Part One
As you are approaching your high school graduation, you feel that it is necessary to have a vehicle when you go to university. You have been working part-time, and you are hoping to continue to do so. The vehicle will help you commute to work and school. You have your eye on a used car that fits your needs perfectly. The cost of the car with all the fees will be about $5,000. You decide to pay the down payment and borrow the rest of the money. Complete the questions in the worksheet for part one.
Part Two
While you save up for the down payment, you start looking into the credit options for the rest of the amount, which is $4,600. Below are the results of your research. Complete the table in the worksheet, and answer the questions for part two.
Line of Credit Annual Interest Rate: 6%, Compound Term: 7 years Total Payment: ? Maximum: $5,000 Auto Loan Term Loan Annual Interest Rate: 8\%, Simple Term: 4 years Yearly Payment: ? Maximum: None Credit Card Annual Interest Rate: 21%, Compound Payment after 1 Month: $4,683 Payment after 1 Year: $5,675 Maximum: $5,000 All's Well That Ends Financially Well Part A The table below represents your personal monthly budget. Study the table and answer the questions that follow. Questions: 1. You need to save $400 for a down payment on a used car. How much do you think you need to save for the down payment each month? 2. Find ways to save for the down payment by making cuts to your expenses. Give reasons why you think you will be able to cut down on those particular expenses. 3. Recreate another personal monthly budget to include your savings for the down payment (labelled down payment savings) and your revised amounts for the expenses. 4. How many months of saving for the down payment will it take you to reach the $400 amount if no emergencies occur? 1. Complete the table below with the required amounts using the simple interest or compound interest formulas as necessary. irtual Date: 2. List three advantages and three disadvantages of charging the $4,600 to your credit card. 3. Compare the loan options and their features. Which loan option would you go with? 4. Write one paragraph explaining your choice of loan option and provide at least two reasons why you didn't pick the other options. Line of Credit Annual Interest Rate: 6%, Compound Term: 7 years Total Payment: ? Maximum: $5,000 Auto Loan Term Loan Annual Interest Rate: 8\%, Simple Term: 4 years Yearly Payment: ? Maximum: None Credit Card Annual Interest Rate: 21%, Compound Payment after 1 Month: $4,683 Payment after 1 Year: $5,675 Maximum: $5,000 All's Well That Ends Financially Well Part A The table below represents your personal monthly budget. Study the table and answer the questions that follow. Questions: 1. You need to save $400 for a down payment on a used car. How much do you think you need to save for the down payment each month? 2. Find ways to save for the down payment by making cuts to your expenses. Give reasons why you think you will be able to cut down on those particular expenses. 3. Recreate another personal monthly budget to include your savings for the down payment (labelled down payment savings) and your revised amounts for the expenses. 4. How many months of saving for the down payment will it take you to reach the $400 amount if no emergencies occur? 1. Complete the table below with the required amounts using the simple interest or compound interest formulas as necessary. irtual Date: 2. List three advantages and three disadvantages of charging the $4,600 to your credit card. 3. Compare the loan options and their features. Which loan option would you go with? 4. Write one paragraph explaining your choice of loan option and provide at least two reasons why you didn't pick the other options
