ACTIVITY: Financial Literacy: What You Need to Know

Florida State Standards

CTE-GEN.68.GENRL.09.26 : Identify and apply effective communication skills   

SS.912.FL.4.8:  Examine the fact that failure to repay a loan has significant consequences for borrowers such as negative entries on their credit report, repossession of property (collateral), garnishment of wages, and the inability to obtain loans in the future.

SS.912.FL.4.4:  Describe why people often make a cash payment to the seller of a good—called a down payment—in order to reduce the amount they need to borrow. Describe why lenders may consider loans made with a down payment to have less risk because the down payment gives the borrower some equity or ownership right away and why these loans may carry a lower interest rate.

LAFS.1112.RH.2.4:  Determine the meaning of words and phrases as they are used in a text, including analyzing how an author uses and refines the meaning of a key term over the course of a text (e.g., how Madison defines faction in Federalist No. 10). 

Teacher Needs

            NEXT article, “Financial Literacy

            Laptop/desktop

Internet access

            MS Excel or MS Word

Student Needs

NEXT article, “Financial Literacy

Laptop/desktop

Internet access

            MS Word/MS Excel

Introduction

As important as it is to know the meaning of words commonly associated with financial literacy, it is just as important to recognize where to gather information and how to make a sound financial decision when it comes to loans and credit.

After reading the NEXT article, “Financial Literacy:  Terms You Need to Know Now”, complete the following exercise.

Task 1

You have been discussing the idea of buying a car with your parents. They are almost onboard with the idea; however, they would like more information from your perspective about obtaining a car loan.

Your task will be to research the details of buying (1) a new car opposed to (2) buying a used car.  The details you should include will include the following:

  1. Cost of new car vs used car
  2. Income requirement
  3. Type of banking institution (commercial bank, credit union, dealer finance)
  4. Interest rate
  5. Down payment (if any is required)
  6. Monthly payment (including interest)
  7. Credit score required
  8. Co-signer necessary
  9. Late payment fees and consequences for defaulting on the loan for both you and co-signer

Create a spreadsheet or table which includes all of this information.

Task 2

When you have completed this task, evaluate the information and write a short paper expressing your decision and why to your parents.

Suggested websites: (You do not have to use these suggested sites.  If you use a different site, please note that on the bottom of your assignment.)

https://www.bankrate.com/loans/auto-loans/current-auto-loan-interest-rates/

https://www.suncoastcreditunion.com/personal/borrow/vehicle-loans

https://www.wellsfargo.com/auto-loans/

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