Assume that you will be given $10,000 next month to be spent towards purchasing a car or truck. Will you buy an old used car outright, or use the 10k (and perhaps a trade-in) towards the purchase of a new or lightly used vehicle? Set up an Excel spreadsheet to help you with your decision.

Prep work: Consider at least two scenarios, e.g., new car vs. used car, car vs. truck, etc. o Your spreadsheet will be more interesting if the cars have different costs, MPG, etc. Decide on the holding period for your car o Do you expect to own the car for a few years, then upgrade after you are established after graduation, or do you expect to hold on to the car for a longer period of time so you can focus on other financial goals? o You must specify holding period in years Research ownership costs for both cars: o Cost o Miles per gallon (MPG) o Interest rate and term if you finance the rest of the cost with a car loan Check rates at your bank, the car dealer, and/or Bankrate.com o Average maintenance costs Suggestions: Edmunds.com. nerdwallet.com, yourmechanic.com o Insurance (ALWAYS check this, your insurance may increase a lot even with a used car) Car Decision Spreadsheet: Set up a spreadsheet to compare the total costs of the two cars o Calculate your loan payment and total interest for the loan over the term o Estimate your cost of gas per year (will need estimated gas price and miles driven per year) or charging costs o Estimate other costs based on your research above Create a separate section or worksheet to analyze your loan o If you pay $100 more each month, how much faster will the loan be paid? o If you pay $100 more each month, how much less total interest will you pay? o If you want to pay off the loan in 3 years, what would your monthly payment need to be? Now consider the best way to present your analysis o Can you make your spreadsheet more efficient? Create tables for your cost analysis and loan analysis o Will others understand inputs and outputs, and what you are trying to accomplish? Make your spreadsheet general so anyone could put in their own assumptions Make sure the input cells are obvious Test on friends or family members