Name ________________________
Period ________________________
My Dream Car
Part 1: Go to the following bank websites. Write down the name of the bank
and the interest rate that you can get on an auto loan. Assume that you will be
financing your car for 5 years (60 months). The best rates will be with excellent
credit and the highest rates will be for poor credit scores.
Websites:
https://www.centralsunbeltfcu.org/
http://www.statefarm.com/
http://cscu.org/
Bank Number Bank Name Interest Rate
(%)
1. Central Sunbelt Credit Union (Use lowest rate)
2. State Farm (Use highest rate)
3. CO-OP Services Credit Union (Use avg. rate)
Part 2: Use the following websites to search for your dream car! You can also
build your car on some of the manufacturer’s sites to obtain your cost.
www.vehix.com
www.autotrader.com
www.kbb.com
Record the name and price (or MSRP for new cars) of your car in the space
below. Don’t forget to print the picture of your car!
Car Name _________________________________ Price____________________
Practice Problems
Part 1: Complete the following practice problems using the finance application (TVM-
Solver).
1. You are going to purchase a corvette for $60,000, the interest rate is 4% and you will be
paying off the loan in 5 years. What will your monthly payment be?
Monthly Payment ___________________________
2. You are going to purchase the corvette at the same price with the same term but the
interest rate increases from 4% to 8%. What will be your new payment?
Monthly Payment ___________________________
3. You are going to purchase a Toyota Yaris for $13,000 with the same interest and term.
What is your payment?
Monthly Payment ___________________________
Part 2: Complete the following practice problems using the finance application (Sigma-
Interest).
1. You are purchasing a Hummer for $99,000 from CoolKarz Dealership. They have
two different payment options for you to choose from.
Option A: You purchase the Hummer with an interest rate of 9.5% and you will be
paying off the loan in 6 years. Calculate your monthly payment and the total interest
that you will pay in 6 years.
Monthly Payment __________________ Interest Paid ____________________
Option B: You purchase the Hummer with an interest rate of 9.5% and you will be
paying off the loan in 4 years. Calculate your monthly payment and the total interest
that you will pay in 4 years.
Monthly Payment __________________ Interest Paid ____________________
Which option gives you the better monthly payment, option A or B? _________
Which is the better deal in the long run? ______________
My Very Own Dream Car
Part 1: Car Information (*Choose a New Model)
Car Make and Model (Ex: 2004 BMW 325)______________________
Price of Car _____________________________
Part 2: Perform the following calculations
1. Use the interest rate provided by bank #1. Calculate your monthly payment and total
interest paid. Assume that you will be paying off the car in 5 years.
Monthly Payment: _____________________ Interest Paid: ______________
2. Use the interest rate provided by bank #2. Calculate your monthly payment and total
interest paid. Assume that you will be paying off the car in 5 years.
Monthly Payment: _____________________ Interest Paid: ______________
3. Use the interest rate provided by bank #3. Calculate your monthly payment and total
interest paid. Assume that you will be paying off the car in 5 years.
Monthly Payment: _____________________ Interest Paid: ______________
Part 3: Answer the questions in complete sentences.
4. Which bank will provide you with the best monthly payment? ______________
5. Which bank will give you the better deal in the long run? ______________
6. Do you think you will be able to buy this car when you turn 16? ____________
Part 4: Go to www.kbb.com and answer the following questions about a 2008 Ford Mustang
GT. You can equip the car with any options you like.
7. What is the cost new? ____________________
8. How much would a 2006 model with 30,000 miles cost? ___________________
9. Now, look at the 2008 Mustang GT and calculate the monthly note assuming a 7.5%
interest rate. After two years how much have you paid on your vehicle? ____________
10. How much is left on the loan? _________________________
11. We can assume the same depreciation for the vehicle in two years by looking at the
value of the 2006 model. What is the difference between the value and the loan
amount? ___________________
12. Was it a good idea to buy a new car? Why or why not? ___________________________
_______________________________________________________________________