formatting blackline masters · web viewthe total credit card price is _3.4_% greater, to...

Unit 6, Activity 1, Vocabulary Chart

During the unit on credit, maintain this vocabulary self-awareness chart. Before we begin this unit, rate your understanding of each word with either a “+” (understand well), a “√” (limited understanding or unsure), or a “—“ (don’t know). Over the course of this unit, return to this chart and revise any √ or – marks to + marks as you learn new information. The goal is to replace all the check marks and minus signs with a plus sign. When a + mark is made for a word, provide an example and a definition in your own words. The completed chart is due when we complete the unit.

Word + or √ or - Example Definition

Credit card

Charge card

Debit card

Finance charge

Minimum payment

Credit limit

Annual fee

Annual percentage rate

Monthly periodic rate

Variable interest rate

Prime rate

Fair Credit Reporting Act

Equal Credit Opportunity Act

Truth in Lending Act

Blackline Masters, Financial Math 43Louisiana Comprehensive Curriculum, Revised 2008

Unit 6, Activity 1, Credit Knowledge

Name___________________

Task:1. Go to: http://www.practicalmoneyskills.com/english/index.php.

2. In the “At Home” tab, choose “Credit Cards” on the left under “Learning

Centers.”

3. Begin under the “Learn It” column.

a. Start with “Advantages and disadvantages”, click on the link and explore

the information provided.

b. Move down the links in the “Learn It” column. Explore all the links in the

column.

4. When complete, move on to the “Do It” column.

a. Here you will be taking four interactive quizzes:

i. Quiz 1: Quiz your knowledge (matching game)

ii. Quiz 2: About credit

iii. Quiz 3: Quiz your credit knowledge

iv. Quiz 4: Wise use of credit

b. Pause after each quiz, get my attention, and I will record your score for the

quiz.

Quiz 1 Quiz 2 Quiz 3 Quiz 4

5. After I have recorded your four quiz grades on this sheet, turn it in.

Blackline Masters, Financial Math Page 144Louisiana Comprehensive Curriculum, Revised 2008

http://www.practicalmoneyskills.com/english/index.php

Unit 6, Activity 2, Credit Card Statement

Credit Card StatementAccount Number:1111-2222-3333-4444Payment Due:5/13/2008Name: Boudreaux Dontired Statement Date: 4/14/2008

Billing Period: 3/14/08 – 4/14/08

Credit Line: $500.00

Credit Available: $309.14

New Balance: $190.86

Minimum Payment Due: $20.00

Reference Sold Posted Activity Since Last Statement Amount4833XF89 3/01 3/20 John’s BAR-B-Q 14.83JJK98TRX 3/15 3/28 Baby’s Clothes Rack 52.91987PAY12 4/11 Payment – Thank You -50.00

Previous Balance: Purchases: Cash Advances: Payments:Credits:Finance Charge:Late Charge:NEW BALANCE

+169.38+67.74+-50.00-+4.10+190.86

Current Amount Due:Amount Past Due:Amount Over Credit Limit:

Minimum Payment Due:

190.86

20.00

Periodic Rate:

Annual Percentage Rate:

Purchase:

2%

24%

Cash Advance

3%

36%Customer Service, call: 1-800-###-####

For Lost or Stolen Credit Cards, call: 1-800-###-####

Task:1. Go to:

http://www.practicalmoneyskills.com/english/resources/tutor/statements/credit_state.php

2. Pause at each topic on the right side of the screen, make note where each piece of information is on the interactive account statement.

3. Label the Credit Card Statement above with the terms illustrated on the interactive form. Ignore any missing sections on the above form.


http://www.practicalmoneyskills.com/english/resources/tutor/statements/credit_state.php

Unit 6, Activity 5, Credit Card Application

Task:1. Fill-out each of the credit card applications, minus your social security number.2. Read through the credit card agreement that should be attached to the application and, using the

chart below, make notes about the key points of the credit agreement.

Key PointCard 1

Card name:Card 2

Card name:

Annual percentage rate (APR) for purchases,list all

Other APRs, list all

Cash Advance APR:

Balance Transfer APR:

Default APR:

Cash Advance:

Introductory:

Delinquency:

Variable-rate information

Grace period for repayment of balance for purchasesMethod of computing the balance for purchasesAnnual fee

Minimum finance charge

Transaction fee for balance transfers

Transaction fee for cash advances

International transactions

Late payment fee

Over-the-credit-limit fee


Unit 6, Activity 8, Installment Loan with Tables

Task: 1. Use the formulas and table below to answer the questions.2. For each problem, find the monthly payment, total amount repaid & total finance

charge.3. Answer each question on your own paper, show all work.

Formulas:Monthly Payment = (Amount of Loan / $100) X Monthly Payment on a $100 Simple

Interest Installment Loan (This is the number from the table.)

Total Amount Repaid = Number of payments X Monthly Payment

Total Finance Charge = Total Amount Repaid - Amount of Loan

Monthly Payment on a $100 Simple Interest Installment LoanTerm

in months

Annual Percentage Rate

8% 9% 10.5% 11.5% 12% 14% 15% 16% 17% 18% 24%

6 17.06 17.11 17.18 17.23 17.25 17.35 17.40 17.45 17.50 17.55 17.85

12 8.70 8.75 8.81 8.86 8.88 8.98 9.03 9.07 9.12 9.17 9.46

18 5.91 5.96 6.03 6.08 6.10 6.19 6.24 6.29 6.33 6.38 6.67

24 4.52 4.57 4.64 4.68 4.71 4.80 4.85 4.90 4.94 4.99 5.29

30 3.69 3.73 3.80 3.85 3.87 3.97 4.02 4.07 4.11 4.16 4.46

36 3.13 3.18 3.25 3.30 3.32 3.42 3.47 3.52 3.57 3.62 3.92

40 2.86 2.90 2.97 3.02 3.05 3.14 3.19 3.24 3.29 3.34 3.66

48 2.44 2.49 2.56 2.61 2.63 2.73 2.78 2.83 2.89 2.94 3.26

60 2.03 2.08 2.15 2.20 2.22 2.33 2.38 2.43 2.49 2.54 2.88

1. Installment loan of $2000. 12 monthly payments. APR is 18%.


3. Installment loan of $2000. 24 monthly payments. APR is 11.5%.









Unit 6, Activity 8, Installment Loan with Tables with Answers

ProblemMonthly

Payment

Total Amount

Repaid

Total Finance

Charge


$183.36 $2,200.32 $200.32


$99.85 $2,396.40 $396.40


$93.68 $2,248.08 $248.08


$173.98 $2,087.76 $87.76


$499.24 $11,981.76 $1,981.76


$470.73 $11,297.52 $1,297.52


$452.27 $10,854.48 $854.48


$734.37 $35,249.76 $10,249.76


$610.32 $29,295.36 $4,295.36


$726.54 $43,592.40 $8,592.40


Unit 6, Activity 9, Repayment Simulation

Scenario: Imagine you purchase a CD player for your car at a local electronics store. The CD player and installation totals $378.23. You open your first charge account to pay for the purchase. Your account agreement requires you to pay a minimum of $20 each month until the CD player is paid off. Your annual interest rate is 18%.

Problem: Create and complete a repayment schedule for your CD player loan. You make no other charges or additional payments beyond the minimum to your account for the duration of the payoff.

Solution: Include: (1) a repayment schedule, started below, (2) total months needed to payoff the CD player, (3) total amount paid for the CD player, and (4) total interest paid. Note: Calculate interest using the unpaid-balance method learned in unit 6.

Repayment Schedule for CD player loan

Payment # Monthly Payment

Amount for interest

Amount for principal New Principal

1 $20 $5.67 $14.33 $363.902 $20 $5.46 $14.54 $349.363 $20 $5.24 $14.76 $334.604 $20 $5.02 $14.98 $319.625 $20 $4.79 $15.21 $304.41

Note: You may need to add to the table provided. If so, complete on back.


Unit 6, Activity 9, Repayment Simulation with Answers

Solution table.

Repayment Schedule for CD player loan

Payment # Monthly Payment

Amount for interest

Amount for principal New Principal

1 $20 $5.67 $14.33 $363.902 $20 $5.46 $14.54 $349.363 $20 $5.24 $14.76 $334.604 $20 $5.02 $14.98 $319.625 $20 $4.79 $15.21 $304.416 $20 $4.57 $15.43 $288.987 $20 $4.33 $15.67 $273.318 $20 $4.10 $15.90 $257.419 $20 $3.86 $16.14 $541.2710 $20 $3.62 $16.38 $224.8911 $20 $3.37 $16.63 $208.2612 $20 $3.12 $16.88 $191.3813 $20 $2.87 $17.13 $174.2514 $20 $2.61 $17.39 $156.8615 $20 $2.35 $17.65 $139.2116 $20 $2.09 $17.91 $121.3017 $20 $1.82 $18.18 $103.1218 $20 $1.55 $18.45 $84.6719 $20 $1.27 $18.73 $65.9420 $20 $.99 $19.01 $46.9321 $20 $.70 $19.30 $27.6322 $20 $.41 $19.59 $8.0423 $8.16 $.12 $8.04 $0.00

Note: You may need to add to the table provided. If so, complete on back.

Total repaid: $448.16Total interest: $69.93


Unit 6, Activity 10, Electronic Loan Calculation

Task1. Work the problems below, find the monthly payment.2. Use an Internet loan calculator at the link below.3. Go to: http://www.bankrate.com/brm/popcalc2.asp4. Print an amortization table for a problem of your choice.












http://www.bankrate.com/brm/popcalc2.asp

Unit 6, Activity 10, Electronic Loan Calculation with Answers

Refer to Installment Loan with Tables with Answers for monthly payment, total amount repaid, and total finance charge.

Amortization table for question #1.

Amortization Table for $2000.00 borrowed for 12 months at 18%

PaymentNumber 1 2 3 4 5 6 7 8 9 10 11 12

Payment ($) 183.36 183.36 183.36 183.36 183.36 183.36 183.36 183.36 183.36 183.36 183.36 183.36

Principal Paid ($)

153.36 155.66 158.00 160.37 162.77 165.21 167.69 170.21 172.76 175.35 177.98 180.65

Interest Paid ($)

30.00 27.70 25.36 22.99 20.59 18.15 15.67 13.15 10.60 8.01 5.38 2.71

Total Interest ($)

30.00 57.70 83.06 106.06 126.65 144.80 160.47 173.62 184.22 192.23 197.61 200.32

Balance ($) 1846.64 1690.98 1532.98 1372.62 1209.85 1044.64 876.95 706.74 533.98 358.63 180.65 0.00


Unit 6, Activity 12, Loan What-If

Names:

Task:1. This is a group activity. Form into groups of 3 or 4.2. Compare the loans from the table below. Take note of the differences and

similarities of the loans.3. Use the following website:

http://www.quicken.com/banking_and_credit/loan_calc/ to calculate the loans.4. Remember, amount financed = loan amount + fees financed

Loan Comparison WorksheetInputs Outputs

Loan Amount

Interest Rate

Term in years

Fees Financed

Amount Financed

Payment Total Interest

Scenario 1a.$10,000 8.5% 5 $950b.$10,000 12% 5 $950c.$10,000 19.5% 5 $950d.$10,000 7.5% 5 $950

Scenario 2a.$29,050 8.5% 5 $0b.$29,050 8.5% 5 $1,168c.$29,050 8.5% 5 $450d.$29,050 8.5% 5 $700

Scenario 3a.$3,000 6.5% 4 $825b.$3,000 6.5% 3.5 $825c.$3,000 6.5% 3 $825

Scenario 4a.$19,175 4.5% 4 $0b.$19,175 5.34% 5 $0c.$19,175 3.9% 3 $0

5. After the table is complete, turn the sheet over and rate the loans from each scenario. Discuss the rationale for your choice with the group and summarize in the box provided.

6. Be prepared to present your decisions to the class.


http://www.quicken.com/banking_and_credit/loan_calc/

Unit 6, Activity 12, Loan What-If

First Choice. Why? Second Choice. Why? Third Choice. Why?

Scenario 1

Scenario 2

Scenario 3

Scenario 4


Unit 6, Activity 12, Loan What-If with Answers

Loan Comparison WorksheetInputs Outputs

Loan Amount

Interest Rate

Term in years

Fees Financed

Amount Financed

Payment Total Interest

Scenario 1$10,000 8.5% 5 $950 $10,950 $224.66 $2,529$10,000 12% 5 $950 $10,950 $243.58 $3,665$10,000 19.5% 5 $950 $10,950 $287.07 $6,274$10,000 7.5% 5 $950 $10,950 $219.42 $2,215

Scenario 2$29,050 8.5% 5 $0 $29,050 $596.01 $6,710$29,050 8.5% 5 $1,168 $30,218 $619.97 $6,980$29,050 8.5% 5 $450 $29,500 $605.24 $6,814$29,050 8.5% 5 $700 $29,750 $610.37 $6,872

Scenario 3$3,000 6.5% 4 $825 $3,825 $90.71 $529$3,000 6.5% 3.5 $825 $3,825 $102.07 $462$3,000 6.5% 3 $825 $3,825 $117.23 $395

Scenario 4$19,175 4.5% 4 $0 $19,175 $437.26 $1,813$19,175 5.34% 5 $0 $19,175 $364.85 $2,716$19,175 3.9% 3 $0 $19,175 $565.27 $1,175

Each group’s reasons (pros/cons) should include items such as: If I finance the loan fees, my monthly payment is higher If I finance the loan fees, my total cost is higher If I make a down payment, my monthly payment is lower If I make a down payment, my total cost is lower If I decrease the term of the loan, my monthly payment is higher If I decrease the term of the loan, my total cost is lower If I obtain a lower rate, my monthly payment is lower If I obtain a lower rate, my total cost is lower


Unit 6, Activity 13, Discussion Guide

Your Credit ApplicationPredictions:

Questions:

Clarifications:

Summary:

Was the prediction confirmed? Yes No

Details:



Your Credit Billing and Electronic Fund Transfer StatementsPredictions:

Questions:

Clarifications:

Summary:


Details:

Blackline Masters, Financial Math 7Louisiana Comprehensive Curriculum, Revised 2008


Your Debts and Debt CollectorsPredictions:

Questions:

Clarifications:

Summary:


Details:



Solving Your Credit ProblemsPredictions:

Questions:

Clarifications:

Summary:


Details:


Unit 6, General Assessments, Use of Credit Rubric

Use of Credit Essay

Name: ________________________ Teacher: Date Submitted: ____________ Title of Work: Criteria Points

1 2 3 4

OrganizationSequence of

information is difficult to follow.

Reader has difficulty

following work because student jumps around.

Student presents information in

logical sequence which reader can

follow.

Information in logical,

interesting sequence which

reader can follow.

____

Content Knowledge

Student does not have grasp of information; student cannot answer

questions about subject.

Student is uncomfortable

with content and is able to

demonstrate basic concepts.

Student is at ease with content, but fails to elaborate.

Student demonstrates full knowledge (more

than required).

____

Grammar and Spelling

Work has four or more spelling errors and/or grammatical

errors.

Presentation has three misspellings

and/or grammatical

errors.

Presentation has no more than two

misspellings and/or

grammatical errors.

Presentation has no misspellings or

grammatical errors.

____

Neatness Work is illegible.Work has three or four areas that are

sloppy.

Work has one or two areas that are

sloppy.

Work is neatly done. ____

References Work displays no references.

Work does not have the

appropriate number of required

references.

Reference section was completed

incorrectly

Work displays the correct number of

references, written correctly.

____

Total----> ____

Teacher Comments:Comments:

Powered by TeAch-nology.com- The Web Portal For Educators! (www.teach-nology.com)


Unit 6, General Assessments, Test

Name________________________________________________Date_______________

Jan and Fred Easton have been shopping for a boat and outboard motor for use on a nearby lake during warm weather. They have shopped very carefully for the boat for several months and believe that they have picked the right boat and motor combination and the right dealer for their needs. The cash price they have bargained for the used boat they want is $6,000. This price includes a used trailer.

The Eastons also shopped around carefully to find the best deal for borrowing the amount of money they will need to buy the boat. They have identified three sources for the funds they need: the boat dealer, their credit union, and a special low-interest rate credit card. The information they have gathered about each loan is presented below. Answer the questions about each loan offer.

I. The boat dealer’s deal: The boat dealer, Water-Craft Sales, Inc., has offered the Eastons these installment plan terms: 10% down payment and the remainder to be paid in 24 payments of $261 each. Under this plan,

1. The amount financed is $______________________.

2. The installment price of the boat is $_______________________.

3. The total finance charge is $________________________.

4. The total installment plan price of the boat is _____________% greater than the cash price.

5. Using the table below, the annual percentage rate for the dealer’s offer is ___________%.

No. of payments

Annual Percentage Rate14.00 14.25 14.50 14.75 15.00 15.25 15.50 15.75 16.00 17.00 18.00

(Finance Charge per $100 of Amount Financed)6 4.12 4.20 4.27 4.35 4.42 4.49 4.57 4.64 4.72 5.02 5.3212 7.74 7.89 8.03 8.17 8.31 8.45 8.59 8.74 8.88 9.45 10.0218 11.45 11.66 11.87 12.08 12.29 12.50 12.72 12.93 13.14 13.99 14.8520 12.70 12.93 13.17 13.41 13.64 13.88 14.11 14.35 14.59 15.54 16.4924 15.23 15.51 15.80 16.08 16.37 16.65 16.94 17.22 17.51 18.66 19.8230 19.10 19.45 19.81 20.17 20.54 20.90 21.26 21.62 21.99 23.45 24.9236 23.04 23.48 23.92 24.35 24.80 25.24 25.68 26.12 26.57 28.35 30.15

II. The Credit Union’s Deal: The Carlton Credit Union has offered the Eastons these terms: A $6,000, two-year loan with interest on the unpaid balance at the monthly rate of 1.25%. They are to make monthly payments of $250 on the principal along with interest for the month. The Eastons must also sign a promissory note for the loan and pledge the boat, motor, and trailer as collateral.



