Professional Documents
Culture Documents
Car Loan
Car Loan
com/calculators/debtrepayment or
https://www.schwabmoneywise.com/public/moneywise/tools_resources/cost_of_debt_calculator works for all kinds
of loans – including car and student loans so let’s try some different figures:
Car Loan – Clunker – Borrow $2000 at 5% interest rate
14. Pick a minimum monthly payment: _______
200 (must be more than $50)
How long does it take you to pay off the car?
11 months
How much do you end up paying for the car if you just pay the minimum each
month?
42 months
How much do you end up paying for the car if you just pay the minimum each month?
105 months
26,000
17. What car would you choose? Why?
I would get the gently used car. Because I dont need a super nice car
this early in my life, especially if I cant pay for it.
* The debt calculator does not let you choose a monthly payment for less than $50. Why do you think it does
this?
Because that would be unrealistic or that is the bare minimum to
pay back dept.
Student Loan -
State School – Borrow $40,000 at 4% interest rate
18. Pick a minimum monthly payment: _______
How much do you end up paying for the loan if you just pay the minimum each month?
How much do you end up paying for the loan if you just pay the minimum each month?
20. This doesn’t necessarily mean that loans are bad, but it means you need to exercise caution when signing up
for a loan. What three tips would you give a friend looking for a loan to buy a car or for college?
1.
2.
3.
21. Find your state. What percentage of students graduated with debt? How much was this debt?
22. Interest rates on student loans vary depending on the type of loan. They can be as low as 3.8% or as high as
9%. Using the debt calculator you used earlier, determine how long it will tale to pay off the average loan in your
state for the following:
What career are you thinking about? If you’re not sure, that’s OK - just pick a career listed.
This is how much money you’d gross each month. Your gross amount is the amount BEFORE state and federal
taxes and other items like retirement and sometimes health and dental insurance are taken out. The amount
taken out varies on your situation, but it is usually about 20% of your gross pay.
24. To figure out your approximate take home pay each month, first find out how much in taxes you will pay by
taking your monthly salary and multiplying it by .20.
Next, subtract the amount of taxes taken out from your monthly salary.
_______ (monthly salary) - _________ (amount of taxes taken out) = _____________ (take home pay)
25. Look back at page 1. Is your monthly take home pay enough to cover your chosen lifestyle?