Helping John Choose a Car Loan: Loan Calculator

Activity Description

In this worksheet, students will assist John in choosing the appropriate car loan based on his financial background. Students will consider John's total savings, monthly loan payment capacity, and the loan conditions offered by the lender.

Using a loan calculator with a slider to adjust the loan duration, students will determine the suitable loan duration for John and the necessary waiting period to save for the down payment for four different cars: Toyota Camry, Honda Civic, BMW 3 Series, and Porsche 911.

Activities:

• John's Financial Background: Students will be provided with John's financial details- Total savings: $3,000, Monthly payment capacity: $750, Loan interest rate: 6%.
• Loan Calculator Activity: Students will use a loan calculator with a slider to adjust the loan duration. The calculator will display the monthly EMI and the total interest amount based on the selected duration.
• Down Payment Calculation: Students will calculate the 20% down payment for each car model and determine how many months John needs to wait to save this amount based on his current savings and savings rate.
• Loan Duration Calculation: Students will use the loan calculator to find the minimum loan duration that keeps John's monthly payment within $750 for each car model.
• Comparison and Decision Making: Students will compare the results for the four car models and help John decide which car he can afford based on his financial constraints.
• Reflection: Guided questions will help students reflect on the importance of financial planning and making informed decisions when choosing a car loan.

Key Learning Outcomes:

• Loan Calculation Skills: Students will develop skills in calculating loan durations, monthly payments, and total interest.
• Financial Planning: Students will understand the importance of saving for a down payment and managing loan payments within a budget.
• Decision-Making: This worksheet will help students make informed decisions about car financing options based on financial constraints.

This worksheet is designed to enhance students' understanding of car loan calculations and financial planning, providing them with valuable insights into making informed decisions about car purchases.

Learning Objective

The learning objective of the activity is to introduce students to the world of car loans, how the loan duration affects the monthly payment etc. In this worksheet activity, students will John choose the right car loan for each of the cars, such that the loan duration is minimal but fits within John's budget. Students will use the provided loan calculator and adjust the loan duration slider to find the minimal loan duration for all four cars.

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