6. Complete the monthly payment schedule below.

Carlton Credit UnionRepayment Schedule forJanice and Fred Easton

PaymentNumber

UnpaidBalance

Payment onPrincipal

MonthlyInterest Total Payment

1 $6,000 250 $75.00 $350.002 5,750 250 71.88 321.883 5,500 250 68.75 318.754 250 65.63 315.635 250 62.50 312.506 250 309.387 250 306.258 2509 25010 25011 25012 25013 25014 25015 25016 25017 25018 25019 25020 25021 25022 25023 25024 250

Totals $6,000

Under this plan,

7. The total price of the boat is $___________________________.

8. The total finance charges are $__________________________.

9. The total installment plan price of the boat is _____________% greater, to the nearest

tenth of a percent, than the cash price.

10. The annual rate of interest charged is _____________________%.



III. The Credit Card Option: The Eastons have just received a new credit card offer. They can charge up to $7,500 on any purchases. The card offers a 7% annual percentage rate until April 30, 20__. After that, an 18% annual percentage rate will be charged. Finance charges are based on the previous balance. If they buy the boat using the credit card, no down payment is required. The Eastons would not make any other purchases with the card until the boat and motor were paid off. Because Mrs. Easton receives quarterly checks from a devoted aunt, the Eastons know they can make the principal payments shown in the chart below. The first payment is due on April 7.

11. Complete the following chart showing the monthly finance charge, total payment, and new balance.

Date7% Annual Percentage

Rate

Planned Principal Payment

Total Payment Ending Balance

March 7 $6,000April 7 $0 $950 $950.00 5,050May 7 29.46 255 284.46 4,795June 7 27.97 255 282.97 4,540July 7 255Aug 7 950Sept 7 255Oct 7 255Nov 7 255Dec 7 950Jan 7 255Feb 7 255Mar 7 255Apr 7 $0Total $6,000

Under this plan,12. The total credit card price of the boat is $_________________________.

13. The total finance charges are $___________________________.

14. The total credit card price is _______________% greater, to the nearest tenth of a

percent, than the cash price.

15. Considering the Easton’s situation, which credit choice would you advise them to make? Why?


Unit 6, General Assessments, Test with Answers

Name________________________________________________Date_______________

Jan and Fred Easton have been shopping for a boat and outboard motor for use on a nearby lake during warm weather. They have shopped very carefully for the boat for several months and believe that they have picked the right boat and motor combination and the right dealer for their needs. The cash price they have bargained for the used boat they want is $6,000. This price includes a used trailer.

The Eastons also shopped around carefully to find the best deal for borrowing the amount of money they will need to buy the boat. They have identified three sources for the funds they need: the boat dealer, their credit union, and a special low-interest rate credit card. The information they have gathered about each loan is presented below. Answer the questions about each loan offer.

I. The boat dealer’s deal: The boat dealer, Water-Craft Sales, Inc., has offered the Eastons these installment plan terms: 10% down payment and the remainder to be paid in 24 payments of $261 each. Under this plan,

16. The amount financed is $________5,400________

17. The installment price of the boat is $__________6,264_________

18. The total finance charge is $_________864____________

19. The total installment plan price of the boat is _____14.4_____% greater than the cash price.

20. Using the table below, the annual percentage rate for the dealer’s offer is ___14.75___%.

No. of payments

Annual Percentage Rate14.00 14.25 14.50 14.75 15.00 15.25 15.50 15.75 16.00 17.00 18.00

(Finance Charge per $100 of Amount Financed)6 4.12 4.20 4.27 4.35 4.42 4.49 4.57 4.64 4.72 5.02 5.3212 7.74 7.89 8.03 8.17 8.31 8.45 8.59 8.74 8.88 9.45 10.0218 11.45 11.66 11.87 12.08 12.29 12.50 12.72 12.93 13.14 13.99 14.8520 12.70 12.93 13.17 13.41 13.64 13.88 14.11 14.35 14.59 15.54 16.4924 15.23 15.51 15.80 16.08 16.37 16.65 16.94 17.22 17.51 18.66 19.8230 19.10 19.45 19.81 20.17 20.54 20.90 21.26 21.62 21.99 23.45 24.9236 23.04 23.48 23.92 24.35 24.80 25.24 25.68 26.12 26.57 28.35 30.15

II. The Credit Union’s Deal: The Carlton Credit Union has offered the Eastons these terms: A $6,000, two-year loan with interest on the unpaid balance at the monthly rate of 1.25%. They are to make monthly payments of $250 on the principal along with interest for the month. The Eastons must also sign a promissory note for the loan and pledge the boat, motor, and trailer as collateral.



21. Complete the monthly payment schedule below.

Carlton Credit UnionRepayment Schedule forJanice and Fred Easton

PaymentNumber

UnpaidBalance

Payment onPrincipal

MonthlyInterest Total Payment

1 $6,000 250 $75.00 $350.002 5,750 250 71.88 321.883 5,500 250 68.75 318.754 5,250 250 65.63 315.635 5,000 250 62.50 312.506 4,750 250 59.38 309.387 4,500 250 56.25 306.258 4,250 250 53.13 303.139 4,000 250 50.00 300.0010 3,750 250 46.88 296.8811 3,500 250 43.75 293.7512 3,250 250 40.63 290.6313 3,000 250 37.50 287.5014 2,750 250 34.38 284.3815 2,500 250 31.25 281.2516 2,250 250 28.13 278.1317 2,000 250 25.00 275.0018 1,750 250 21.88 271.8819 1,500 250 18.75 268.7520 1,250 250 15.63 265.6321 1,000 250 12.50 262.5022 750 250 9.38 259.3823 500 250 6.25 256.2524 250 250 3.13 253.13

Totals $6,000 937.56 6,937.56

Under this plan,

22. The total price of the boat is $__________6,937.56___________

23. The total finance charges are $____________937.56__________

24. The total installment plan price of the boat is ____15.6______% greater, to the nearest

tenth of a percent, than the cash price.

25. The annual rate of interest charged is _________15__________%.



III. The Credit Card Option: The Eastons have just received a new credit card offer. They can charge up to $7,500 on any purchases. The card offers a 7% annual percentage rate until April 30, 20__. After that, an 18% annual percentage rate will be charged. Finance charges are based on the previous balance. If they buy the boat using the credit card, no down payment is required. The Eastons would not make any other purchases with the card until the boat and motor were paid off. Because Mrs. Easton receives quarterly checks from a devoted aunt, the Eastons know they can make the principal payments shown in the chart below. The first payment is due on April 7.

26. Complete the following chart showing the monthly finance charge, total payment, and new balance.

Date7% Annual Percentage

Rate

Planned Principal Payment

Total Payment Ending Balance

March 7 $6,000April 7 $0 $950 $950.00 5,050May 7 29.46 255 284.46 4,795June 7 27.97 255 282.97 4,540July 7 26.48 255 281.48 4,285Aug 7 25.00 950 975.00 3,335Sept 7 19.45 255 274.45 3,080Oct 7 17.97 255 272.97 2,825Nov 7 16.48 255 271.48 2,570Dec 7 14.99 950 964.99 1,620Jan 7 9.45 255 264.45 1,365Feb 7 7.96 255 262.96 1,110Mar 7 6.48 255 261.48 855Apr 7 4.99 855 859.99 $0Total 206.68 $6,000 6,206.68

Under this plan,27. The total credit card price of the boat is $________6,206.68________

28. The total finance charges are $_________206.68_____________

29. The total credit card price is _______3.4_____% greater, to the nearest tenth of a percent,

than the cash price.

30. Considering the Easton’s situation, which credit choice would you advise them to make? Why?

Answers will vary. The Credit Card option is cheapest, followed by the dealer’s offer, and the Credit Union’s offer is the most expensive.


Unit 6, Specific Assessments, Activity 3, Average Daily Balance

Many companies calculate the finance charge using the average-daily-balance method. The average daily balance is the average of the account balance at the end of each day of the billing period. New purchases posted during the billing period should be added as of the posting date. Payments received during the billing period should be subtracted as of the posting date. The finance charge is calculated by multiplying the periodic rate by the average daily balance.1.

Billing Periods Purchase Payment End-of-day

BalanceNumber of

Days

Sum of Daily

Balances4/01 – 4/10 $410.20

4/11 $150.004/12 – 4/20

4/21 $43.124/22 – 4/30

Totals

What is the average-daily-balance? ________________________________

If the annual interest rate is 18%, what is the finance charge? ____________________

2. Calculate the average daily balance, finance charge, and new balance as of July 1 using the average-daily-balance method. The periodic rate is 1.45%.

Date Transaction AmountJune 1 Balance $800.00June 11 Payment $200.00June 25 Purchase $150.00

3. A portion of an account statement for September is shown. The finance charge is computed using the average-daily-balance method. Find the average daily balance, the finance charge, and the new balance.

Reference Sold Posted Description Amount4833XF89 9/10 9/20 Corner Drug 19.86JJK98TRX 9/15 9/26 Swap Shoppe 96.72987PAY12 9/28 Payment – Thank You -50.000007619A 9/23 9/29 Babbit’s Plumbing Supply 19.43

Previous Balance: 169.38 Billing Period: 9/01 – 9/30Periodic Rate: 1.977% Average Daily Balance:Finance Charge: New Balance:


Unit 6, Specific Assessments, Activity 3, Average Daily Balance

4. Calculate the average daily balance and the finance charge for the statement below.


Billing Period: 3/14/08 – 4/13/08







+169.38+67.74+-50.00-++



Purchase:

24%

Cash Advance:

36%

Customer Service, call: 1-800-###-####


Average Daily Balance:_____________________________

Finance Charge: ___________________________________


Unit 6, Specific Assessments, Activity 3, Average Daily Balance with Answers

1.

Billing Periods Purchase Payment End-of-day

BalanceNumber of

Days

Sum of Daily

Balances4/01 – 4/10 $410.20 10 $4,102.00

4/11 $150.00 $260.20 1 $260.204/12 – 4/20 $260.20 9 $2,341.80

4/21 $43.12 $303.32 1 $303.324/22 – 4/30 $303.32 9 $2,729.88

Totals 30 $9,737.20

What is the average-daily-balance? ______________$324.57__________

If the annual interest rate is 18%, what is the finance charge? _______ $4.87_____

2. Calculate the average daily balance, finance charge, and new balance as of July 1 using the average-daily-balance method. The periodic rate is 1.45%.

Average Daily Balance: $698.39Finance Charge: $10.13New Balance: $760.13

3. A portion of an account statement for September is shown. The finance charge is computed using the average-daily-balance method. Find the average daily balance, the finance charge, and the new balance.

Reference Sold Posted Description Amount4833XF89 9/10 9/20 Corner Drug 19.86JJK98TRX 9/15 9/26 Swap Shoppe 96.72987PAY12 9/28 Payment – Thank You -50.000007619A 9/23 9/29 Babbit’s Plumbing Supply 19.43

Previous Balance: 169.38 Billing Period: 9/01 – 9/30Periodic Rate: 1.977% Average Daily Balance: $189.08Finance Charge: $3.74 New Balance: $259.13

Date Transaction Amount June 1 Balance $800.00June 11 Payment $200.00June 25 Purchase $150.00

Unit 6, Specific Assessments, Activity 3, Average Daily Balance with Answers

4. Calculate the average daily balance and the finance charge for the statement below.


Billing Period: 3/14/08 – 4/13/08







+169.38+67.74+-50.00-++



Purchase:

24%

Cash Advance:

36%

Customer Service, call: 1-800-###-####


Average Daily Balance:_______________$205.52________

Finance Charge: ______________$4.11_________________

Unit 6, Specific Assessments, Activity 9, Repayment Schedule Rubric

Repayment Schedule RubricCATEGORY 2 1 0

Table All 23 months of table are complete

Between 15 & 22 months of table complete

Less than 15 months complete

Calculations, months 5 through 22

All table calculations are correct

Many calculations are correct Few calculations are correct

Month 23 Monthly Payment, Amount for Interest, and Principal are correct

One or two items incorrect, but not all.

All items incorrect

Total Amount Paid & Total Interest Paid

Both correct One correct Neither correct

Above rubric adopted from: http://rubistar.4teachers.org/

http://rubistar.4teachers.org/

Unit 6, Specific Assessments, Activity 11, House Savings

Directions: Using the skills you have learned using a graphing calculator, answer the

following question. Your answer should list the key strokes required to solve the problem

and a written summary of the output screen.

You buy a house and finance $121,000 for 30 years at an interest rate of 7.2%. You are told that your payments would be $821.33 for the next 360 months. You find out that you have $25 extra each month that you can put on you house payment. If you pay an extra $25 a month, how long would it take you to pay off the house and how much interest would you save?

Key strokes:

Input screen:

Output screen:

Unit 6, Specific Assessments, Activity 11, House Savings

Key strokes:

Press APPS, highlight 1, press ENTER, highlight 1, press ENTER

Input screen:

Enter 0 (N=) press ENTEREnter 7.2 (I%=) press ENTEREnter 121000 (PV=) press ENTEREnter –846.33-25 (PMT=) press ENTEREnter 0 (FV=) press ENTEREnter 12 (P/Y=) press ENTERHighlight the 0 after N= press 2nd SOLVEClear home screenEnter 360 * 821.33 – 846.33 * 326.09 press ENTER(NOTE: This is the money you would save if you paid $25 extra per month.)

Output screen:

Unit 6, Specific Assessments, Activity 13, Reciprocal Teaching Rubric

Reciprocal Teaching Rubric

CATEGORY (25 - 22)High quality

(21-19)Above Average

(18-14)Average

(13-8)Below Average

Focus on the task

Consistently stays focused on the task and what needs to be done. Very self-directed.

Focuses on the task and what needs to be done most of the time. Other group members can count on this person.

Focuses on the task and what needs to be done some of the time. Other group members must sometimes nag, prod, and remind to keep this person on-task.

Rarely focuses on the task and what needs to be done. Lets others do the work.

Quality of Work Provides work of the highest quality.

Provides high quality work.

Provides work that occasionally needs to be checked/redone by other group members to ensure quality.

Provides work that usually needs to be checked/redone by others to ensure quality.

Focus on the task

Consistently stays focused on the task and what needs to be done. Very self-directed.

Focuses on the task and what needs to be done most of the time. Other group members can count on this person.

Focuses on the task and what needs to be done some of the time. Other group members must sometimes nag, prod, and remind to keep this person on-task.

Rarely focuses on the task and what needs to be done. Lets others do the work.

Time-management

Routinely uses time well throughout the project to ensure things get done on time. Group does not have to adjust deadlines or work responsibilities because of this person's procrastination.

Usually uses time well throughout the project, but may have procrastinated on one thing. Group does not have to adjust deadlines or work responsibilities because of this person's procrastination.

Tends to procrastinate, but always gets things done by the deadlines. Group does not have to adjust deadlines or work responsibilities because of this person's procrastination.

Rarely gets things done by the deadlines AND group has to adjust deadlines or work responsibilities because of this person's inadequate time management.

Rubric generated at: http://rubistar.4teachers.org/

http://rubistar.4teachers.org/

Unit 7, Activity 2, Dealer’s Cost Worksheet

Name:______________________________

Directions: For each problem given, complete a Dealer’s Cost Worksheet.1. List the MSRP of the:

a. auto base priceb. all options individually

2. Record the dealer’s cost percentage given in the problem onto the worksheet.3. Calculate the dealer’s cost of each item listed.4. Calculate the total dealer’s cost, dealer’s profit in dollars and as a percentage.

Dealer’s Cost Worksheet

Vehicle / Options MSRP Dealer’s Cost Percentage Dealer’s Cost

Total Dealer’s Cost

Dealer’s Profit if all Options Are Purchased

Percentage of Dealer Profit





Dealer’s Profit If All Options Are Purchased





Dealer’s Profit If All Options Are Purchased



Name_____________

Task:1. Use the monthly payment table below to complete each Automobile Rebate Worksheet.

