Car Loan Cash

This key homework is designed to incorporate what you have learnt in lessons this term in an applied situation. The task you have been given is that four people need to purchase a car for different reasons. None of these four have the money readily available to them so they have to take out a loan to finance the car. You have to decide which loan they should take out and which car they should buy based on their income and their credit rating You will have to first create a budget sheet based on the information given to you about the four people to see how much money per month they can afford to spend on repaying a loan You will then have to look at what loan they should take out based on their credit rating and how much money they have available to spend per month. You then need to make a decision on what loan each person should take out to buy their car. You MUST give reasons for this decision. There is not one correct answer, it is open to your own interpretation DATE SET

DATE DUE (or before)

Name: Age:

Name: Age:

Tamsin Long 18

Sadie Latini 24

Background: Left school at 16 with 4 GCSEs Lives with parents. Spends a lot on clothes and clubbing . Job: Trainee Hairdresser

Background: Left university two years ago with a degree in journalism. She is in a shared flat with a friend, stays in during the week, Job:

Journalist

Gross Income:

Gross Income:

£18000

Monthly Outgoings:

£9000 Rent: Travel: Credit card: Mobile phone: Other:

£200 (all in) £30 £25 £30 £45

Monthly Outgoings:

Rent: Bills: Travel: Student loan: Pension: Mobile phone: Other:

£300 £70 £5 £85 £80 £45 £45

Reasons for car: Wants to be more independent, also she’ll be the first from her friends to have one.

Reasons for car: Needs it for work to improve her contact base which will help her to become a better journalist and hence get promoted.

Credit rating: Excellent

Credit rating: Excellent

Name: Age:

Name: Age:

DJ Spinsta 18

Background: Left school at 16 with no qualifications Lives with parents. Spends a lot on music . Job: Part time in record shop Gross Income: Monthly Outgoings:

Michael Thomas 19

Background: Left school with a GNVQ. Lives in a shared house with four friends from college Job:

Journalist

Gross Income:

£12000

£6000 Rent: Travel: Loan: Mobile phone: Other:

£100 £0 £60 £40 £45

Monthly Outgoings:

Rent: Bills: Travel: Mobile phone:

£220 £40 £15 £20 Saving for travelling : £75

Reasons for car: Wants to look the part

Reasons for car: To get around.

Credit rating: Good

Credit rating: Poor

CAR 2

CAR 1

Price:

£500

Price:

£2000

Mileage:

180,000

Mileage:

90,000

Age:

18 years

Age:

12 years

Comment:

Good little runner, drives well and is very reliable. Basic interior.

Comment:

It will get you from A to B. (most of the time)

CAR 4

CAR 3

Price:

£5000

Mileage:

25,000

Age:

6 years

Comment:

Very comfortable car. All the necessities in a hot day, electric windows, air con etc

Price:

£12000

Mileage:

11,000

Age:

2 years

Comment:

Stylish wheels for a stylish life style. This car is set to turn heads as you cruise through the streets with the top down.

Task 2 – Credit Scoring (This will be assessed on the citizenship criteria found on the back page)

What is a credit rating? Where can you find out about it? Why do people have good and bad ratings?

If you need more paper please attach an extra sheet

Task 3 For each car calculate how much you would have to repay at the given interest rate over the given time period

Levels for task 3 If you show that you can calculate a “simple” percentage with the use of the calculator (you still need to show workings) then this will secure a Level 5 If you show that you can calculate a “simple” percentage without the calculator (you will need to show detailed workings of calculations) then this will secure a Level 6 If you show that you can calculate a “compound” percentage with or without the calculator (you will need to show workings of stages of calculations) then this will secure a Level 7/8 TOTAL REPAYMENT Credit Rating

Interest rate

Excellent

8% for 4 years

Excellent

11% for 3 years

Good

15% for 4 years

Good

21% for 2 years

Poor

20% for 5 years

Poor

29% for 3 years

Car 1 (£500)

Car 2 (£2000)

Car 3 (£5000)

Car 4 (£12000)

How much does this work out as a single monthly repayment? MONTHLY REPAYMENT Interest rate Excellent

8% for 4 years (48 months)

Excellent

11% for 3 years (36 months)

Good

15% for 4 years (48 months)

Good

21% for 2 years (24 months)

Poor

20% for 5 years (60 months)

Poor

29% for 3 years (36 months)

Car 1

Car 2

Car 3

Car 4

Task 4 Each person needs to buy a car. To buy a car they must take out a loan You must decide on what car each person can buy. You need to show consideration for their credit rating as well as their disposable incomes

Assessment Criteria

This work will be assessed under three criteria, two mathematics related criteria and one citizenship related criteria. Please read the criteria to ensure that you gain the highest level possible.

LEVEL

3 4 5 6 7/8

MATHEMATICS CRITERIA SECTION 1- NUMBER CRITERIA I have shown that I can add and subtract three and four digit numbers using a written method. I have shown that I can use a calculator to calculate multiple stepped calculations involving the four basic operations. I have shown that I can use a calculator to find percentages of amounts I have shown that I can find percentages of amounts without using a calculator

ACHIEVED

I have shown that I can calculate compound interest MATHEMATICS CRITERIA SECTION 2-USING AND APPLYING

LEVEL

3 4 5 6

CRITERIA I have used the appropriate mathematics processes throughout the project although there may be errors in these processes. I have presented my results in a clear and organised way throughout the whole investigation. All my workings are easy to follow and their purpose is clear I have shown that I can select the appropriate information to carry out the required calculations throughout this project I have presented a concise, reasoned argument and discussed in detail reasoning for my choices of which loan is best for each person

ACHIEVED

CITIZENSHIP CRITERIA LEVEL

1 2 3 4 5

6

CRITERIA I can talk about what a credit rating is. I can talk about the differences between a good credit rating and a poor credit rating I can investigate about what a credit rating is if given the sources to look through I can find my own sources on credit ratings and make comments about what effects they can have I can use different methods and sources of information to explore about credit ratings, find out what others think and draw my own conclusions I can see why people have a range of opinions about credit ratings and I can explain reasons for why people think different things about them.

ACHIEVED