Adult Roles and Responsibilities: Understanding and Calculating Vehicle Loans

Adult Roles and Responsibilities:  Understanding and Calculating Vehicle Loans

Grade Level: 10th-12th

Subject: Adult Roles and Responsibilities

Duration: 1 (50 minute period)

DOK Level: 2

SAMR Level: 2

Indiana Standards:

ARR-7.3 Analyze services of financial institutions

ARR-7.4 Apply consumer skills to purchase decisions

Objective:

Students will be able to calculate the monthly and total costs of a 48 and 60 month vehicle loan and provide a rationale as to which loan they would select based on particular circumstances.

Essential Questions:

What is the cost comparison of a vehicle loan when using a 48 month vs. a 60 month loan?

What impacts one’s decision to pursue a 48 month vs. a 60 month load for a vehicle purchase?

Procedure:

1. Students will read the article entitled "Car Loans".

https://docs.google.com/document/d/16doEtgOrF7xxCQXgPIBf25m43RRObLK8zpPzGhOJCkk/edit

2. Using a Google Doc, students will summarize this article in their own words using at least 6 sentences.

3. Students will use the attached link to calculate a loan of the vehicle selected from the lesson entitled, Adult Roles and Responsibilities:  Using the Kelley Blue Book or Edmunds for Vehicle Purchasing Decisions.  Students will use an interest rate of 3.0 % (recent average used car loan rate). Students will calculate their payment with a 48 month loan and with a 60 month loan so that an understanding develops regarding payments costs.   Those monthly loan payment amounts for 48 months and 60 months will be recorded on the  Google Doc from #2.

4. On the same document calculate students will calculate the total amount paid for the car by multiplying the  loan payment x 48 months and then calculating the total amount paid for a 60 month car loan. Here's an example. The car I want is 8,000 dollars. From the loan calculator I found out I would pay $177.07 over 48 months and 143.75 over 60 months. So $177.07 x 48 months is $8,499.36 and $143.75 x 60 months is $8768.75.

5.Students will then indicate preference for a car payment (48 or 60 months) and their rationale for this decision on the same Google Doc.

Product or Assessment:

Students will provide a Google Doc with a summary of the article on car loans as well as their calculations for a 48 and 60 month loan.  Finally on the same document the students will provide their rationale for selecting the 48 or the 60 month loan based on their circumstances.

Accommodations:

Students could listen to an audio presentation of the article on car loans. Students could calculate using different online calculators.  Students could verbally provide the information requested.  

Enrichment:

Students could visit a local dealership and work through the calculations with the financial officer.  Students could research the best institutions for obtaining a vehicle loan.