CLC 12 – Financial Literacy - Loans

Calculating your monthly costs and interest rates for your car.
To calculate the payment cost for your car loan, we are going to run four separate scenarios,
using the vehicle you chose to purchase in the Online Shopping Challenge.

What is the final cost of your vehicle before taxes?

Year, make and model of vehicle Final cost after dealer fees
2024 Hyundai Elantra $31,000

Using the auto loan calculator tool, you will see how modifying different variables of your car
loan can affect your monthly payments and your overall borrowing costs.

https://www.cchwebsites.com/content/calculators/CAAutoLoan.html
 Down payment
 Interest rate
 Duration of the loan
 Payment schedule
Down Payment: The amount of money you put towards the final cost of the
vehicle which does not need to be calculated in the overall borrowing amount.
You are going to investigate three different options for your down payment. Use the Personal
Loan Calculator for each scenario.
**On the Auto Loan Calculator website, make sure you change your Trade Allowance and the
Amount Owed on Trade boxes to $0 to get accurate payment calculations.**

Option #1 – No down payment

Put in the price for your vehicle and amortize it over 5 years (60 months) at 9% interest. Record
your monthly payment and the total amount of interest you will pay over the length of your car
loan.

Loan Amount $31,000

Monthly Payment $643.51
Total amount of interest paid over 5 years $7,610.54

Option #2 – 10% Down Payment

Put in the price for your vehicle and amortize it over 5 years (60 months) at 9% interest. Record
your monthly payment and the total amount of interest you will pay over the length of your car
loan.

Down Payment Amount $3,100

Loan Amount $27,900
Monthly Payment $579.16
Total amount of interest paid over 5 years $6,849.49

Option #3 – 20% Down Payment

Put in the price for your vehicle and amortize it over 5 years (60 months) at 9% interest. Record
your monthly payment and the total amount of interest you will pay over the length of your car
loan.

Down Payment Amount $6,200

Loan Amount $24,800
Monthly Payment $514.81
Total amount of interest paid over 5 years $6,088.43
Interest Rate: The percentage of interest that is charged for the amount
being borrowed over a designated amount of time.
You are going to investigate three different options for your Interest Rate. Use the Personal
Loan Calculator for each scenario.

Option #1 – Standard 9% Interest Rate

Put in the price for your vehicle loan and amortize it over 5 years (60 months) at 9% interest.
Record your monthly payment and the total amount of interest you will pay over the length of
your car loan.

Loan Amount $31,000

Monthly Payment $643.51
Total amount of interest paid over 5 years $7,610.54

Option #2 – Discounted 6% Interest Rate

Put in the price for your vehicle and amortize it over 5 years (60 months) at 6% interest. Record
your monthly payment and the total amount of interest you will pay over the length of your car
loan.

Loan Amount $31,000

Monthly Payment $599.32
Total amount of interest paid over 5 years $4,959.01

Option #3 – Inflated 12% Interest Rate

Put in the price for your vehicle and amortize it over 5 years (60 months) at 12% interest.
Record your monthly payment and the total amount of interest you will pay over the length of
your car loan.

Loan Amount $31,000

Monthly Payment $689.58
Total amount of interest paid over 5 $10,374.67
years
Duration of the Loan: The amount of time, usually in months or years,
that is given to repay the loan.
You are going to investigate three different options for the duration of your loan. Use the
Personal Loan Calculator for each scenario.

Option #1 – 5 year / 60 month loan

Put in the price for your vehicle loan and amortize it over 5 years (60 months) at 9% interest.
Record your monthly payment and the total amount of interest you will pay over the length of
your car loan.

Loan Amount $31,000

Monthly Payment $643.51
Total amount of interest paid over 5 years 7,610.54

Option #2 – 4 year / 48 month loan

Put in the price for your vehicle and amortize it over 4 years (48 months) at 9% interest. Record
your monthly payment and the total amount of interest you will pay over the length of your car
loan.

Loan Amount $31,000

Monthly Payment $771.44
Total amount of interest paid over 4 years $6,028.94

Option #3 – 6 year / 72 month loan

Put in the price for your vehicle and amortize it over 6 years (72 months) at 9% interest. Record
your monthly payment and the total amount of interest you will pay over the length of your car
loan.

Loan Amount $31,000

Monthly Payment $558.79
Total amount of interest paid over 6 years $9,233
Payment Schedule: The frequency which you repay your loan.
You are going to investigate three different options for the repayment schedule of your loan.
Use the Personal Loan Calculator for each scenario.

Option #1 – 5 year / 60 month loan with Monthly Payments

Put in the price for your vehicle loan and amortize it over 5 years (60 months) at 9% interest
with monthly payments. Record your monthly payment and the total amount of interest you
will pay over the length of your car loan.

Loan Amount $31,000

Monthly Payment $643.51
Total amount of interest paid over 5 years $7,610.54

Option #2 – 5 year / 60 month loan with Bi-Weekly Payments

Put in the price for your vehicle loan and amortize it over 5 years (60 months) at 9% interest
with Bi-Weekly payments. Record your bi-weekly payments and the total amount of interest
you will pay over the length of your car loan.

Loan Amount $31,000

Bi-Weekly Payment $573.07
Total amount of interest paid over 5 years $3,383.98

Option #3 – 5 year / 60 month loan with Weekly Payments

Put in the price for your vehicle loan and amortize it over 5 years (60 months) at 9% interest
with Weekly payments. Record your monthly payment and the total amount of interest you
will pay over the length of your car loan.

Loan Amount $31,000

Weekly Payment $544.40
Total amount of interest paid over 5 years $1,664.27