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Calculating loan payments


Using a case study, students explore how the amount borrowed, interest rates, and the term of a loan can increase or decrease the amount of loan payments.

Big idea

The amount of an installment loan payment amount is the result of several factors.

Essential questions

  • How do principal, interest rate, and loan term affect loan payments?
  • What criteria do you use to compare loan offers to get the best deal?


  • Make informed choices about credit offers
  • Calculate monthly payments for loans based on principal, interest rate, and loan term

What students will do

  • Calculate and analyze how monthly payments on a loan change based on the principal, interest rate, and term.
  • Compare borrowing options to identify the best deal.
  • Reflect on ways to reduce the amount owed on a loan.

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Teacher guide


Student materials


Note: Please remember to consider your students’ accommodations and special needs to ensure that all students are able to participate in a meaningful way.

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