Students will be given the details of a home loan ($300,000 principal, 8% interest rate, and 30 years of loan duration) and then they will be asked to make a small extra principal-only payment every month using an interactive slider. They will learn how big of a change a small extra payment can make to the total interest paid and to the total loan duration.
Students will use the slider to record the values in a table like below:
Understand Principal-Only Payments: Students will learn what principal-only payments are, how they function, and why they are crucial in managing loans.
Evaluate Financial Strategies: Students will explore the impact of principal-only payments on reducing the total interest paid over the life of a loan, allowing them to make informed financial decisions.