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Determining how down payments affect loans


Students calculate how monthly payments for installment loans change based on the size of the down payment.

Big idea

Installment loans can help people purchase big-ticket items by allowing them to make payments over an extended period of time.

Essential questions

  • How do installment loans help consumers purchase big-ticket items?
  • How does the down payment amount affect monthly payments and total costs for an installment loan?


  • Understand how down payments affect total cost and monthly payment amounts
  • Calculate how down payment amounts change the overall cost of an item as well as monthly payments

What students will do

  • Calculate the amount to be financed to buy a car after a down payment is made.
  • Determine the monthly payment and total cost of a car based on three different down payments.
  • Analyze costs or other factors to determine which down payment to make.
  • Reflect on why they made that decision.

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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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