Choosing the Best Deal for a Loan (100 pts.) 
(Activity 2.4 & 2.5 Extension Activity) 

1.	Jesse has his eye on a used truck.  Of the many options that are available, which do you think is the better deal if he borrows $10,000?  

Use the online “loan amortization” calculator to determine what the loan payments will be each month, the interest that will be paid etc. in each of the given scenarios.  Use this to determine which is the “best” deal and why.  *Be sure to copy/paste a screen shot of the amortization table into this document for each example AND list the monthly loan payment (principal + interest) for an additional 5 points.

a.	5.5% APR payable in 3 years (15 pts.)

b.	6.5% APR payable in 4 years (15 pts.)

c.	3.5% APR payable in 2 years (15 pts.)

2.	Mariah has her eye on a used sedan.  Of the many options that are available, which do you think is the better deal if she borrows $8,000?  

Use the online “loan amortization” calculator to determine what the loan payments will be each month, the interest that will be paid etc. in each of the given scenarios.  Use this information to determine which is the “best” deal and why.  *Be sure to copy/paste a screen shot of the amortization table into this document for each example AND list the monthly loan payment (principal + interest) for an additional 5 pts.

a.	5.5% APR payable in 3 years (15 pts.)

b.	6.5% APR payable in 4 years (15 pts.)

c.	3.5% APR payable in 2 years (15 pts.)

In conclusion, the “best” deal really all depends. If you don’t have that much money, perhaps a long-term loan might be a better situation if you think you can commit yourself to the payments and afford them. However, it might be better if you can just get the load off your chest by paying the whole thing as quickly as possible, especially if you have the means at your disposal. I think that for Jesse, the bargain of 3.5% APR payable over 2 years would be the best deal for him. I also think that for Mariah, the 3.5% APR payable over 2 years would be the best deal for her as well.