Monthly Payment on a $100 Simple Interest Installment LoanTerm

in months

Annual Percentage Rate

8% 9% 10.5% 11.5% 12% 14% 15% 16% 17% 18% 24%

6 17.06 17.11 17.18 17.23 17.25 17.35 17.40 17.45 17.50 17.55 17.85

12 8.70 8.75 8.81 8.86 8.88 8.98 9.03 9.07 9.12 9.17 9.46

18 5.91 5.96 6.03 6.08 6.10 6.19 6.24 6.29 6.33 6.38 6.67

24 4.52 4.57 4.64 4.68 4.71 4.80 4.85 4.90 4.94 4.99 5.29

30 3.69 3.73 3.80 3.85 3.87 3.97 4.02 4.07 4.11 4.16 4.46

36 3.13 3.18 3.25 3.30 3.32 3.42 3.47 3.52 3.57 3.62 3.92

40 2.86 2.90 2.97 3.02 3.05 3.14 3.19 3.24 3.29 3.34 3.66

48 2.44 2.49 2.56 2.61 2.63 2.73 2.78 2.83 2.89 2.94 3.26

60 2.03 2.08 2.15 2.20 2.22 2.33 2.38 2.43 2.49 2.54 2.88

Automobile Rebate Worksheet #1Vehicle / Options MSRP Cost without rebate Cost with rebateBase price $21,060 Monthly Payment: Monthly Payment:Alarm system $500Larger wheels & tires

$945

Accent stripes $170 Total Amount Repaid:

Total Amount Repaid:Leather seats $895

Extended warranty $615Destination charge $465 Total Finance

Charge:Total Finance Charge:TOTAL MSRP: $24,650

Rebate: 2,000APR: 10.5% Term: 48 months

Total cost of car without rebate: Total cost of car with rebate: Actual savings with rebate applied: Percentage of savings with rebate applied:


Automobile Rebate Worksheet #2Vehicle / Options MSRP Cost without rebate Cost with rebateBase price $16,995 Monthly Payment: Monthly Payment:Alarm system -Larger wheels & tires

-

Accent stripes $150 Total Amount Repaid:

Total Amount Repaid:Leather seats -

Extended warranty $850Destination charge $478 Total Finance


Rebate: 1,500APR: 17% Term: 60 months


Automobile Rebate Worksheet #3Vehicle / Options MSRP Cost without rebate Cost with rebateBase price $39,445 Monthly Payment: Monthly Payment:Alarm system $200Larger wheels & tires

$1,100

Accent stripes - Total Amount Repaid:

Total Amount Repaid:Leather seats $1,300

Extended warranty Not offeredDestination charge $760 Total Finance


Rebate: 4,000APR: 8% Term: 60 months


Unit 7, Activity 3, Rebate Worksheet with Answers

Unit 8, Activity 3

Solutions.Automobile Rebate Worksheet #1

Cost without rebate Cost with rebateMonthly Payment:

$631.04

Monthly Payment:

$579.84Total Amount Repaid:$30,289.92

Total Amount Repaid:$27,832.32

Total Finance Charge:$5,639.92


Total cost of car without rebate: $30,289.92Total cost of car with rebate: $27,832.32Actual savings with rebate applied: $2,457.60Percentage of savings with rebate applied:8.1%

Automobile Rebate Worksheet #2Cost without rebate Cost with rebateMonthly Payment:

$459.98

Monthly Payment:






Automobile Rebate Worksheet #3Cost without rebate Cost with rebateMonthly Payment:

$868.94

Monthly Payment:






Unit 7, Activity 4, Used Auto Worksheet

Name:_______________________

National Automobile Dealer’s Association publishes a book that contains prices for used automobiles. The book has prices for two different categories for each vehicle: Average Retail Price and Average Trade-In Price. We will use the NADA website to complete this activity. http://www.nadaguides.com/default.aspx Choose: Used Car Prices

Task:Use a family vehicle with the actual mileage, condition and options of the vehicle. Complete the worksheet below for your vehicle.

Used Vehicle Pricing WorksheetVehicle

Mileage:

Clean Trade-In Clean Retail ValueOptions (List options present on vehicle.)

Total Price:

http://www.nadaguides.com/default.aspx

Unit 7, Activity 7, Spreadsheet Depreciation

Task:1. Create a spreadsheet, using Microsoft Excel®, to calculate the annual

depreciation of the automobile in the problem below. The spreadsheet should calculate the amount of depreciation and the resale value. Model your spreadsheet on the example below.

2. Create a chart of data and a graph of the year of ownership and the resale value.3. Save your chart and graph on a disk using your name as the file name. Print the

graph.4. Use the graph to predict in what year of ownership the vehicle will be worth

approximately $10,000.

Problem.

A new car bought for $38,240 is estimated to depreciate by the following percentages of the original cost during the first 10 years: 26, 21, 14, 10, 8, 7, 6, 5, 4, 3. How can these percents be used to form a spreadsheet and a graph to represent the resale value?

Example chart.

Example graph.

Year Percent of Depreciation

Amount of Depreciation Resale Value

0 $52,920 1 25% $9,560 $28,680 2 20% $5,736 $22,944 3 12% $2,753 $20,191 4 10% $2,019 $18,172 5 8% $1,454 $16,718 6 7% $1,170 $15,548 7 6% $933 $14,615 8 5% $731 $13,884 9 4% $555 $13,329 10 3% $400 $12,929

Depreciation

$0.00

$10,000.00

$20,000.00

$30,000.00

$40,000.00

$50,000.00

$60,000.00

1 2 3 4 5 6 7 8 9 10 11

Year of Ownership

Valu

e in

Dol

lars

Unit 7, Activity 7, Spreadsheet Depreciation with Answers

Year of Ownership Percent of Depreciation Amount of Depreciation Resale Value

0 $38,240.001 26% $9,942.40 $28,297.602 21% $5,942.50 $22,355.103 14% $3,129.71 $19,225.394 10% $1,922.54 $17,302.855 8% $1,384.23 $15,918.626 7% $1,114.30 $14,804.327 6% $888.26 $13,916.068 5% $695.80 $13,220.269 4% $528.81 $12,691.45

10 3% $380.74 $12,310.70

Estimated year when $10,000 value is reached: 12-13

Depreciation

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

1 2 3 4 5 6 7 8 9 10 11

Year of Ownership

Valu

e in

Dol

lars

Unit 7, Activity 7, Depreciation Story Chain

Task:1. This is a group activity, arrange into groups of three.2. Each group will create an automobile depreciation problem similar to the one

used in part one of this activity. However, the problem you create must be a linear depreciation problem. We discussed linear depreciation in activity 6.

3. In this story chain one member will begin writing a linear depreciation problem, the second member will add information and the third will complete the problem, as in this example.

Linear Depreciation ExampleStudent 1: Buddy’s new car cost $45,603. He expects to keep the car 10 years.

Student 2: He estimates the car will depreciate linearly by 9.5% of the original cost during each of the first 10 years.

Student 3: Make both a table and a graph showing the resale value of the car over the ten years Buddy expects to keep it.

4. When the group’s problem is complete, bring it to me to read and approve.5. Produce a spreadsheet for the linear depreciation problem you created using

Microsoft Excel® with graph.6. Print the graph.7. Turn-in your problem and graph.

Linear Depreciation ProblemStudent 1:

Student 2:

Student 3:

Unit 7, Activity 9, Buying/Leasing Opinionnaire

Name:_____________________________________

Directions: Read each statement carefully and decide whether you agree or disagree with it, placing a check mark in the appropriate Before column.

When we have finished with the presentation, decide whether your anticipations need to be changed by placing a check mark in the appropriate After column.

Before AfterAgree Disagree Agree Disagree

1. Leasing is a great way to get into my first car.

2. “Up-front” costs for leasing are less than for buying.

3. I should lease only if I plan to keep the vehicle a long time.

4. Monthly payments are less if I lease the vehicle.

5. If I drive a lot, I’m better off just buying the vehicle in the

beginning.

Unit 7, Activity 9, Buying Vs Leasing Notes

Task:1. There are key differences in buying and leasing an automobile.2. Use this page to take notes as I cover the PowerPoint® “Keys To Leasing”.

Buying vs. Leasing an AutomobileDifference Buying Leasing

Ownership

Up-front costs

Monthly payments

Early termination

Vehicle return

Future value

Mileage

Excessive wear

End of term

Unit 7, Activity 9, Buying Vs Leasing Notes with Answers

Buying vs. Leasing an AutomobileDifference Buying Leasing

Ownership You own the vehicle and get to keep it at the end of the financing term.

You do not own the vehicle, and must return it at the end of the lease, or buy it.

Up-front costs Include down payment, taxes, registration & other fees.

Include first months payment, security deposit, down payment, taxes, registration and other fees.

Monthly payments Loan payments are usually higher because you are paying for the entire price of the vehicle during the term of the loan.

Lease payments are usually lower because you are paying only for the vehicle’s depreciation during the lease term.

Early termination Can be terminated early by paying-off the loan early or by trading-in the vehicle for another vehicle.

Often penalties are assessed for early lease termination.

Vehicle return N/A Vehicle must be maintained in accordance with manufacturers requirement. Vehicle may not have modifications such as new wheels and tires or aftermarket stereo.

Future value Market determined Often determined as an educated guess at the time of lease; this is called residual value.

Mileage Unlimited; no restrictions Leases commonly set mileage limits and empose penalties for excess mileage at time of lease termination.

Excessive wear No restrictions Vehicle must be maintained in accordance with manufacturers requirements. There are penalties for excessive wear and/or vehicle damage of any form.

End of term You own the vehicle. You do not own the vehicle. Often you may purchase a leased vehicle at the end of the lease contract for the predetermined residual value.

Unit 7, Activity 10, Rental Cost Worksheet

Rental Cost WorksheetSize of vehicle: Daily rate:

$Weekly rate:$

Mileage charge:$

Gasoline cost per gallon:$

Insurance fees:$

Days rented: Weeks rented: Miles driven:

Total rental fee:$

Total mileage charge:$

Total gasoline cost:$

Total cost of renting the vehicle: Add: insurance fees, total rental fee, total mileage charge & total gasoline cost.Total cost of renting the vehicle:

$

Rental Cost WorksheetSize of vehicle: Daily rate:

$Weekly rate:$

Mileage charge:$

Gasoline cost per gallon:$

Insurance fees:$

Days rented: Weeks rented: Miles driven:

Total rental fee:$

Total mileage charge:$

Total gasoline cost:$

Total cost of renting the vehicle: Add: insurance fees, total rental fee, total mileage charge & total gasoline cost.Total cost of renting the vehicle:

$

Unit 7, Activity 11, Louisiana Liability Minimum

Task:

Organize your interview notes (3x5 cards) into a series of small, 8 ½” by 11” poster-like illustrations to represent the questions and answers from the interview. This series of small posters would resemble a PowerPoint presentation, but is done by hand. You may include any pamphlets that the agent may have given you.

FYI

Fifty-four percent of motor vehicle crash deaths among teenagers in 2005 occurred on Friday, Saturday, or Sunday.

Half of teenage motor vehicle crash deaths in 2005 occurred between 3pm and midnight.

Source: Insurance Institute for Highway Safety

Unit 7, Activity 12, Gasoline Reciprocal Teaching Record

Introduction to How Gas Prices WorkPredictions:

Questions:

Clarifications:

Summary:


Details:


Breakdown of Gas PricesPredictions:

Questions:

Clarifications:

Summary:


Details:


Gas Prices Across the CountryPredictions:

Questions:

Clarifications:

Summary:


Details:


OPEC and Gas Prices Around the WorldPredictions:

Questions:

Clarifications:

Summary:


Details:

Cause and Effect


Predictions:

Questions:

Clarifications:

Summary:


Details:


Domestic SuppliesPredictions:

Questions:

Clarifications:

Summary:


Details:


Arctic National Wildlife RefugePredictions:

Questions:

Clarifications:

Summary:


Details:

Out of Gas


Predictions:

Questions:

Clarifications:

Summary:


Details:

Unit 7, General Assessments, Transportation Jeopardy

Directions: Question the following answers you learned in this unit. Remember to phrase your answer in the form of a question.

Answer QuestionThe averaged fee for transporting all vehicles of a particular type to all dealerships.The words forming the acronym MSRP.

The price I would expect to receive for trading-in my used auto.

The vehicle operating costs that do not change from month-to-month.An example of a variable operating expense.

The name given to the decrease in value from year-to-year of my vehicle.The price I would advertise to sell a used vehicle.

Equations that perform calculations on values in your spreadsheet worksheet, starts with an equal sign (=).The type of lease that allows me the option to purchase the vehicle at the end of the lease contract.The predetermined value of an automobile in a lease contract.

Leads to vehicle ownership when the initial contract is paid.

The form of vehicle purchase that doesn’t allow me to modify my vehicle.The name given to using a vehicle on a short-term basis.

10/20/10.

The insurance coverage for property loss.

Because statistically they cause more accidents than females of the same age.The leading cause of death among 13-19-year-old males and females in the United States.The acronym for the Organization of the Petroleum Exporting Countries.Accounts for half of the price of gasoline at the pump.

The largest emergency petroleum supply in the world.

The typical time of year when demand for gas spikes.

Unit 7, General Assessments, Transportation Jeopardy with Answers

Answer QuestionThe averaged fee for transporting all vehicles of a particular type to all dealerships.

What is the destination charge?

The words forming the acronym MSRP. What is Manufacturer’s Suggested Retail Price?

The price I would expect to receive for trading-in my used auto. What is Clean Trade-In Value?

The vehicle operating costs that do not change from month-to-month.

What are fixed costs?

An example of a variable operating expense. What is gasoline cost?The name given to the decrease in value from year-to-year of my vehicle.

What is vehicle depreciation?

The price I would advertise to sell a used vehicle. What is Clean Retail Value?Equations that perform calculations on values in your spreadsheet worksheet, starts with an equal sign (=).

What are formulas?

The type of lease that allows me the option to purchase the vehicle at the end of the lease contract.

What is an open-ended lease?

The predetermined value of an automobile in a lease contract. What is residual, or future, value?

Leads to vehicle ownership when the initial contract is paid. What is buying a vehicle?The form of vehicle purchase that doesn’t allow me to modify my vehicle.

What is leasing a vehicle?

The name given to using a vehicle on a short-term basis. What is renting a vehicle?10/20/10. What is the Louisiana

minimum liability insurance?The insurance coverage for property loss. What does the third number

represent?Because statistically they cause more accidents than females of the same age.

Why does insurance cost more for teenage males?

The leading cause of death among 13-19-year-old males and females in the United States.

What is motor vehicle accidents?

The acronym for the Organization of the Petroleum Exporting Countries.

What is OPEC?

Accounts for half of the price of gasoline at the pump. What is the cost of crude oil?The largest emergency petroleum supply in the world. What is the Strategic

Petroleum Reserve?The typical time of year when demand for gas spikes. What is summer?

Unit 7, General Assessments, Car Purchase Essay Rubric

Car Purchase Essay

Name: ________________________ Teacher: Date Submitted: ____________ Title of Work: ___________________ Criteria Points

1 2 3 4

OrganizationSequence of

information is difficult to follow.

Reader has difficulty following work because student jumps around.

Student presents information in

logical sequence which reader can

follow.

Information in logical, interesting

sequence which reader can follow.

____

Content Knowledge

Student does not have grasp of information; student cannot answer

questions about subject.

Student is uncomfortable with content and is able

to demonstrate basic concepts.

Student is at ease with content, but fails to elaborate.

Student demonstrates full knowledge (more

than required).

____

Grammar and Spelling

Work has four or more spelling errors and/or grammatical errors.

Presentation has three misspellings

and/or grammatical errors.

Presentation has no more than two

misspellings and/or grammatical errors.

Presentation has no misspellings or

grammatical errors.____

Neatness Work is illegible.Work has three or four areas that are

sloppy.

Work has one or two areas that are

sloppy.

Work is neatly done. ____

References Work displays no references.

Work does not have the appropriate

number of required references.

Reference section was completed

incorrectly.

Work displays the correct number of references, written

correctly.

____

Total----> ____

Teacher Comments:Comments:


Unit 7, General Assessments, Quiz

1. J.J. Johnson plans to buy a Bentley Continental GT sedan with a MSRP of $178,236.17. The optional features JJ is considering and their suggested prices follow: GPS alarm system, $2,200; 22” chrome wheels with run-flat tires, $5,785 and extended warranty, $3,128. What is the MSRP of JJ’s Bentley if the destination charge is $2,008?

2. Giancarlo Valenti bought a beautiful yellow Lamborghini Mercielago with an MSRP of $328,150. A sales tax of 8.387% will be charged on the total purchase. Registration and license costs will be $359. Giancarlo plans to make an 11% down payment. (Assume the down payment is made before taxes.)

a. What is the delivered price of the car?b. What is the balance due on this purchase?

3. Ralf Emmerson bought a new Corvette for $43,567. He drove the car for three years and then traded it in on a new Vette for $29,995.

a. The total depreciation for the three-year period was? $____________________

b. The average annual depreciation was? $__________________________

c. The rate of depreciation was? ______________________________%

4. Rebecca Renee Roberts-Reynolds paid $123,195 for her Mercedes-Benz S500 AMG sedan. Her expenses for the first year were: gas, $5,193.14; oil, $101.19; insurance, $1,951.02; repairs and upkeep, $122.70; license plates, $48; loss of interest at $2,338.23 on the car’s original cost; and depreciation estimated at 14%.

a. The annual depreciation was? $_______________________

b. The total car operating expense for the year was? $_____________________

Type of Insurance Coverage Coverage Limits

Vehicle Used For

Driving to Work Racing on the Weekends

Touring Europe on Holiday

Bodily Injury $25/$75,000 19.94 122.93 41.92$200/$300,000 78.93 404.99 128.92

Property Damage $15,000 99.12 235.19 165.22$35,000 127.56 414.00 196.99

Collision No deductible 359.84 1,234.91 807.68$1,000 deductible 19.98 1001.19 345.71

Comprehensive $100 deductible 130.92 312.38 147.17$250 deductible 103.52 289.63 126.84

5. Use table above to find the annual premium for each below.a. For driving to work, $25/$75,000 bodily injury, $35,000 property damage, no

deductible on collision and $100 deductible on comprehensive. __________________

b. For touring Europe on Holiday, $200/$300,000 bodily injury, $35,000 property damage, $1,000 deductible collision and $100 deductible comprehensive. ___________

Unit 7, General Assessments, Quiz with Answers

1. $191,357.17

2. a. $356,061.05

b. $319,925.06

3. a. $13,572

b. $4,524

c. 10.4%

4. a. $17,247.30

b. $27,001.58

5. a. $637.86

b. $818.79

Unit 7, Specific Assessments, Activity 6, TVM Master

Directions: Use a graphing calculator to answer the questions below.

