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April 19, 2022
1008
April 19, 2022

Complete the two financial health activities (The True Cost of a New Car and  The True Cost of Credit Card Use) presented in Unit 7 Topic “Financial Health” related to spending money you do not have.

• Share your experience with “The True Cost of a New Car” activity with your peers
• Change the size of the loan, years to pay it back, and the interest rate three (3) to four (4) times.
• Start with the lowest loan amount you might need for your new care and increase by \$5000 to \$10000 each turn.
• Start with a 3% loan (entered as .03) and increase by one (1) or two (2) percent each turn.
• In each case choose between 5 and 7 years to pay it back.
• Describe one of the monthly payments you would have to make based on your selections.
• Loan amount?
• Interest rate?
• Years to pay it back?
• Monthly payment?
• Total car cost?
• Discuss the potential impact a car payment of that size might have on your monthly budget.
• Describe the other monthly expenses you would have to remove or reduce to make your payments.
• Why Is or isn’t the car worth the sacrifices you might have to make given the size of the monthly payments?
• What other options do you have to avoid taking out a car loan?
• Share your experience with ” The True Cost of Credit Card Use” activity with your peers
• Consider the following scenario:
• You spend an extra \$50 a month using a credit card for the first year after graduation to make ends meet.
• The interest rate charged by the credit card company is 18%.
• The minimum payment you are required to send each month is \$20.
• Now consider the real cost of that \$50 dollars a month by the end of that first year provided to you in the exercise.
• How might the continued use of a credit card to fund an extra \$50 of spending per month affect your long-term financial health?
• Describe two ways you could avoid the long-term consequences of spending more than you have on a regular basis.

Please be sure to validate your opinions and ideas with citations and references in APA format.