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.
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