Latisha is buying a car from a dealer that offers a $1500 rebate that can be taken either in cash or used toward the down payment. The total cost of the car including taxes is $21,850, and since she is putting 15% down, they are financing it at 7.9% interest for 60 months. Use the Finance Mode and TVM to determine:

1. Her monthly payments2. Her total interest3. How much her monthly payments would be if she added the rebate to her down payment.4. Her total interest if she added the rebate to her down payment5. How much additional savings she would get by adding her rebate to the down payment.

Unit 7, Specific Assessments, Activity 6, TVM Master with Answers

1. Her monthly payments. $441.992. Her total interest. $4,669.723. Her monthly payments would be if she added the rebate to her down payment. $411.654. Her total interest if she added the rebate to her down payment. $4,349.135. How much additional savings would she get by adding her rebate to the down payment?

$320.59

Unit 7, Specific Assessments, Activity 7, Depreciation Analysis

Directions: Analyze the line graphs and estimate the answer for the accompanying questions.

Use the graph above to answer question 1 – 3.1. After how many years has the car lost all its value?

2. After how many years has the car lost half its value?

3. What is the approximate value of the car after 5 years?


Use the graph at right to answer questions 4 – 6.

4. In which year of its life does

the car lose the most value?

5. After about how many years

has the car lost half its value?

6. What is the car’s

approximate value after 4

years?

Use the graph at left to answer questions 7 – 9.

7. During which year does the

car lose the most value?

8. After about how many years

has the car lost half its value?

9. When is the automobile

worth $19,000?

10. Which graph would you surmise represents typical automobile depreciation? Explain your answer.


Test Solution.

1. About 7 years.

2. About 3.5 years.

3. About $9,000.

4. During the first year of ownership.

5. About 2 years.

6. About $6,000.

7. During the third year of ownership.

8. About 3 years.

9. Approximately the beginning of the second year of ownership.

10. Student answers will vary. The second graph, because I have learned that automobiles

depreciate more rapidly at the beginning of their useable life than later in their useable

life. This is why automobile value can be found in the purchasing of late model used

vehicles.

Unit 7, Specific Assessments, Activity 11, Insurance Posters Rubric

Element PossiblePoints

Earned Assessment

Peer Teacher

The main theme is clear when one first looks at the posters. A title helps to identify the theme.

Appropriate and accurate main ideas support the theme.

There is wholeness about the posters. They do not seem like acollection of information.

The information in the posters is accurate and shows that the student thoroughly understands the concepts.

Space, shapes, textures, and colors provide information themselves and add to the over-all effectiveness of the posters.

Pictures, photographs, drawings, diagrams, graphs, or other similar devices add to the over-all effectiveness of the posters.

The format of the posters is appropriate to the task and to the audiencefor which it is intended.

The posters accomplish their purpose with their intended audience.

The posters are very neat and presentable.

The posters are creative and interesting.

Total:

After the posters are all hung on the walls of the classroom, ask the students to assess three poster sets from other students. Average the peer assessments onto the one rubric sheet where the teacher assesses the poster set. The student component of the grading should be no more than 25% of the overall grade for this activity.

Unit 8, Activity 1, Mortgage Loan Table

Monthly Payment for a $1000 Mortgage LoanInterest

RateLength of Loan in Years

10 15 20 25 305% 10.61 7.91 6.60 5.85 5.37

5.5% 10.85 8.17 6.88 6.14 5.686% 11.10 8.44 7.16 6.44 6.00

6.5% 11.35 8.71 7.46 6.75 6.327% 11.61 8.99 7.75 7.07 6.65

7.5% 11.87 9.27 8.06 7.39 6.998% 12.13 9.56 8.36 7.72 7.34

8.5% 12.40 9.85 8.68 8.05 7.699% 12.67 10.14 9.00 8.39 8.05

9.5% 12.94 10.44 9.32 8.74 8.4110% 13.22 10.75 9.65 9.09 8.78

Unit 8, Activity 3, Information About RESPA

The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. The purposes of RESPA are:

1. to help consumers become better shoppers for settlement services.2. to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain

settlement services.

Details about RESPA

Corresponding with the above purposes:1. RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices, and describe business relationships between settlement service providers.

2. RESPA also prohibits certain practices that increase the cost of settlement services. Section 8 of RESPA prohibits a person from giving or accepting any thing of value for referrals of settlement service business related to a federally related mortgage loan. It also prohibits a person from giving or accepting any part of a charge for services that are not performed. Section 9 of RESPA prohibits home sellers from requiring home buyers to purchase title insurance from a particular company.

RESPA in general

RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. These include most purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit. HUD's Office of RESPA and Interstate Land Sales is responsible for enforcing RESPA.

RESPA required disclosures:

At the time of loan application

When borrowers apply for a mortgage loan, mortgage brokers and/or lenders must give the borrowers:

a Special Information Booklet, which contains consumer information regarding various real estate settlement services. (Required for purchase transactions only).

a Good Faith Estimate (GFE) of settlement costs, which lists the charges the buyer is likely to pay at settlement. This is only an estimate and the actual charges may differ. If a lender requires the borrower to use a particular settlement provider, then the lender must disclose this requirement on the GFE.


a Mortgage Servicing Disclosure Statement, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. It also provides information about complaint resolution.

If the borrowers don't get these documents at the time of application, the lender must mail them within three business days of receiving the loan application.If the lender turns down the loan within three days, however, then RESPA does not require the lender to provide these documents.

The RESPA statute does not provide an explicit penalty for the failure to provide the Special Information Booklet, Good Faith Estimate or Mortgage Servicing Statement. However, bank regulators may choose to impose penalties on lenders who fail to comply with federal law. Please read the section on RESPA enforcement for more information.

Disclosures before settlement/closing occurs

The terms "settlement" and "closing" can be and are used interchangeably.An Affiliated Business Arrangement (AfBA) Disclosure is required whenever a settlement service provider involved in a RESPA covered transaction refers the consumer to a provider with whom the referring party has an ownership or other beneficial interest.

The referring party must give the AfBA disclosure to the consumer at or prior to the time of referral. The disclosure must describe the business arrangement that exists between the two providers and give the borrower an estimate of the second provider's charges.

Except in cases where a lender refers a borrower to an attorney, credit reporting agency or real estate appraiser to represent the lender's interest in the transaction, the referring party may not require the consumer to use the particular provider being referred.

The HUD-1 Settlement Statement is a standard form that clearly shows all charges imposed on borrowers and sellers in connection with the settlement. RESPA allows the borrower to request to see the HUD-1 Settlement Statement one day before the actual settlement. The settlement agent must then provide the borrowers with a completed HUD-1 Settlement Statement based on information known to the agent at that time.

Disclosures at settlement

The HUD-1 Settlement Statement shows the actual settlement costs of the loan transaction. Separate forms may be prepared for the borrower and the seller. Where it is not the practice that the borrower and the seller both attend the settlement, the HUD-1 should be mailed or delivered as soon as practicable after settlement.

The Initial Escrow Statement itemizes the estimated taxes, insurance premiums and other charges anticipated to be paid from the Escrow Account during the first twelve months of the loan. It lists the Escrow payment amount and any required cushion. Although the statement is usually given at settlement, the lender has 45 days from settlement to deliver it.


Disclosures after settlement

Loan servicers must deliver to borrowers an Annual Escrow Statement once a year. The annual Escrow account statement summarizes all escrow account deposits and payments during the servicer's twelve month computation year. It also notifies the borrower of any shortages or surpluses in the account and advises the borrower about the course of action being taken.

A Servicing Transfer Statement is required if the loan servicer sells or assigns the servicing rights to a borrower's loan to another loan servicer. Generally, the loan servicer must notify the borrower 15 days before the effective date of the loan transfer. As long the borrower makes a timely payment to the old servicer within 60 days of the loan transfer, the borrower cannot be penalized. The notice must include the name and address of the new servicer, toll-free telephone numbers, and the date the new servicer will begin accepting payments.

RESPA Explained: Consumer Protections and Prohibited Practices

Section 8: kickbacks, fee-splitting, unearned fees

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or any thing of value in exchange for referrals of settlement service business involving a federally related mortgage loan. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed.

Violations of Section 8's anti-kickback, referral fees and unearned fees provisions of RESPA are subject to criminal and civil penalties. In a criminal case a person who violates Section 8 may be fined up to $10,000 and imprisoned up to one year. In a private law suit a person who violates Section 8 may be liable to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service.

Section 9: Seller required title insurance

Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance.

Section 10: Limits on escrow accounts

Section 10 of RESPA sets limits on the amounts that a lender may require a borrower to put into an escrow account for purposes of paying taxes, hazard insurance and other charges related to the property. RESPA does not require lenders to impose an escrow account on borrowers; however, certain government loan programs or lenders may require escrow accounts as a condition of the loan.


During the course of the loan, RESPA prohibits a lender from charging excessive amounts for the escrow account. Each month the lender may require a borrower to pay into the escrow account no more than 1/12 of the total of all disbursements payable during the year, plus an amount necessary to pay for any shortage in the account. In addition, the lender may require a cushion, not to exceed an amount equal to 1/6 of the total disbursements for the year.The lender must perform an escrow account analysis once during the year and notify borrowers of any shortage. Any excess of $50 or more must be returned to the borrower.

RESPA Enforcement

Civil law suits Individuals have one (1) year to bring a private law suit to enforce violations of Section 8 or 9. A person may bring an action for violations of Section 6 within three years. Lawsuits for violations of Section 6, 8, or 9 may be brought in any federal district court in the district in which the property is located or where the violation is alleged to have occurred.

HUD, a State Attorney General or State insurance commissioner may bring an injunctive action to enforce violations of Section 6, 8 or 9 of RESPA within three (3) years.

Loan servicing complaints

Section 6 provides borrowers with important consumer protections relating to the servicing of their loans. Under Section 6 of RESPA, borrowers who have a problem with the servicing of their loan (including escrow account questions), should contact their loan servicer in writing, outlining the nature of their complaint. The servicer must acknowledge the complaint in writing within 20 business days of receipt of the complaint. Within 60 business days the servicer must resolve the complaint by correcting the account or giving a statement of the reasons for its position. Until the complaint is resolved, borrowers should continue to make the servicer's required payment.

A borrower may bring a private law suit, or a group of borrowers may bring a class action suit, within three years, against a servicer who fails to comply with Section 6's provisions. Borrowers may obtain actual damages, as well as additional damages if there is a pattern of noncompliance.

Other enforcement actions

Under Section 10, HUD has authority to impose a civil penalty on loan servicers who do not submit initial or annual escrow account statements to borrowers. Borrowers should contact HUD's Office of RESPA and Interstate Land Sales to report servicers who fail to provide the required escrow account statements.

Filing a RESPA complaint


Persons, who believe a settlement service provider has violated RESPA in an area in which the Department has enforcement authority (primarily sections 6, 8 and 9), may wish to file a complaint. The complaint should outline the violation and identify the violators by name, address and phone number. Complainants should also provide their names and phone numbers for follow up questions from HUD. Requests for confidentiality will be honored. Complaints should be sent to:

Director, Office of RESPA and Interstate Land SalesUS Department of Housing and Urban DevelopmentRoom 9154451 7th Street, SWWashington, DC 20410

Adopted from:U.S. Department of Housing and Urban Development451 7th Street, S.W., Washington, DC 20410Telephone: (202) 708-1112

Unit 8, Activity 3, RESPA Notes

When did RESPA become law?

What are its purposes?

What does RESPA cover, in general?

What are the required disclosures to the home buyer?

What does RESPA have to do with closing costs?

What is an Initial Escrow Statement & what does it do for the homebuyer?

Unit 8, Activity 3, RESPA Notes

List and explain section 8 of RESPA.



List and explain legal recourses of the disgruntled buyer.

List the complaint contact address at HUD.

Unit 8, Activity 5, Other Housing Costs

Task:1. This is a group activity, arrange into groups of three or four each. 2. As a group, discuss housing costs beyond mortgage or rent payments. 3. Use the concept map below to record responses.4. Each circle should have a response.5. We will discuss the concept maps after all groups are complete.

.

.

.

.

.

.

.

.

Other Housing

Costs

Unit 8, Activity 5, Other Housing Costs with Answers

A completed concept map may look like this. Student answers will vary.

Maintenance

$75

Internet Connection

$30

Cable TV

$70Telephone

$48

Natural Gas

$32

Electricity

$112

Water & Sewage

$45

Insurance

$88

Other Housing

Costs

Unit 8, Activity 7, Homeowners Insurance

Task:1. Research homeowners insurance to answer:

1. What is homeowners insurance?2. What is in a standard homeowners insurance policy?3. Are there different types of policies?4. Does my homeowners insurance cover flooding?5. What type of disasters are covered?6. Can I own a home without homeowners insurance?7. Can I get insurance if I rent my home?8. How much homeowners insurance do I need?9. Do I need separate coverage for jewelry? 10. What factors do insurance companies use to determine the price of your policy?

2. Provide a comprehensive answer to these questions, not just one-sentence answers. 3. Produce a paper, in the form of an outline, containing the answers to the questions. 4. The papers must contain at least one chart or graph.5. The papers must be typed.6. Use the web address http://www.iii.org/individuals/homei/ as the primary source.7. The outline should follow the format below.

I. What is homeowners insurance?a.b.c.

II. What is in a standard homeowners insurance policy?a.b.c.

III. Are there different types of policies?a.b.c.

IV. Does my homeowners insurance cover flooding?(Continue in the same manner.)

http://www.iii.org/individuals/homei/

Unit 8, Activity 8, Rent Or Buy?

Should I buy or rent a home or apartment?

Top 10 Reasons to Buy a Home

1. It will be Yours and Yours Alone

The freedom of owning your own home cannot begin to compare with the restrictions that renters experience. You can paint the walls the color you like, hammer a nail without the hassles from a landlord.

2. Lifestyle

Homeowners are a different breed. When you live in a neighborhood that is owner occupied, your neighbors, like you, are more willing to invest their time, money, and efforts to improve their property values and community.

3. Equity Buildup

Rental payments are gone once you have made them. But with each mortgage payment, you are “buying” something tangible, you are building equity. The longer you own your home, the larger the equity. At any time you can refinance to "withdraw" your cash equity.

4. Keep Up with Inflation

A home is an investment that helps you keep up with inflation. Although not all homes appreciate at the same rate, and some years are better than others, real estate has historically kept pace with and usually appreciated faster than the rate of inflation.

5. Income Tax Benefits

All interest paid on a mortgage is deductible for income tax purposes. Remember, too, that property taxes and closing points are deductible, and that special tax deductions such as the Homestead Exemption and Energy Credits are also available to homeowners.

6. Payback on Improvements

A renter who makes property improvements does not receive financial benefits from them if they relocate. As a homeowner, you can realize some or all of the costs of improvements when you sell your home.

7. Trade-Up Value

Even if your first home is not your “dream home,” you are working your way up to it.


With appreciation and some improvements, it may provide you with enough equity to make a down payment on your “Dream Home” later.

8. Future Security

Unlike rent, which goes on forever, mortgage payments are temporary, providing you with “rent free” living for your retirement. In addition, a mortgage payment with a fixed interest rate will remain constant over the course of the note. Rental prices typically increase 3-10% per year in many areas.

9. Investment Property

For some, investments in single-family homes are proving to be good tax shelters. You can realize profits and tax benefits from having renters who do not know the benefits of owning a home or investment property.

10. Don’t Let The Mortgage Interest Rate Fool You

You pay much less in interest than the mortgage rate of your loan, because the interest you pay becomes tax deductible. Also deductible are many costs associated with closing your loan.

Do You Know How Much Rent You Pay?

Monthly Rent 3 Years 5 Years 10 Years 15 Years 30 Years

$400 $15,431 $27,603 $66,319 $120,619 $453,412

$500 $19,289 $34,504 $82,899 $150,774 $566,765

$600 $23,147 $41,405 $99,478 $180,929 $680,118

$700 $27,005 $48,306 $116,058 $211,084 $793,471

$800 $30,863 $55,207 $132,638 $241,239 $908,823

$900 $34,720 $62,108 $149,218 $271,393 $1,020,176

$1000 $38,578 $69,008 $165,798 $301,548 $1,133,530

$1500 $57,868 $103,513 $248,696 $452,332 $1,700,294


Assuming only a 7% annual Rent Increase

Should You Rent or Own? Rent Own

Deduct mortgage interest and closing points in calculating income tax? No Yes

Deduct real estate taxes in calculating income tax? No Yes

Build Equity (Savings)? No Yes

Hedge against inflation (appreciation and profit potential)? No Yes

Improvements within the home become an investment in future value? No Yes

Can lease out or sell whenever you want to move? No Yes

Feeling of financial security? No Yes

Property can be put in trust? No Yes

Property can be passed on to heirs? No Yes

Property can be later refinanced to "withdraw" cash equity? No Yes

Fixed mortgage payments that help stabilize monthly living costs? No Yes

Source:The Mortgage Doctor5579 South Lewis Avenue Tulsa Oklahoma 74105Phone 918-746-0700http://www.docmortgage.com/htm/Ownership%20vs.%20Rent.htm

http://www.docmortgage.com/htm/Ownership%20vs.%20Rent.htm

Unit 8, Activity 9, How Much Can You Afford?

