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    Major Financial Decisions

    Uploaded by

    jasminbains26
    The document outlines the steps to take out a car loan, including deciding on a make and model, getting loan quotes from multiple lenders, calculating monthly payments and total costs, and choosing the best loan option based on factors like interest rate and total amount paid. It provides an example of going through the process to get a loan to purchase a 2011 Volkswagen Golf GTI for $15,000, comparing loan options from three lenders to determine that Unity Bank offers the lowest interest rate and total payment.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Major Financial Decisions

    Uploaded by

    jasminbains26
    13 views9 pages
    The document outlines the steps to take out a car loan, including deciding on a make and model, getting loan quotes from multiple lenders, calculating monthly payments and total costs, and choosing the best loan option based on factors like interest rate and total amount paid. It provides an example of going through the process to get a loan to purchase a 2011 Volkswagen Golf GTI for $15,000, comparing loan options from three lenders to determine that Unity Bank offers the lowest interest rate and total payment.

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    The document outlines the steps to take out a car loan, including deciding on a make and model, getting loan quotes from multiple lenders, calculating monthly payments and total costs, and choosing the best loan option based on factors like interest rate and total amount paid. It provides an example of going through the process to get a loan to purchase a 2011 Volkswagen Golf GTI for $15,000, comparing loan options from three lenders to determine that Unity Bank offers the lowest interest rate and total payment.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    13 views9 pages

    Major Financial Decisions

    Uploaded by

    jasminbains26
    The document outlines the steps to take out a car loan, including deciding on a make and model, getting loan quotes from multiple lenders, calculating monthly payments and total costs, and choosing the best loan option based on factors like interest rate and total amount paid. It provides an example of going through the process to get a loan to purchase a 2011 Volkswagen Golf GTI for $15,000, comparing loan options from three lenders to determine that Unity Bank offers the lowest interest rate and total payment.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    Major financial decisions

    Scenario 1 Scenario 2
    Scenario 1

    • Step 1: Decide on a make and model


    • Step 2: Determine how much money you will need to borrow
    • Step 3: Get quotes from several lenders on a car loan
    • Step 4: Calculate your monthly payments and total amounts paid
    • Step 5: Decide which loan makes the most sense for you.
    Scenario 1 –
    Step 1: Decide on a make and model
    Visit https://www.redbook.com.au/ Insert image:
    to find the price of the car you would
    like to buy; then record it here.
    Make: Volkswagen
    Model: 2011 Golf GTI VI Auto MY11
    Total purchase price:
    $15000
    Scenario 1 –
    Step 2: Determine how much money you will need to borrow

    Subtract the money you have Purchase price


    for a down payment (the
    amount you give to the dealer
    subtract
    on the day of purchase) from Down payment
    the total purchase price. For =15000 - 5000
    this exercise imagine you
    have saved $5000 for a down Loan principal:
    payment. The resulting total is $10 000
    the loan principal; record that
    amount here.
    Scenario 1 –
    Step 3: Get quotes from several lenders
    The term and interest rate of the loan will vary, and both of these factors will affect
    your monthly payment. Research three different car loans and fill in the table
    below:
    Lender (i.e. bank) Loan Principal Loan Term Interest Rate

    Westpac.com.au $10000 36 months Fixed rate from


    5.99%
    Unity Bank $10000 36 months 4.95%

    commbank.com.au $10000 36 months 7.50%


    Scenario 1 –
    Step 4: Calculate your monthly payments and total amount
    Your monthly payment is your principal divided by the number of months in your loan term, and
    then multiplied by your interest rate. Next, multiple the monthly payment by the loan term to
    determine the total amount paid. Record your monthly payments and final amounts paid in the
    chart below.
    Lender Loan Principal Loan Term Interest Rate Monthly Total Amount
    Payment Paid

    Westpac.com.au $10000 36 months Fixed rate from $304 $10,944


    5.99%

    Unity Bank $10000 36 months 4.99% $299 $10,781


    Commbank.com. $10000 36 months 7.50% $312 $11,199
    au
    Scenario 1 –
    Step 5: Decide which loan makes the most sense for you.

    From your table which do you And why? List at least


    think is the best option? three points
    From Unity bank. - The paid amount is
    cheaper
    - Less interest
    Scenario 1 – Reflection
    1. What factors influenced your choice of make and model? The car looked pretty simple to get as a first car.

    2. Write down the meaning of the term gas mileage: the number of miles that a vehicle can travel using a particular
    amount of fuel.

    3. What is the gas mileage of your chosen car? And would it affect your decision to purchase your chosen car? 180,
    000Km

    4. How much extra was the Total Amount of your chosen loan compared to the purchase price of your chosen car?
    Total amount of the loan taken is $10, 000 to payback it is, $10, 781 and the original price was $15, 000.

    5. How realistic would it be for you to purchase your make and model as your first car? And are there any decisions or
    further research you would do, after going through the car-buying process. . I wouldn’t purchase it as of yet, I
    would ask my parents to check it and to see if further research needs to be done before purchasing first.
    Scenario 2 – Preparation

    Create a step-by-step plan for buying a cell-phone:


    1. Step 1: decide on a phone.
    2. Step 2: research different types of phone plans
    3. Step 3: get quotes from several providers
    4. Step 4: decide which plan to get.

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