Module 4 Project

Module 4 Project 🚧: Finance 💰 For this project, you will use your finance skills to make a purchase. Step 1 Choose one of the three following scenarios: • • • Purchase a car Purchase a house Finance college Step 2 Find a reasonable price for your purchase or future cost of college (attach an example from the newspaper, Internet, or other reputable source – this can be an image from the newspaper, print out from the Internet, etc.). Step 3 Find the current interest rate (attach an example from a loan officer at a bank, Internet, or other reputable source – this can be an image from the newspaper, print out from the Internet, etc.). Sources on the Internet: www.latimes.com www.ocreg.com www.bankrates.com www.collegeboard.com (Do not round the interest rate – use the exact interest rate given from the financial institution.) Step 4 Assume there is no down payment: Calculate your monthly payments over the life of the loan/purchase. 1 Step 5 Still assuming there is no down payment, calculate your total payments over the life of the loan/purchase. Step 6 How much interest are you paying over the life of the loan/purchase? Step 7 Assume you are making a 10% down payment or if you are looking at college loans, assume you are receiving 10% of the loan from your parents, i.e., you are borrowing less: Calculate your monthly payments over the life of the loan/purchase. Step 8 Still assuming you are making a 10% down payment, calculate your total payments over the life of the loan/purchase. Step 9 How much interest are you paying over the life of the loan/purchase? Step 10 What is the absolute difference in interest from making no down payment to making a 10% down payment? Step 11 Would you suggest making a down payment or not? Why or why not? Use your results above to justify your answer. Step 12 Write a paragraph summarizing why you picked the scenario and what you learned from this project in the context of your scenario. 2