Task:1. Find, in the newspaper, a real estate listing for a home that you would someday

like to own, clip it out, and bring it to class.2. Go to: http://www.ginniemae.gov/2_prequal/intro_questions.asp?

Section=YPTH3. Use the “How Much Home Can You Afford?” Calculator and your chosen

career’s estimated annual income. Refer to the Career Exploration BLM completed in Unit 5, Activity 9, to calculate how much of a mortgage payment you will be able to afford.

4. Use these numbers as inputs:a. Minimum Credit Card Payment: $900

b. Car Payment: $800

c. Other Monthly Obligations: $2000

5. Click “Get Estimate” and print the report.

6. Glue your dream-home listing to the upper-back of the report.

7. Below your listing, answer the question, “Can you afford it?”a. Could you afford the house you chose?b. Why did you choose this house?c. What concessions could you make to modify (lower) your housing wants?

8. Turn-in the report.

http://www.ginniemae.gov/2_prequal/intro_questions.asp?Section=YPTH

http://www.ginniemae.gov/2_prequal/intro_questions.asp?Section=YPTH

Unit 8, General Assessments, Calculation Test

1. The Greenwalds want to buy a condominium priced at $90,000. They will need to make a down

payment of 20% and pay closing costs of 3% of the purchase price.

a. How much cash will they need for the down payment?

b. How much of the purchase price must they borrow?

c. How much cash will they need for the closing costs?

2. Ed and Roberta Rogers bought a house at its market value of $70,000. They made a 25% down

payment and paid these closing costs: legal fees, $280; property survey, $150; title insurance,

$220; inspection fees, $350; loan origination fees, $400.

a. What was the amount of the down payment?

b. What was the total of the closing costs?

c. What percent were the closing costs of the purchase price to the nearest whole percent?

3. Ann Doyle will purchase a house for $53,500 on August 1. The house was appraised at

$58,000. On that date, she must make a down payment of 15% of the purchase price and pay

these closing costs: loan origination fees, $340; termite inspection fee, $80; legal fees, $420;

land survey costs, $115; title insurance, $210; prepaid taxes, $600; points, $535.

a. What total amount of cash must Ann have on August 1 to make the purchase?

b. What percent are the closing costs of the purchase price, to the nearest tenth of a

percent?

4. Tom and Jane Yurko estimate that their home depreciates 2% each year. If the home originally

cost $75,300, how much do they estimate for depreciation this year?

5. The home of the Collins family is estimated to depreciate at a rate of 3.2% each year. If the

home originally cost $52,700, how much will this home depreciate in 1 year?

6. Artie Brouillard bought a condominium. The former owner originally wanted $85,000 for the

home before selling it to Artie for $74,900. If the annual depreciation is estimated at 2.5%, how

much will it depreciate this year?

7. Marie Santos bought a house for $55,200 ten years ago. If she estimates depreciation at 1.8% a

year, how much has the house depreciated so far?

8. Ezra Wilkins bought a mobile home for $32,000 three years ago. He estimates that the home

depreciates at a 5% rate each year. How much does Ezra estimate the mobile home has

depreciated so far?

9. The Kerns want to buy a home. Their estimated first-year expenses are: mortgage interest,

$7,128; property taxes, $1,800; insurance, $515; depreciation, $1,680; maintenance and repairs,

Unit 8, General Assessments, Calculation Test

$1,237. They estimate lost interest income on savings as $1,472. They also expect to save

$3,112 on income taxes. Find their net cost of owning their home the first year.

10. Kirk and Edna Rowe own a home. They estimate their expenses to be: mortgage interest,

$10,180; property taxes, $3,690; insurance, $833; depreciation, $3,800; maintenance and

repairs, $900; lost interest income, $2,375. They expect to save $5,700 on income taxes from

home expense. What is their net cost of home ownership?

11. The Solos want to buy a home that costs $55,000. They must make a 30% down payment. They

estimate their expenses for the first year to be: mortgage interest, $4,914; property taxes,

$1,208; insurance, $260; lost interest income, $1,320; depreciation, 2% of the purchase price;

maintenance and repairs, $1,050. They expect to save $1,280 in income taxes because of home

expenses. What will be the net cost of the home the first year?

12. Trudy Hertz wants to buy a home for $64,800. She estimates her first-year expenses to be:

mortgage interest,$6,005; lost interest of $1,377; property taxes, $850; insurance, $395;

depreciation at 2.5% of the purchase price; maintenance and repairs, $1,400. She expects to

save $1,847 in taxes. What will be the net cost of owning the home in the first year?

13. After being in effect for 4 years, the rate of interest on Sol Retal’s variable rate mortgage has

changed from 12.5% to 10%. Sol’s old monthly payment was $763.25. Sol’s new monthly

payment is $655.01. How much less does Sol pay in one year at the new mortgage rate?

14. Rita Metarel’s monthly payment on her original 11.75% variable rate mortgage is $656.12.

Eight years later, the interest rate on her mortgage has been raised to 13.25%, and her new

monthly payment is $731.74. How much more will Rita pay in one year at the new mortgage

rate?

15. Your old $45,000, 30-year, 13.6% mortgage has a monthly payment of $518.98. Over the 6

years since you took out the loan, mortgage rates have dropped. You can now get a mortgage at

9.15%, which will result in a new monthly payment of $377.37. To refinance, you must pay

$990 in closing costs and a $510 prepayment penalty. By getting a new mortgage, find the net

amount you will save in…

a. The first year.

b. The second year.

Unit 8, General Assessments, Calculation Test with Answers

1.a. $18,000

b. $72,000

c. $2,700

2.a. $17,500

b. $1,400

c. 2%

3.a. $10,325

b. 4.3%

4. $1,506

5. $1,686.40

6. $1,872.50

7. $9,936

8. $4,800

9. $10,720

10. $16,078

11. $8,572

12. $9,800

13. $1,298.88

14. $907.44

15.a. $199.32

b. $1,699.32

Unit 8, General Assessments, Writing Test

Respond to each statement as fully and completely as you can.

1. “I don’t need to shop around for a mortgage lender; I’ll never live in that house 30 years

anyway.”

2. “Why won’t the bank let me buy that $300,000 house? I could cut back in other places, if they

would only lend me the money.”

3. “I’ll buy the least amount of insurance I can. Nothing’s ever gonna happen anyway.”

4. “My parents have always rented; it’s good enough for me.”

Unit 8, General Assessments, Writing Test with Answers

Possible answers: Student answers will vary and should include concrete examples from this unit and possibly reference to knowledge gained in previous units.

1. Even though you may not plan to be in a house for the duration of the mortgage, money is still saved each month if you shop for and receive the best mortgage loan rate available to you.

2. The FHA has guidelines that total housing costs should not exceed 41% of your monthly net pay. Most people would not “cut back” on the lifestyle they are accustomed to leading for the length of time it takes to repay a mortgage loan.

3. Insurance is the assurance that all of the hard work that has gone into home ownership doesn’t go for naught. Insurance is also the umbrella that protects your financial plan from the unexpected “rainy day”. It provides shelter so you don’t loose assets already accumulated.

4. There are many advantages to home ownership: income tax benefits, a store of equity value, and a hedge against inflation among many more.

Unit 8, Specific Assessments, Activity 1, Graphing Calculator Solution

Directions: Use your prior knowledge of a graphing calculator to solve the following problem.You should use the Finance mode and TVM to calculate monthly payments and the future value of the college fund savings. Use the summation of interest to calculate the total interest paid on the home loan and total interest earned on the college fund savings.

Jack and Sarah are expecting their first child on August 1st. They have just bought a new house and will also move into the house on August 1st. The total amount of money financed is $135,000 for a period of 30 years at an interest rate of 6.9%. They want to start now saving for their child’s future by putting $200 per month in a college fund that will yield a return of 3.7% compounded monthly, and will be available on the child’s 18th birthday. A friend told them that the smartest thing they could do would be to add the $200 to their regular house payment and pay the mortgage off early. They could then use the house payment money to send their child to college and would save a lot of money. They were not sure if what the friend told them would be the best thing to do.

A) Calculate the monthly payments required for the mortgage repayment.

B) Calculate the total interest paid over 30 years.

C) Calculate the time it would take to pay off the mortgage if $200 was added to each month’s

payment.

D) Calculate the amount of interest saved.

E) Calculate the amount of money in the college account on the child’s 18th birthday.

F) Calculate the amount of interest earned.

G) State whether you believe they should open a separate college account for their child or

apply the $200 each month to the payment. Justify your answer based only on the financial

facts uncovered.

Unit 8, Specific Assessments, Activity 1, Graphing Calculator Solution with Answers

A. Calculate the monthly payments required for the mortgage repayment. Use the TVM to calculate monthly payments.

B. Calculate the total interest paid over 30 years. Use the Summation of the interest to calculate the total interest paid.

C. Calculate the time it would take to pay off the mortgage if $200 was added to each month’s payment. Use the TVM to calculate the number of payments with the extra $200 per month.

D. Calculate the amount of interest saved. Use the summation of interest to calculate the total interest paid.

Unit 8, Specific Assessments, Activity 1, Graphing Calculator Solution with Answers

E. Calculate the amount of money in the college account on the child’s 18th birthday.Use the TVM to calculate the future value if the $200 was deposited into the college account.

F. Calculate the amount of interest earned.Use the summation of interest to calculate the total interest earned.

G. State whether you believe they should open a separate college account for their child or apply the $200 each month to the payment. Justify your answer based only on the financial facts uncovered.

Clearly the $83,137.46 saved by paying an extra $200 per month on the mortgage exceeds the $18,061.16 earned on the college savings plan. The student should identify the savings and evaluate Jack and Sarah’s choices, including a decision.

Unit 8, Specific Assessments, Activity 2, Closing Cost

Closing Cost Expense WorksheetLoan Origination Fee 1% of the loan amount

Discount "Points" 4 points(1 "Point" = 1% of the loan amount)

Credit Report $55.00Appraisal Fee $400Underwriting $275Processing $300 Plat Drawing Inspection $60.00Parish Recording Fees $50.00Flood Certification $20.00Name and Assessment Searches $24.00ARM Title Insurance Endorsement Fee $50.00Mortgage Registration Tax $2.30 per $1,000 of the loan amountClosing Fee $250.00Miscellaneous Fees $350.00Prepaid Interim Interest 15 days

(Loan amount x interest rate = annual interest, divided by 12 months = monthly interest)

Homeowners Insurance Premium (1st year due in full)

The annual premium is computed by multiplying the purchase price by $4.00 per one thousand

Property Taxes(1st year due in full)

Rate of assessment: 45%Tax rate: 47.537 mills

Use the above Closing Cost Expense Worksheet to calculate the closing cost for a home selling for $185,000 with an annual interest rate of 7.10%.

Unit 8, Specific Assessments, Activity 2, Closing Cost with Answers

Use the above Closing Cost Expense Worksheet to calculate the closing cost for a home selling for $185,000 with an annual interest rate of 7.10%.

Closing Cost Expense Worksheet AnswersLoan Origination Fee 1% of the loan amount $1,850

Discount "Points" 4 points(1 "Point" = 1% of the loan amount)

$7,400

Credit Report $55.00 $55.00Appraisal Fee $400 $400.00Underwriting $275 $275.00Processing $300 $300.00Plat Drawing Inspection $60.00 $60.00

Parish Recording Fees $50.00 $50.00

Flood Certification $20.00 $20.00Name and Assessment Searches

$24.00 $24.00

ARM Title Insurance Endorsement Fee

$50.00 $50.00

Mortgage Registration Tax $2.30 per $1,000 of the loan amount $425.50

Closing Fee $250.00 $250.00Misc. Fee's $350.00 $350.00Prepaid Interim Interest

15 days(Loan amount x interest rate = annual interest, divided by 365 days = daily interest)

$539.79

Homeowners Insurance Premium

(1st year due in full)

The annual premium is computed by multiplying the purchase price by $4.00 per one thousand $740

Property Taxes(1st year due in full)

Rate of assessment: 45%Tax rate: 47.537 mills $3,957.46

Total $16,746.75

Unit 8, Specific Assessments, Activity 6, Rental Rubric

Performance: Completing a Rental Agreement

CATEGORY/Points

Format25% of grade

Capitalization and Punctuation25% of grade

Information and Knowledge50% of grade

4 Thorough completion of application including name, address, previous addresses, references

Demonstrates correct usage of end punctuation, commas, and capitalization, including abbreviations

Includes specific details of credit history and job contact information

3 A substantial amount of application is completed including name, address, and at least one other component

Demonstrates a substantial amount of knowledge of punctuation and capitalization (2-5 errors)

Has minor information missing on details of credit history and job contact information

2 Partial or incomplete application which shows only two components

Moderately effective use of punctuation and capitalization (6-10 errors)

Provides partial evidence of credit history and job contact information

1 Incomplete or serious misunderstanding of how to complete the application

Minimally effective use of capitalization and punctuation (11 or more errors)

Major amount of information missing and no history

Rubric generated at: http://rubistar.4teachers.org/index.php

http://rubistar.4teachers.org/index.php

Unit 8, Specific Assessments, Activity 8, Internet Research Rubric

Completing Internet ResearchCATEGORY 4 Points 3 Points 2 Points 1 Point

Locating Internet Website

Independently enters website address correctly and efficiently locates website

Independently enters website address correctly after self-correcting for errors and locates website

Asks for assistance from teacher or peer and then able to enter website address or to use browser

Despite repeated assistance unable to enter website address OR doesn't ask for assistance from teacher or peer

Navigating Website

Independently able to use mouse and browser efficiently to navigate the website

Independently able to use mouse and browser to navigate website after self-correcting for errors

Asks for assistance from teacher or peer and then able to navigate the website or use browser

Despite repeated assistance unable to navigate website or use browser OR does not ask for assistance from teacher or peer

Locating Relevant

Information

Independently able to locate information relevant to topic on website

Independently able to locate information relevant to topic on website after self-correcting for errors

Asks for assistance from teacher or peer and then able to locate relevant information on the topic on website

Despite repeated assistance unable to locate relevant information on the website OR does not ask for assistance from teacher or peer

Selecting Important

Information

Independently able to discern and select important information directly supportive of research topic

Independently able to discern and select important information directly supportive of research topic after self-correcting for errors

Asks for assistance from teacher or peer and then able to discern and select important information directly supportive of research topic

Despite repeated assistance unable to discern and select important information directly supportive of research topic OR does not ask for assistance from teacher or peers

Documenting Information in

Notes/First Draft

Independently able to neatly and accurately document in notes/first draft the information in own words from website

Independently able to neatly and accurately document in notes the information from the website in notes/first draft in own words with

Asks for assistance from teacher or peer and then able to neatly and accurately document in notes/first draft the information from

Despite repeated assistance, unable to neatly and accurately document in notes/first draft the information from the website in own

Unit 8, Specific Assessments, Activity 8, Internet Research Rubric

not more than 5 corrections during teacher review

the website in own words with not more than 10 corrections during teacher review

words OR plagiarizes from website OR does not produce notes/first draft or product is illegible

Completes Assignment

Independently able to complete assignment

Independently able to complete assignment after self-correcting or 2 requests for assistance from teacher

Asks for assistance from teacher or peer more then 5 times and then able to complete assignment

Despite repeated assistance is unable to complete assignment OR chooses not to complete assignment

Unit 9, Activity 1, Stock Portfolio

Task: 1. This activity will span the next two weeks.

2. Each student will begin with a hypothetical $50,000 to invest in common stocks listed on the

New York Stock Exchange (NYSE).

3. You will be given two days to research companies listed on the NYSE and choose your stock

investments. http://www.nyse.com/

4. Each student must invest as close to possible all of his/her $50,000 on NYSE listed companies.

5. Students must invest in common stocks of 10 companies.

6. Complete the Portfolio Buy Sheet BLM on the day of your portfolio investment.

7. Each day complete the Company Sheet BLM table for each company you’ve invested in. You

can check the closing price of your stocks at the above NYSE web address, the daily newspaper

or the stock ticker that runs on CNBC™ in the evenings.

8. At the end of the two-week investment period, complete the Portfolio Tally Sheet BLM.

http://www.nyse.com/

Unit 9, Activity 1, Portfolio Buy Sheet

Portfolio Buy SheetDate:Name:

Symbol Full name of corporation

Purchase price per share

Number of shares

Purchase Price

Portfolio Total Purchase Price(Buy as close to $50,000 as possible.)

Unit 9, Activity 1, Company Sheet

Update each day for each company.

