car loan lab.
This activity is designed to help students develop a solid understanding of amortization, particularly in the context of a car loan. The primary objectives are to teach students how to read and interpret an amortization schedule, grasp the concept of loan duration and its impact on repayment, and improve their financial literacy regarding borrowing and debt management.