Auto loan terms

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This is a power point I use to teach about various terms related to Auto Loans. These terms are essential for completing the Auto Loans Project in my high school Consumer Education class.

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Auto loan terms

  1. 1. Auto Loan Terms& Auto Loan Project<br />Miss Opland<br />Consumer Ed.<br />
  2. 2. Objectives:<br />Become familiar with several terms associated with auto loans.<br />Apply auto loan formulas in real-life scenarios.<br />Use the Internet to research automobiles, loans, and associated costs.<br />Evaluate 3 different auto loans and make a wise consumer choice on 1 of them.<br />Present project findings using Glogster.<br />
  3. 3. Negotiated<br />Price<br />N<br />na<br />Down <br />Payment<br />D<br />Trade-In <br />Value<br />V<br />
  4. 4. Principal<br />P<br />Annual<br />Percentage<br />Rate<br />R<br />
  5. 5. Time<br />Period<br />T= number of years, n= number of months<br />T= number of months ÷12<br />n= number of years ×12<br />Monthly<br />Payment<br />M<br />
  6. 6. Total <br />Loan<br />Amount<br />A<br />Total<br />Purchasing<br />Cost<br />C<br />
  7. 7. Using the formulas…<br />Example: <br /> <br /> In 2007, Miss Opland financed a new Toyota Prius. The negotiated price, with all fees and taxes included, was $24,921.24. The APR she was given was 5.75% and the term of the loan was 5 years. She made a $5000 down payment. She did not have a car to trade-in. <br /> <br />How much is her monthly payment?<br />What is her total loan amount?<br />What is her total purchasing cost?<br />
  8. 8. Number the rows of your chart (if you wish)!<br />1. Negotiated Price <br />2. Down Payment<br />3. Trade-In Value <br />4. Principal <br />5. Annual Percentage Rate <br />6. Time Period <br />7. Monthly Payment<br />8. Total Loan Amount<br />9. Total Purchasing Cost<br />$24,921.24<br />First, write in the “givens”!<br />Then, use the formulas to find the remaining amounts!<br />$5,000<br />None!<br />P= 24,921.24 – 5,000 – 0<br />= 19,921.24<br />5.75%<br />n=5×12<br />=60<br />M≈382.81 (used online auto loan calculator!)<br />A=382.81 ×60<br />=22,932.60<br />=27,932.60<br />C=5,000 + 0+22,932.60<br />
  9. 9. Total Interest Paid<br />To find the total interest paid calculate the total loan amount minus the principal!<br />$22,932.60 – $19,921.24 = $3,011.36<br />This means, when I finish paying off my car, I will have paid $3,011.36 extra (assuming I don’t pay it off early)!<br />
  10. 10. Auto Loans Project! – 50 points<br />See handout provided in class (it is also on the weebly)!<br />

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