NYSE Investments - Company SheetCompany Symbol Purchase Price Shares

PurchasedTotal Investment

$ $

Day 1 close Day 1 profit/loss Day 2 close Day 2

profit/loss

$ $ $ $

Day 3 close Day 3 profit/loss


$ $ $ $



$ $ $ $



$ $ $ $



$ $ $ $

Total profit/loss $

Unit 9, Activity 1, Portfolio Tally Sheet

52-week Hi52-week Lo

Stock

Symbol

Dividend

Yield Percentage

Price to Earnings Ratio

Volume 100s

Hi

NYSE Investments - Tally SheetCompany Shares

purchasesPurchase

price Final price Investment results Profit/Loss

Portfolio Total

Unit 9, Activity 1, Portfolio Tally Sheet

Lo

Close

Net Change

Unit 9, Activity 2, Newspaper Listings

Task: Bring the financial section of a newspaper to class.

Discussion Topic: How to read the stock market tables. Use the Newspaper Stock Listings BLM to take notes during the discussion.

Example newspaper page excerpt

52 Week Stock Sym Div Yld % PE Vol

100s Hi Lo Close NetChgHi Lo

49.95 24.40 EKodak EK 1.80 5.4 129 17348 33.79 33.32 33.55 -.1988.68 55.12 Eaton ETN 1.76 2.1 39 3555 85.65 84.79 84.81 -1.0947.88 28.50 Ecolab ECL - - 30 2069 44.21 43.77 44.21 +.44

Task: In your financial section, find the ten stocks you chose to track on your Portfolio Buy Sheet BLM from activity 1 and complete the table below.

52 Week Stock Sym Div Yld % PE Vol

100s Hi Lo Close NetChgHi Lo

Unit 9, Activity 3, Business Television Opinionnaire

What Are Your Opinions About Watching Business Television?

Directions: After each statement, write SA (strongly agree), A (agree), D (disagree), or SD (strongly disagree). Then in the space provided, briefly explain the reasons for your opinions.

1. I can gain valuable insight into the world around me by watching business programming on television. _________

Your reasons:

2. Business television is only for rich people._________

Your reasons:

3. Business television is boring stuff I won’t care about._________

Your reasons:

4. I can’t learn anything relevant to my life by watching business television._________

Your reasons:

5. In the future I may enjoy watching business television._________

Your reasons:

Day of week:_________________________________________

Unit 9, Activity 3, Nightly Notes

Name:_____________________________Day of Week:___________________________

Directions. Use this worksheet to record your notes from watching “Nightly Business Report.”

1. Date of episode:_____________________________

2. Summary of major topics covered with relevant points from each article.

3. Closing numbers for the Dow Jones Industrial Average ____________________________

NASDAQ _____________________________

S&P 500 ______________________________

Light Sweet Crude ____________________________

Brent North Sea Crude ____________________________

4. List any topics that would directly affect your financial stability and how the affect would manifest itself.

Unit 9, Activity 5, Introduction to Mutual Funds

What They Are

A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate.

Some of the traditional, distinguishing characteristics of mutual funds include the following:

Investors purchase mutual fund shares from the fund itself (or through a broker for the fund).

The price that investors pay for mutual fund shares is the fund's per share net asset value (NAV) plus any shareholder fees that the fund imposes at the time of purchase (such as sales loads).

Mutual fund shares are "redeemable," meaning investors can sell their shares back to the fund (or to a broker acting for the fund).

Mutual funds generally create and sell new shares to accommodate new investors. In other words, they sell their shares on a continuous basis, although some funds stop selling when, for example, they become too large.

Advantages and Disadvantages

Every investment has advantages and disadvantages. For some investors, mutual funds provide an attractive investment choice because they generally offer the following features:

Professional Management — Professional money managers research, select, and monitor the performance of the securities, stocks/bonds/etc., the fund purchases.

Diversification — Diversification is an investing strategy that can be neatly summed up as "Don't put all your eggs in one basket." Spreading your investments across a wide range of companies and industry sectors can help lower your risk if a company or sector fails. Some investors find it easier to achieve diversification through ownership of mutual funds rather than through ownership of individual stocks or bonds.

Affordability — Some mutual funds accommodate investors who don't have a lot of money to invest by setting relatively low dollar amounts for initial purchases, subsequent monthly purchases, or both.

Liquidity — Mutual fund investors can readily redeem their shares at the current NAV — plus any fees and charges assessed on redemption — at any time.

But mutual funds also have features that some investors might view as disadvantages, such as:

Costs Despite Negative Returns — Investors must pay sales charges, annual fees, and other expenses, regardless of how the fund performs. And, depending on the timing of


their investment, investors may also have to pay taxes on any capital gains distribution they receive — even if the fund went on to perform poorly after they bought shares.

Lack of Control — Investors typically cannot ascertain the exact make-up of a fund's portfolio at any given time, nor can they directly influence which securities the fund manager buys and sells or the timing of those trades.

Price Uncertainty — With an individual stock, you can obtain real-time (or close to real-time) pricing information with relative ease by checking financial websites or by calling your broker. You can also monitor how a stock's price changes from hour to hour — or even second to second. By contrast, with a mutual fund, the price at which you purchase or redeem shares will typically depend on the fund's NAV, which the fund might not calculate until many hours after you've placed your order. In general, mutual funds must calculate their NAV at least once every business day, typically after the major U.S. exchanges close.

Different Types of Funds

When it comes to investing in mutual funds, investors have literally thousands of choices. Before you invest in any given fund, decide whether the investment strategy and risks of the fund are a good fit for you. The first step to successful investing is figuring out your financial goals and risk tolerance — either on your own or with the help of a financial professional. Once you know for what you're saving, when you'll need the money, and how much risk you can tolerate, you can more easily narrow your choices.

Most mutual funds fall into one of three main categories — money market funds, bond funds (also called "fixed income" funds), and stock funds (also called "equity" funds). Each type has different features and different risks and rewards. Generally, the higher the potential return, the higher the risk of loss.

Money Market Funds

Money market funds have relatively low risks compared to other mutual funds (and most other investments). By law, they can invest in only certain high-quality, short-term investments issued by the U.S. government, U.S. corporations, and state and local governments. Investor losses have been rare, but they are possible.

Money market funds pay dividends that generally reflect short-term interest rates, and historically the returns for money market funds have been lower than for either bond or stock funds. That's why "inflation risk" — the risk that inflation will outpace and erode investment returns over time — can be a potential concern for investors in money market funds.

Bond Funds

Bond funds generally have higher risks than money market funds, largely because they typically pursue strategies aimed at producing higher yields. Unlike money market funds,


the SEC's rules do not restrict bond funds to high-quality or short-term investments. Because there are many different types of bonds, bond funds can vary dramatically in their risks and rewards. Some of the risks associated with bond funds include:

Credit Risk — the possibility that companies or other issuers whose bonds are owned by the fund may fail to pay their debts (including the debt owed to holders of their bonds).

Interest Rate Risk — the risk that the market value of the bonds will go down when interest rates go up. Because of this, you can lose money in any bond fund.

Prepayment Risk — the chance that a bond will be paid off early. For example, a bond issuer may decide to pay off (or "retire") its debt. When this happens, the fund may not be able to reinvest the proceeds in an investment with as high a return or yield.

Stock Funds

Although a stock fund's value can rise and fall quickly (and dramatically) over the short term, historically stocks have performed better over the long term than other types of investments — including corporate bonds, government bonds, and treasury securities.

Overall "market risk" poses the greatest potential danger for investors in stocks funds. Stock prices can fluctuate for a broad range of reasons — such as the overall strength of the economy or demand for particular products or services.

Not all stock funds are the same. For example:

Growth funds focus on stocks that may not pay a regular dividend but have the potential for large capital gains.

Income funds invest in stocks that pay regular dividends.

Index funds aim to achieve the same return as a particular market index, such as the S&P 500 Composite Stock Price Index, by investing in all — or perhaps a representative sample — of the companies included in an index.

Sector funds may specialize in a particular industry segment, such as technology or consumer products stocks.

How to Buy and Sell Shares

You can purchase shares in some mutual funds by contacting the fund directly. Other mutual fund shares are sold mainly through brokers, banks, financial planners, or insurance agents. All mutual funds will redeem (buy back) your shares on any business day and must send you the payment within seven days.


The easiest way to determine the value of your shares is to call the fund's toll-free number or visit its website. The financial pages of major newspapers sometimes print the NAVs for various mutual funds. When you buy shares, you pay the current NAV per share plus any fee the fund assesses at the time of purchase, such as a purchase sales load or other type of purchase fee. When you sell your shares, the fund will pay you the NAV minus any fee the fund assesses at the time of redemption, such as a deferred (or back-end) sales load or redemption fee. A fund's NAV goes up or down daily as its holdings change in value.

How Funds Can Earn Money for You

You can earn money from your investment in three ways:

1. Dividend Payments — A fund may earn income in the form of dividends and interest on the securities in its portfolio. The fund then pays its shareholders nearly all of the income (minus disclosed expenses) it has earned in the form of dividends.

2. Capital Gains Distributions — The price of the securities a fund owns may increase. When a fund sells a security that has increased in price, the fund has a capital gain. At the end of the year, most funds distribute these capital gains (minus any capital losses) to investors.

3. Increased NAV — If the market value of a fund's portfolio increases after deduction of expenses and liabilities, then the value (NAV) of the fund and its shares increases. The higher NAV reflects the higher value of your investment.

With respect to dividend payments and capital gains distributions, funds usually will give you a choice: the fund can send you a check or other form of payment, or you can have your dividends or distributions reinvested in the fund to buy more shares (often without paying an additional sales load).

Degrees of Risk

All funds carry some level of risk. You may lose some or all of the money you invest — your principal — because the securities held by a fund go up and down in value. Dividend or interest payments may also fluctuate as market conditions change.

Before you invest, be sure to read a fund's prospectus and shareholder reports to learn about its investment strategy and the potential risks. Funds with higher rates of return may take risks that are beyond your comfort level and are inconsistent with your financial goals.

Fees and Expenses

As with any business, running a mutual fund involves costs — including shareholder transaction costs, investment advisory fees, and marketing and distribution expenses. Funds pass along these costs to investors by imposing fees and expenses. It is important that you understand these charges because they lower your returns. SEC rules require funds to disclose both shareholder


fees and operating expenses in a "fee table" near the front of a fund's prospectus. The list below will help you decode the fee table and understand the various fees a fund may impose:

Sales Charge (Load) on Purchases — the amount you pay when you buy shares in a mutual fund. Also known as a "front-end load," this fee typically goes to the brokers that sell the fund's shares. Front-end loads reduce the amount of your investment.

Purchase Fee — another type of fee that some funds charge their shareholders when they buy shares. Unlike a front-end sales load, a purchase fee is paid to the fund (not to a broker) and is typically imposed to defray some of the fund's costs associated with the purchase.

Deferred Sales Charge (Load) — a fee you pay when you sell your shares. Also known as a "back-end load," this fee typically goes to the brokers that sell the fund's shares. The most common type of back-end sales load is the "contingent deferred sales load" (also known as a "CDSC" or "CDSL"). The amount of this type of load will depend on how long the investor holds his or her shares and typically decreases to zero if the investor holds his or her shares long enough.

Redemption Fee — another type of fee that some funds charge their shareholders when they sell or redeem shares. Unlike a deferred sales load, a redemption fee is paid to the fund (not to a broker) and is typically used to defray fund costs associated with a shareholder's redemption.

Management Fees — fees that are paid out of fund assets to the fund's investment adviser for investment portfolio management, any other management fees payable to the fund's investment adviser or its affiliates, and administrative fees payable to the investment adviser that are not included in the "Other Expenses" category.

Distribution Fees ("12b-1" Fees) — fees paid by the fund out of fund assets to cover the costs of marketing and selling fund shares and sometimes to cover the costs of providing shareholder services. "Distribution fees" include fees to compensate brokers and others who sell fund shares and to pay for advertising, the printing and mailing of prospectuses to new investors, and the printing and mailing of sales literature. "Shareholder Service Fees" are fees paid to persons to respond to investor inquiries and provide investors with information about their investments.

Other Expenses — expenses not included under "Management Fees" or "Distribution or Service (12b-1) Fees," such as any shareholder service expenses that are not already included in the 12b-1 fees, custodial expenses, legal and accounting expenses, transfer agent expenses, and other administrative expenses.

Be sure to review carefully the fee tables of any funds you're considering, including no-load funds. Even small differences in fees can translate into large differences in returns over time. For example, if you invested $10,000 in a fund that produced a 10% annual return before expenses


and had annual operating expenses of 1.5%, then after 20 years you would have roughly $49,725. But if the fund had expenses of only 0.5%, then you would end up with $60,858, an 18% difference.

A Word About "No-Load" Funds

Some funds call themselves "no-load." As the name implies, this means that the fund does not charge any type of sales load. But, as discussed above, not every type of shareholder fee is a "sales load." A no-load fund may charge fees that are not sales loads, such as purchase fees, redemption fees, exchange fees, and account fees. No-load funds will also have operating expenses.

Source: U.S. Securities and Exchange Commission online publication “Invest Wisely: An Introduction to Mutual Funds,” located on the Internet at http://www.sec.gov/investor/pubs/inwsmf.htm

http://www.sec.gov/investor/pubs/inwsmf.htm


What Are TheyPredictions:

Questions:

Clarifications:

Summary:


Details:


Advantages and DisadvantagesPredictions:

Questions:

Clarifications:

Summary:


Details:


Different Types of FundsPredictions:

Questions:

Clarifications:

Summary:


Details:


How Funds Can Earn Money for YouPredictions:

Questions:

Clarifications:

Summary:


Details:

Fees and Expenses


Predictions:

Questions:

Clarifications:

Summary:


Details:

Unit 9, Activity 7, Risk vs. Reward

Some forms of investing are inherently more risky than other forms. Some forms of investing have built-in protections to minimize risk. It is important that you know the risk and potential reward of investments prior to investing in them. Complete this task to deepen your understanding of the risk/reward relationship.

Task:1. Research the investment risk/reward relationship.2. Produce a poster-sized graphic of the risk/reward continuum for various investment

types. At the bottom of the poster, list three ways to minimize investment risk over the long term.

3. Include topics such as: Diversification, Dollar-Cost Averaging, and Asset Allocation. 4. Look at the sample on the reverse side for guidance.

Unit 9, Activity 7, Risk vs. Reward

Main Idea

Commodities & Derivitives

Speculative Stock/Bonds/Mutual Funds

Blue Chip Common Stock & Mutual Funds Real Estate

Balanced Mutual Funds Preferred Stock & Convertible Bonds

Money Market Accounts or Mutual Funds High-Grade Municipal & Corporat e Bonds or Mutual Funds

Insured Checking Accounts Certificates of Deposit U.S. Savings Bonds Treasury Issues (T-Bills)

Methods to reduce risk:Insurance

DiversificationDollar-Cost Averaging

Asset Allocation

Insured Savings/Checking AccountsU.S. Savings Bonds

Certificates of DepositTreasury Issues ( T-Bills)

Money Market Accounts & Mutual FundsHigh-Grade Municipal & Corporate Bonds & Mutual Funds

High-Grade Preferred StockHigh-Grade Convertible Bonds

Balanced & Index Mutual Funds

Real EstateBlue Chip Common Stock & Mutual Funds

Growth Mutual Funds

CollectiblesSpeculative Stocks/Bonds/Mutual

Funds

CommoditiesDerivatives

PennyStock

Higher Risk

Higher Potential Return

Lower Risk

Lower PotentialReturn

Risk/Reward Pyramid

Unit 9, Activity 8, Life Insurance Terms

Task: Create a glossary of the life insurance terms below. The following web addresses may be helpful. http://www.iii.org/individuals/life/, http://www.ambest.com/resource/glossary.html#I

Term lifeDefinition:

Characteristics:

Examples/Relationship:

Whole lifeDefinition:

Characteristics:


Universal lifeDefinition:

Characteristics:


Variable lifeDefinition:

http://www.ambest.com/resource/glossary.html#I

http://www.iii.org/individuals/life/


Characteristics:


Adverse selectionDefinition:

Characteristics:


BeneficiaryDefinition:

Characteristics:


Cash valueDefinition:

Characteristics:



Contestability periodDefinition:

Characteristics:


IndemnifyDefinition:

Characteristics:


Medical Information BureauDefinition:

Characteristics:


Preferred RiskDefinition:

Characteristics:



Rated PolicyDefinition:

Characteristics:


Second-To-Die PolicyDefinition:

Characteristics:


Single premium lifeDefinition:

Characteristics:


Unit 9, Activity 9, Health Insurance: Understanding What It Covers

What are "covered services"? Your health insurance policy is an agreement between you and your insurance company. The policy lists a package of medical benefits such as tests, drugs and treatment services. The insurance company agrees to cover the cost of certain benefits listed in your policy. These are called "covered services." Your policy also lists the kinds of services that are not covered by your insurance company. You have to pay for any uncovered medical care that you receive.

What is a medical necessity? Is that different from a covered service? Keep in mind that a medical necessity is not the same as a medical benefit. A medical necessity is something that your doctor has decided is necessary. A medical benefit is something that your insurance plan has agreed to cover. In some cases, your doctor might decide that you need medical care that is not covered by your insurance policy. Insurance companies determine what tests, drugs and services they will cover. These choices are based on their understanding of the kinds of medical care that most patients need. Your insurance company's choices may mean that the test, drug or service you need isn't covered by your policy.

