Using a case study, students explore how the amount borrowed, interest rates, and the term of a loan can increase or decrease the amount of loan payments.
Topic
Borrow (Getting loans, Managing credit)
Subject
CTE (Career and technical education), Math
Grade Level
High school (9-10), High school (11-12)
Duration
75-90 minutes
Big idea
The amount of an installment loan payment amount is the result of several factors.
Essential questions
- How do principal, interest rate, and loan term affect loan payments?
- What criteria do you use to compare loan offers to get the best deal?
Objectives
- Make informed choices about credit offers
- Calculate monthly payments for loans based on principal, interest rate, and loan term
What students will do
- Calculate and analyze how monthly payments on a loan change based on the principal, interest rate, and term.
- Compare borrowing options to identify the best deal.
- Reflect on ways to reduce the amount owed on a loan.
Download activity
Teacher guide
cfpb_building_block_activities_calculating-loan-payments_guide.pdf
Student materials
cfpb_building_block_activities_calculating-loan-payments_worksheet.pdf
Note: Please remember to consider your students’ accommodations and special needs to ensure that all students are able to participate in a meaningful way.