What should I do? Your doctor will try to be familiar with your insurance coverage so he or she can provide you with covered care. However, there are so many different insurance plans, that it's not possible for your doctor to know the specific details of each plan. By understanding your insurance coverage, you can help your doctor recommend medical care that is covered in your plan. Take the time to read your insurance policy. It's better to know what your insurance company will pay for before you receive a service, get tested or fill a prescription. Some kinds of care may have to be approved by your insurance company before your doctor can provide them.If you still have questions about your coverage, call your insurance company and ask a representative to explain it. Remember that your insurance company, not your doctor, makes decisions about what will be paid for and what will not. What happens if my doctor recommends care that isn't covered by my insurance?

Most of the things your doctor recommends will be covered by your plan, but some may not. When you have a test or treatment that isn't covered, or you get a prescription filled for a drug that isn't covered, your insurance company won't pay the bill. This is often called "denying the claim." You can still obtain the treatment your doctor recommended, but you will have to pay for it yourself. If your insurance company denies your claim, you have the right to appeal (challenge) the decision. Before you decide to appeal, know your insurance company's appeal process. This should be discussed in your plan handbook. Also, ask your doctor for his or her opinion. If your doctor thinks it's right to make an appeal, he or she may be able to help you through the process.

To get more information on this subject, talk to your family doctor.

Copyright © 2001-2003 American Academy of Family Physicians Permission is granted to print and photocopy this material for nonprofit educational uses.

Unit 9, Activity 9, Health Insurance on Trial

Task:1. This is a five-day activity.

Discussion Topic: The rising burden on society to provide quality healthcare to our growing masses.

Is healthcare too expensive? Why are healthcare costs rising at a rate much higher than core inflation? Who should be responsible for paying the rising costs of healthcare?

o Society as a whole through higher taxeso Individuals through higher group insurance rates

What about those who can’t pay? What about prescription medication? Who should pay?

o Society as a whole (higher taxes)o Individuals (potentially greater, disproportionate individual burden)

What would cause healthcare rates to rise so high so fast?o Shortage of doctorso Shortage of medical facilitieso Shortage of prescription medication

What role does medical technology play in rising costs? Does a healthy, long life have a price? If so, what is it and who decides?

2. This is a group activity, I will assign groups.3. Each group will research a healthcare topic based on similar points of view. 4. For example:

Social medicine, society pays for everyone’s healthcare costs Private medicine, individuals pay for their own healthcare needs Middle-Of-The-Road medicine, helps those that need help and those that can, pay

Mock Trial. HEALTHCARE: HOW DO WE FIX IT? Each working group will be a defensive team for the defense of the group’s point-of-view concerning healthcare. The groups should prepare a defense to present to a judge on day 5 of this activity.

Days 1 through 4. Each working group will have 4 days to research and plan for a defensive argument based on the group’s research and prevailing point of view. Prepare a thesis to phrase your group’s point-of-view and research to support the thesis. Be prepared to present your thesis, with research, supporting arguments, and visual aids at the trial.

Day 5. A judge will preside over our mock trial of the healthcare issue. Each group will present their researched argument to the judge with facts, conjecture and visual displays. While one group is presenting, the other groups can serve as the jury for the argument. The idle groups should take notes and respond to the judge as necessary.

Unit 9, General Assessments, Building Wealth Quiz

Name:________________________________________

Answer each question as completely as possible.

1. Explain dollar cost averaging and why it is important.

2. Why is it important to write down your financial goals?

3. Explain stock appreciation.

4. What are mutual funds?

5. Why are IRAs and 401(k)s important to retirement investment planning?

6. Explain the risk/reward continuum of investing.

7. How does life insurance fit into your financial plan?

Unit 9, General Assessments, Building Wealth Quiz with Answers

1. Explain dollar cost averaging and why it is important.

Dollar cost averaging is a technique designed to reduce market risk through the systematic purchase of securities at predetermined intervals and set amounts.

2. Why is it important to write down your financial goals?

Written goals allow you to track progress toward reaching your personal financial goals.

3. Explain stock appreciation.

An increase in the value of stock in a company.

4. What are mutual funds?

A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments.

5. Why are IRAs and 401(k)s important to retirement investment planning?

Individual Retirement Account – lets you build wealth and retirement security; grows tax-free until you retire and withdraw it.

A retirement account at a place of employment; you contribute a percentage of before-tax salary, employers match a portion of every dollar you invest; tax-deferred.

6. Explain the risk/reward continuum of investing.

As a general rule, the greater the potential reward of an investment, the greater the risk and visa versa.

7. How does life insurance fit into your financial plan?

Early in a working lifecycle, life insurance is important to protect the future of dependants. As one nears retirement, life insurance becomes an integral part of inheritance estate planning.


Name:___________________________________________

Background: Jonnie started working at Escape Travel Agency after finishing high school. Recently, Jonnie was promoted to office manager and she wants to begin an investment program. She earns $32,000 annually, isn’t married, and rents an apartment. She is going to night school in advertising and graduates in 2 ½ years with a bachelor’s degree. Jonnie went to the library at school to research investing and was soon overwhelmed by the information and the choices. Returning home in bewilderment, she calls you, her long-time friend, for advice.

Jonnie has a financial workbook that she needs help working through. Please help her work the problems and answer any questions she may have.

Situation 1. After they both retired, Ed and Samantha Falcon sold their house and land for $175,000 and rented an apartment. They invested almost all of the proceeds from the sale of their house in 170, $1000 par value, 7% bonds of Excomunico Limited. The bonds mature in 8 years. The market price of the bonds was 95 ½, with a .5% commission charge.

1. What is the total invested in these bonds?

2. Based on the bonds’ original purchase price, what rate of income could be earned on this bond investment? (to the nearest percent)

3. If interest is paid on these bonds semiannually, what is the amount of the semiannual interest payment?

4. If the Falcons hold the bonds until their maturity date, what total amount will they receive from Excomunico Limited when they redeem their bonds? (No commission will be charged at redemption.)

5. Would you advise Jonnie to invest in bonds? Why or why not?


Situation 2. Jacob deposits money from each paycheck into a savings account. When the account balance reaches $2000, he withdraws $2000 and invests in shares of the Happy Endings Growth Fund. Jacob has purchased mutual fund shares for the past five years at these prices:

Year Net Asset Value Offer # Shares Bought1 7.27 7.65 261.4382 7.73 8.14 245.7003 8.35 8.79 227.5314 8.74 9.20 217.3915 9.20 9.68 206.612

6. What total number of Happy Endings Growth Fund shares does Jacob own?

7. What average price per share did Jacob pay for the shares he owns?

8. One year after making his last purchase, the Happy Endings Growth Fund has a NAV of $8.93 and an offer price of $9.40. If Jacob sells all the shares he owns, what are his net proceeds from the sale? What is his net profit from the ownership of Happy Endings Growth Fund shares?

9. If Jacob makes no additional fund purchases after the fifth year, at what price would he sell his shares to double his investment?

10. Jacob practices a more basic form of dollar-cost-averaging. Explain to Jonnie the benefits of dollar-cost-averaging.


Situation 3. Robert invests $5000 in each of two different stocks. He bought 200 shares of Snow Peak Outdoor Products at $25 per share, including commission. The Snow Peak stock pays a quarterly dividend of $0.37 ½ per share. He also bought 400 shares of Drownage Shipping Company stock at $12.50, including commission. Drownage Shipping paid no dividend for four years, and then in the fifth year it paid a quarterly dividend of $0.02 per share.

Robert kept both stocks for five years, and then sold them at these net prices, after commission: Snow Peak Outdoor Products, $28; Drownage Shipping, $18.

11. What total dividend did Robert receive from both stocks?

12. What profit or loss did Robert make on each sale?

13. What was the total gain or loss from ownership of these stocks?

14. Jonnie likes the idea of investing in stocks, but is unclear about how to manage risk. Please explain her options when it comes to managing risk.

15. Which of the above investment options would be best for Jonnie if she plans to save $2200 for a home down payment and $1000 for longer-term goals?


1. What is the total invested in these bonds? 170 * $955 * 1.005 = $163,161.75

2. Based on the bonds’ original purchase price, what rate of income could be earned on this bond investment? (to the nearest percent)($1000 * .07) / $955 = 7.3%

3. If interest is paid on these bonds semiannually, what is the amount of the semiannual interest payment?$170,000 * .07 / 2 = $5,950

4. If the Falcons hold the bonds until their maturity date, what total amount will they receive from Excomunico Limited when they redeem their bonds? (No commission will be charged at redemption.) 170 * $1,000 = $ 170,000

5. Would you advise Jonnie to invest in bonds? Why or why not?Student answers with vary, but should include topics such as: Jonnie is too young to recommend investing in bonds, bonds are very safe, Jonnie doesn’t need current income.

6. What total number of Happy Endings Growth Fund shares does Jacob own?261.438 + 245.700 + 227.531 + 217.391 + 206.612 = 1,158.672

7. What average price per share did Jacob pay for the shares he owns? $10,000 / 1,158.672 = $8.63

8. One year after making his last purchase, the Happy Endings Growth Fund has a NAV of $8.93 and an offer price of $9.40. If Jacob sells all the shares he owns, what are his net proceeds from the sale? What is his net profit from the ownership of Happy Endings Growth Fund shares?

1,158.672 * $8.93 = $10,346.94 Net proceeds from sell

$10,346.94 - $10,000 = $346.94 Net profit from sell


9. If Jacob makes no additional fund purchases after the fifth year, at what price would he sell his shares to double his investment?$8.63 * 2 = $17.26 N.A.V.

10. Jacob practices a more basic form of dollar-cost-averaging. Explain to Jonnie the benefits of dollar-cost-averaging. Student answers will vary, but should include: pay yourself first, buy more shares over time, when market is high you buy less shares, when market is low you buy more shares, reduces average share price over time.

11. What total dividend did Robert receive from both stocks?Snow Peak: 200 * $0.375 * 4 * 5 = $1,500

Drownage: 400 * $0.02 * 4 = $32

12. What profit or loss did Robert make on each sale?Snow Peak: ($28 - $25) * 200 = $600 Profit

Drownage: ($18 - $12.50) * 400 = $2,200 Profit

13. What was the total gain or loss from ownership of these stocks?Snow Peak: $1,500 + $600 = $2,100 Profit

Drownage: $32 + $2,200 = $2,232 Profit

14. Jonnie likes the idea of investing in stocks but is unclear about how to manage risk. Please explain her options when it comes to managing risk.Student answers will vary, but should include: making investments automatic, dollar cost averaging, stock mutual funds. 15. Which of the above investment options would be best for Jonnie if she plans to save $2200 for a home down payment and $1000 for longer-term goals?Student answers will vary. Invest for a home down payment, with a less than 5-year time horizon perhaps, save in balanced or less aggressive stock mutual funds. Cannot afford to lose the money, so keep it fairly safe. Invest for longer-term goals (investments can be more risky), perhaps in individual stocks or more aggressive stock mutual funds.

Unit 9, Specific Assessments, Activity 1, Calculator Tool

Using the information recorded on your Portfolio Buy Sheet BLM completed for Activity 1 and a graphing calculator, follow the steps outlined below to input your investments.

To the right is a chart of the example stock investments used in the calculator screenshots.

Keep a daily track of what your investments are doing by calculating the profit and loss for each of your stocks from the Portfolio Buy Sheet BLM over a ten day period.

1) Enter the cost per share of each stock in List 1.

2) Enter the corresponding number of shares bought in List 2, enter the values into the lists in the same order each time.

3) In List 3 arrow up and highlight L34) Enter L1 times L2 press ENTER

5) Clear the home screen6) Press 2nd L1 press STO press 2nd LIST highlight OPS highlight B press

ENTER7) Press 2nd ALPHA press C press O press S press T press ENTER8) Press 2nd L2 press STO press 2nd LIST highlight OPS highlight B press

ENTER9) Press 2nd ALPHA press S press H press A press R press E press ENTER10) Press 2nd L3 press STO press 2nd LIST highlight OPS highlight B press

ENTER11) Press 2nd ALPHA press B press U press Y press ENTER

Stock Name

Cost per Share

Number of Shares

Total Investment

A 14.23 450 6403.50B 5.03 800 4024.00C 14.76 700 10332.00D 7.24 301 2179.24E 29.65 250 7412.50F 21.56 300 6468.00G 47.12 125 5890.00H 9.49 200 1898.00I 11.07 300 3321.00J 3.45 600 2070.00


The initial cost per share is now stored in a list called COST, the number of shares purchased for each stock in a list called SHARE, and the total cost for each stock in a list called BUY. Do not use the Clear All List feature or it will clear the values saved in these special lists. Clear the lists by arrowing up and highlighting their names then pressing CLEAR and arrowing back down.

At the beginning of each class period, calculate your profit or loss for each stock and then calculate your total profit or loss on all the stocks.

12) Clear the home screen13) Go to list 1 and arrow up to highlight L114) Press 2nd LIST highlight BUY press ENTER press ENTER15) Go to list 2 use the up arrow to highlight L216) Press 2nd LIST highlight SHARE press ENTER press ENTER17) Enter the closing price for the day of each stock in list 3. Remember they must be

entered in the same order as the original stock.18) Go to list 4 use the up arrow to highlight L419) Enter L2 times L3 press ENTER20) Go to list 5 use the up arrow to highlight L521) Enter L4 minus L1 press ENTER

List 1: Initial Total Cost per StockList 2: Shares BoughtList 3: Current Value per ShareList 4: Current ValueList 5: Profit or Loss to Date

22) Save daily profit and loss statements by following the steps 6 and 7 for list 5 and naming it Daily. Show me your calculator with the value of Daily each day when you have completed this step.


23) Calculate the total profit or loss for all stocks at the end of the 10-day activity:1) Clear the home screen2) Press 2nd LIST highlight MATH highlight 5 press ENTER3) Press 2nd L5 press ENTER4) Show me your calculator with this value.

Unit 9, Specific Assessments, Activity 8, Definitions

Directions. Match each word with its definition by writing the letter of the correct definition in the box to the right of the word.

Answer1. Adverse selection

A. The amount that the owner of a permanent life insurance policy is entitled to receive if the policy does not remain in force until the insured’s death.

2. BeneficiaryB. A nonprofit organization established to provide information to insurers about impairments that applicants have admitted to, or that other insurers have detected, in connection with previous applications for insurance.

3. Cash value C. A type of life insurance or annuity contract that is purchased by the payment of one lump sum.

4. Contest-ability period

D. This is a substandard policy, which means the physical or moral lifestyle of the insured is more susceptible to loss. It's the opposite of a Preferred Risk.

5. Indemnify

E. A form of life insurance that covers the insured person for a certain period of time, specified in the policy. It pays a benefit to a designated beneficiary only when the insured dies within that specified period, which can be one, five, 10 or even 20 years. Renewable, but premiums increase with age.

6. Medical Information Bureau

F. A policy that combines protection against premature death with a savings account that can be invested in stocks, bonds, and money market mutual funds at the policyholder’s discretion.

7. Preferred Risk

G. The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all.

8. Rated Policy H. The person or legal entity the owner of an insurance policy names to receive the policy benefit if the event insured against occurs.

9. Second-To-Die Policy

I. A flexible premium policy that combines protection against premature death with a type of savings that typically earns a money market rate of interest. Death benefits can be changed during the life of the policy within limits.

10. Single premium life

J. This is a fancy word that means your beneficiaries are paid the death benefit to compensate for loss.

11. Term lifeK. Permanent life insurance policy that insures two lives under one policy, usually a husband and wife. Only after both insured parties are deceased will the death benefit proceeds be paid.

12. Universal life

L. The time during which an insurer has the right to cancel or rescind an insurance policy if the application contained a material misrepresentation.

13. Variable lifeM. The oldest kind of cash value life insurance that combines protection against premature death with a savings account. Premiums are fixed and guaranteed and remain level throughout the policy’s lifetime.

14. Whole lifeN. This refers to a person whose lifestyle, health, occupation, personal habits, hobbies, family history, etc., indicate the person should live a long time. Smokers and race car drivers are not this.

Unit 9, Specific Assessments, Activity 8, Definitions with Answers

Answer1. Adverse selection G

A. The amount that the owner of a permanent life insurance policy is entitled to receive if the policy does not remain in force until the insured’s death.

2. Beneficiary HB. A nonprofit organization established to provide information to insurers about impairments that applicants have admitted to, or that other insurers have detected, in connection with previous applications for insurance.

3. Cash value A C. A type of life insurance or annuity contract that is purchased by the payment of one lump sum.

4. Contest-ability period L

D. This is a substandard policy, which means the physical or moral lifestyle of the insured is more susceptible to loss. It's the opposite of a Preferred Risk.

5. Indemnify J

E. A form of life insurance that covers the insured person for a certain period of time, specified in the policy. It pays a benefit to a designated beneficiary only when the insured dies within that specified period, which can be one, five, 10 or even 20 years. Renewable, but premiums increase with age.

6. Medical Information Bureau

BF. A policy that combines protection against premature death with a savings account that can be invested in stocks, bonds, and money market mutual funds at the policyholder’s discretion.

7. Preferred Risk N

G. The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all.

8. Rated Policy D H. The person or legal entity the owner of an insurance policy names to receive the policy benefit if the event insured against occurs.

9. Second-To-Die Policy K

I. A flexible premium policy that combines protection against premature death with a type of savings that typically earns a money market rate of interest. Death benefits can be changed during the life of the policy within limits.

10. Single premium life C J. This is a fancy word that means your beneficiaries are paid the death

benefit to compensate for loss.

11. Term life EK. Permanent life insurance policy that insures two lives under one policy, usually a husband and wife. Only after both insured parties are deceased will the death benefit proceeds be paid.

12. Universal life F L. The time during which an insurer has the right to cancel or rescind an

insurance policy if the application contained a material misrepresentation.

13. Variable life IM. The oldest kind of cash value life insurance that combines protection against premature death with a savings account. Premiums are fixed and guaranteed and remain level throughout the policy’s lifetime.

14. Whole life MN. This refers to a person whose lifestyle, health, occupation, personal habits, hobbies, family history, etc., indicate the person should live a long time. Smokers and race car drivers are not this.

Unit 9, Specific Assessments, Activity 9, Trial Rubric

Health Insurance Mock Trial Rubric4 3 2 1 Points

Research/Group Performance

Gathering Information

Gathers a great deal of information with clear criteria in mind

Gathers and selects sufficient information with criteria in mind

Is generally on track gathering information, but information is weak in some areas

Little information gathered

Organizing Information

Information is organized in a logical and thoughtful manner.

Is able to organize information

Shows some skill in approaching the problem in a logical manner

Shows little skill in approaching the problem logically

Using Information

Shows insight in drawing conclusions from information

Draws conclusions from the information

Makes a concluding statement that generalizes information

Draws no conclusions and/or demonstrates little purpose for gathering data

Thinking

Clearly demonstrates divergent thinking and is insightful

Uses some divergent thinking in approach to the problem

Shows little divergent thinking

Exhibits no creative or divergent thinking

Working with Others

Almost always listens to, shares with, and supports the efforts of others; tries to keep people working well together

Usually listens to, shares, with, and supports the efforts of others; does not cause "waves" in the group

Often listens to, shares with, and supports the efforts of others, but sometimes is not a good team member

Rarely listens to, shares with, or supports the efforts of others; often is not a good team player.

Focus on the Task

Consistently stays focused on the task and what needs to be done; very self-directed

Focuses on the task and what needs to be done most of the time; other group members can count on this person.

Focuses on the task and what needs to be done some of the time; other group members must sometimes nag,

Rarely focuses on the task and what needs to be done; lets others do the work


prod, and remind to keep this person on-task

Trial Preparation

Statements

Statementsare fully developed,completelyconsistent withresearch,and accuratelyportrayed.

Statementsare adequatelydeveloped, fairlyconsistent, andaccuratelyportrayed.

Statements showa lack ofpreparation.

Statementsare not developed,and presentationshows little or nopreparation.

Questions

Questionsare relevant, logical,and clear. Questionsare properly formedand delivered.

Questionsare clear, logical,and relevant. Most ofthe time; mostquestions areproperly formed.

Questionslack logic. Mostquestions are poorlyformed.

Questionsare irrelevant orunclear.

Depth of Understanding

Statements andquestions showsophisticatedunderstanding ofhow evidencerelates to andsupports or opposesthe claim.

Statements andquestions show anunderstanding ofhow evidencesupports or opposesthe claim.

Statements andquestions showsome understandingof how evidencesupports or opposesthe claim.

Statements andquestions areinconsistent withevidence supportingor opposing theclaim.

Trial BehaviorVoice Easily

understood andconsistently uses anappropriate rate,volume, andintonation

Understood most ofthe time and usesan appropriate rate,volume, andintonation most of

Understood, butuses aninappropriate rate,volume, orintonation thatdistracts from what

Noteasily understood


the time. is being said.

Authenticity

Excellent use of body and facialexpression; wordsand gestures match.

Adequate bodyand facialexpression

Lacksrealism; bodyand facialexpressions do notmatch actions

Unconvincing;body and facialexpressions are notused

CourtroomDecorum

Hasappropriateinteractions withjudge and opposing attorneys

Interactions with other members ofthe trial areappropriate most of the time.

Unsureof how to interactwith other membersof the trial

Distracted,demonstratesinappropriatebehavior

Overall Effort

Contributions

Routinely provides useful ideas. A definite leader who contributes a lot of effort.

Usually provides useful ideas. A strong group member who tries hard!

Sometimes provides useful ideas. A satisfactory group member who does what is required.

Rarely provides useful ideas. May refuse to participate.

Pride

Work reflects this student's best efforts.

Work reflects a strong effort from this student.

Work reflects some effort from this student.

Work reflects very little effort on the part of this student.

Unit 10, Activity 2, Cash Flow Record

Task: Complete a personal spending record for two weeks.

Cash Flow Record Week 1Week of: Name:

Income Expenses

Sunday

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday

TOTALS:

Income minus expenses:

The first step toward managing your money is to keep accurate records of how and where

money is spent.

Unit 10, Activity 2, Cash Flow Record

Cash Flow Record Week 2Week of: Name:

Income Expenses

Sunday

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday

TOTALS:

Income minus expenses:

Unit 10, Activity 3, Monthly Budget Sheet

Task: Use the Cash Flow Record BLM prepared for the first week of this unit to extrapolate dollar amounts to prepare a monthly budget sheet.

Monthly Budget SheetBudget for: Month of:

Budgeted Amount Actual AmountIncome:

Work (net pay) $ $

Gifts/Allowance $ $

Other $ $

Total Income $ $Fixed Expenses:

Savings for goals $ $

Car Payment $ $

Auto Insurance $ $

Other $ $

Total Fixed ExpensesVariable Expenses

Food $ $

Gas $ $

Clothing $ $

Entertainment $ $

Special Occasions $ $

Other $ $

Total Variable Expenses $ $

Total Expenses $ $

Balance: (Income minus Expenses)

$ $

Unit 10, General Assessments, End-Of-Course Test

Name:__________________________________________________

Introduction: Tracy and Albert Rushworth now rent an apartment for $670 a month. While renting, they saved $17,000 to use for a down payment on a home and other expenses. The Rushworths have been looking at houses, and found one priced at $85,000 that meets their needs. Closing costs on the house would be $2,500. Before signing a contract to buy the home, the Rushworths went to several lenders for home mortgage information. They found three lenders in the area that offer mortgages at these terms:

Lender A requires a 20% down payment for a 14.25%, 20-year mortgage loan. For these terms, the monthly mortgage payment will be $857.97.

Lender B offers a 14.50%, 25-year mortgage loan with a minimum 16% down payment. At this rate, the monthly mortgage payment will be $886.91.

Lender C offers the longest mortgage term, 30 years. To get that term, the borrower must make a minimum down payment of 14% and pay a rate of 14.875%. At these terms, the monthly mortgage payment will be $917.01.

Because they will no longer live near their work, the Rushworths will have to buy a second car. They have shopped for a new car, and found one they like that sells for $12,600. With a minimum down payment required of 10%, the monthly payments would be $401.49 for a loan of three years and $324.30 for a four-year loan. It is possible to lease the car they want instead of buying. The monthly lease payments would be $289.50, with no money down.

The estimated annual expenses of operating the car they want are as follows: gasoline, 650 gallons at $3.05; insurance, $420; maintenance, $230; license fees, $45. At the time of purchase, only one-fourth of the annual insurance premium must be paid along with the license fee. If the car is purchased, the interest for the first year would be $1,638 on a three-year loan and $1,711 on a four-year loan. If the car is purchased, the depreciation expense the first year will be 22% of the purchase price and the interest lost on money invested in the car will be $101.

The Rushworths’ combined gross income is $45,000 a year. If they buy the house, they will have these expenses: property taxes, $2,090; insurance, $320; maintenance and repairs, $1,100; lost interest on the down payment at 8%; depreciation at a rate of 2% a year. The first-year mortgage interest they would pay varies among lenders as follows: Lender A, $9,649; Lender B, $10,333; Lender C, $10, 864.

By paying property taxes and mortgage interest, the Rushworths would have these tax benefits, depending on where they got their mortgage: Lender A, $3,290; Lender B, $3,480; Lender C, $3,630.


Complete the following tables to summarize the data that the Rushworths gathered.

1.Money Needed at Time of Home and Car Purchase

(assuming minimum down payment is made)Lender A Lender B Lender C

Home Down Payment

Closing Costs

Subtotal

Car Down Payment

Car Insurance(¼th of annual premium)

License Fee

Total Amount Needed

2.Cost of Owning Home for First Year

Lender A Lender B Lender C

Property Taxes

Insurance

Maintenance & Repairs

Lost Interest

Depreciation

Mortgage Interest

Total Gross Cost

Less Tax Savings

Net Cost of Owning

3.


Total Interest Paid Over Term of Original Mortgage Loan(to nearest dollar)


Amount

4.Car Operating Cost

Gasoline

Insurance

Maintenance

License Fees

Total Operating Costs

5.Cost of Leasing and Operating Car for First Year

Annual Lease Cost

Total Operating Cost

Total Cost

6.Cost of Owning and Operating Car for First Year

Three-year Loan Four-year Loan

Operating Costs

Depreciation

Interest Paid

Interest Lost

Total Cost


7.Total Annual Payment for Mortgage and Car Loan

Mortgage Obtained From:

Total Annual Mortgage Payment Plus Annual

Payment on a 3-year Car Loan



Lender A

Lender B

Lender C

Complete the Decision Table below by writing a “yes” or “no” answer using the data from the tables you completed or other facts provided. Then, answer the questions that follow.

8.Decision Table: Do the Rushworths have enough money saved to buy a

house and a car or buy a house and lease a car?Can they get a mortgage

from… And buy a car? And lease a car?

Lender A

Lender B

Lender C

9. In order to be approved for a mortgage loan by any lender, the purchase price of the house must be less than 2.5 times the buyer’s annual income. Do the Rushworths meet this requirement?

10. Compare the lowest cost of owning the home with the cost of renting. Which is less expensive, and by how much?


11. Compare the cost of buying and leasing a car. Which will be less expensive for the Rushworths during the first year?

12. For each lender, give the total amount of money that is needed if both the home and car are purchased.

13. From which lender(s) can the Rushworths get a mortgage loan and still afford to buy a car after making all the required down payments and not spending more than they saved?

14. Assume the Rushworths do not want to spend more than one-third of their annual gross income on mortgage and car payments. Using the decision table and other data, identify the combination(s) that will come closest to this goal of limiting spending. Explain your answer.

15. If you were making this home and car buying decision for the Rushworths, describe what you would do and why.


Unit 10, General Assessments, End-Of-Course Test with Answers

Complete the following tables to summarize the data that the Rushworths gathered.

1.Money Needed at Time of Home and Car Purchase

(assuming minimum down payment is made)Lender A Lender B Lender C

Home Down Payment $17,000 $13,600 $11,900

Closing Costs $2,500 $2,500 $2,500

Subtotal $19,500 $16,100 $14,400

Car Down Payment $1,260 $1,260 $1,260

Car Insurance(¼th of annual premium) $105 $105 $105

License Fee $45 $45 $45

Total Amount Needed $20,910 $17,510 $15,810

2.Cost of Owning Home for First Year


Property Taxes $2,090 $2,090 $2,090

Insurance $320 $320 $320

Maintenance & Repairs $1,100 $1,100 $1,100

Lost Interest $1,360 $1,088 $952

Depreciation $1,700 $1,700 $1,700

Mortgage Interest $9,649 $10,333 $10,864

Total Gross Cost $16,219 $16,631 $17,026

Less Tax Savings $3,290 $3,480 $3,630

Net Cost of Owning $12,929 $13,151 $13,396

3.


Total Interest Paid Over Term of Original Mortgage Loan(to nearest dollar)


Amount $137,913 $194,673 $257,024

4.Car Operating Cost

Gasoline $1,982.50

Insurance $420

Maintenance $230

License Fees $45

Total Operating Costs $2677.50

5.Cost of Leasing and Operating Car for First Year

Annual Lease Cost $3,474

Total Operating Cost $2,677.50

Total Cost $6,151.50

6.Cost of Owning and Operating Car for First Year

Three-year Loan Four-year Loan

Operating Costs $2,677.50 $2,677.50

Depreciation $2,772 $2,772

Interest Paid $1,638 $1,711

Interest Lost $101 $101

Total Cost $7,188.50 $7,261.50


7.Total Annual Payment for Mortgage and Car Loan

Mortgage Obtained From:





Lender A $15,113.52 $14,187.24

Lender B $15,460.80 $14,534.52

Lender C $15,822 $14,895.72

Complete the Decision Table below by writing a “yes” or “no” answer using the data from the tables you completed or other facts provided. Then, answer the questions that follow.

8.Decision Table: Do the Rushworths have enough money saved to buy a

house and a car or buy a house and lease a car?Can they get a mortgage

from… And buy a car? And lease a car?

Lender A No No

Lender B No Yes

Lender C Yes Yes

9. In order to be approved for a mortgage loan by any lender, the purchase price of the house must be less than 2.5 times the buyer’s annual income. Do the Rushworths meet this requirement?

Yes

10. Compare the lowest cost of owning the home with the cost of renting. Which is less expensive, and by how much?Renting is lower by $5,729.40


11. Compare the cost of buying and leasing a car. Which will be less expensive for the Rushworths during the first year?Leasing is lower by $1,677.60

12. For each lender, give the total amount of money that is needed if both the home and car are purchased.

13. From which lender(s) can the Rushworths get a mortgage loan and still afford to buy a car after making all the required down payments and not spending more than they saved? Lender C

14. Assume the Rushworths do not want to spend more than one-third of their annual gross income on mortgage and car payments. Using the decision table and other data, identify the combination(s) that will come closest to this goal of limiting spending. Explain your answer.

Answers will vary.Any lender with 4-year car loan.Any lender with leasing the car.

15. If you were making this home and car buying decision for the Rushworths, describe what you would do and why.

Answers will vary.

Cheapest is Lender B and leasing the car.

Lender A Lender B Lender C$20,910 $17,510 $15,810

Unit 10, Specific Assessments, Activity 2, Cash Flow Rubric

Cash Flow RecordName: Teacher:

Criteria Points

4 3 2 1

Assignment Completeness

Responses for each day and each

category.

Missing no more than 2 responses.

Missing 3 to 5 responses.

Less than 1/2 of responses

completed.

Accuracy All items are correct.

Most items are correct.

Many items are correct.

Less than 1/2 of all items are correct.

Demonstrated Knowledge

Shows complete understanding of the financial and

mathematical process.

Shows substantial understanding of the financial and

mathematical process.

Response shows some

understanding of the process.

Response shows a complete lack of understanding for

the process.

Requirements

Goes beyond the requirements of the activity, i.e.

provides receipts for all expenses.

Meets the requirements of

the activity.

Does not meet the requirements of

the activity.

LegibilityLegible

handwriting; easy to read.

Marginally legible

handwriting.

Writing is not legible in places.

Writing is not legible.

Total Points

Teacher Comments:


http://www.teach-nology.com/

Unit 10, Specific Assessments, Activity 4, Financial Plan Rubric

Financial Planning PortfolioCATEGORY 3 2 1 0 Points

Binder Divided into required sections. Dividers headed correctly and decorated following theme of section.

Many sections missing. Headings not used correctly. Dividers not decorated.

Financial Goals All six required items are present and complete. Goals are realistic, include measurable terms, have a time frame, include action to be taken. Education timeline is complete and reflects an uncommon depth of understanding.

More than 3 items missing or incomplete. Goals are not realistic. Do not include measurable terms, time frame or action to be taken. Education timeline is missing or incomplete. Reflects a lack of understanding of future goals.

Earnings Potential

All six required items are present and complete. Chosen career and income is clearly stated. Calculations correct.

More than 3 items missing or incomplete. Chosen career and income are not stated. Many errors in calculations.

Automobile All five required items are present and complete. Taken as a whole, reflects an uncommon depth of understanding.

More than 3 items missing or incomplete. Taken as a whole, reflects a lack of understanding.

Housing All nine required items are present and complete. Taken as a whole, reflects an uncommon depth of

More than 5 items missing or incomplete. Taken as a whole, reflects a lack of

Unit 10, Specific Assessments, Activity 4, Financial Plan Rubric

understanding. understanding.

Insurance All four required items are present and complete. All categories are covered: Life, Auto & Health.

More than 2 items missing or incomplete. Category missing.

Investments All 14 required items are present and complete. Work demonstrates superior knowledge of topic.

More than 6 items missing or incomplete. Work demonstrates lack of knowledge of topic.

Banking All four required items are present and complete. All calculations correct.

More than 2 items missing or incomplete. Few calculations correct.

Credit All six required items are present and complete. Work demonstrates superior knowledge of credit.

More than 3 items missing or incomplete. Taken as a whole, reflects a lack of understanding of credit.

Organization Neat, organized information. Easy to read and follow. Outstanding document for future reference.

Unorganized and illegible. Not easy to read or to follow. Understanding of document’s future purpose not evident.

Total PointsRubric adapted from a template found at: http://rubistar.4teachers.org/index.php

http://rubistar.4teachers.org/index.php

formatting blackline masters · web viewthe total credit card price is _____3.4_____% greater, to...

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formatting blackline masters · web viewthe total credit card price is _3.4_% greater, to...