Teacher: Michelle Hochmuth School: N/A
Grade: 12 Economics Time Period: 43 minutes
Unit: Personal Finance Time Frame: 2 days
Lesson Topic: How Much Money Do I Need to Make to Afford My Dream Car?
Lesson Objectives:
- Students will examine data and resources provided in class to estimate costs for a monthly budget.
- Students will hypothesize how their individual choices will affect the larger economy by evaluating effects of family size, credit worthiness, education, and career choices.
New York State Standards:
Standard 4: Economics; Key Idea 2; Performance Indicator 1: Identify, locate and evaluate economic information from standard reference works, newspapers, periodicals, computer databases, monographs, textbooks, government publications and other primary and secondary sources
Standard 4: Economics; Key Idea 2; Performance Indicator 3: Apply a problem-solving model to identify economic problems or issues, generate hypotheses, test hypotheses, investigate and analyze selected data, consider alternative solutions or positions, and make decisions about the best solution or position.
Activities:
1. Students will copy POD into their notebook: Describe what career would most interest you after High School and what education you might need to reach that goal. (3 minutes)
2. In groups of 3 or 4 students will be instructed to come up with a list of monthly expenses they might have as a single man or woman at about age 25. They will need to try and think of every possible expense they may run into as an adult living alone in an apartment. They do not need to come up with how much each expense will cost just yet. (10 minutes)
3. As a group, students will look through the classified ads and decide on a car they would like to purchase. The car cannot exceed $60,000 and the group must come to a consensus for just one car. (10 minutes)
4. Each group will be given a paper, which will include examples of common household expenses. Students will be asked to compare their list of expenses to the budget workout sheet. (5 minutes)
a. Did you miss anything?
b. Did you add anything that was not on the list in the packet?
5. Each group will be given a packet containing rate sheets from local financial institutions and example bills for their common household expenses. As a group, they will determine what their average household expenses will be not including the new car payment. Students will be reminded this budget is currently for one person (meaning only one income, and a single person’s expenses.) (15 minutes)
6. After the expenses have been calculated, students will use a rate calculator formula to determine how much money their dream car will cost. Students must account for the interest rate, compounding interest, and the length of time they will have the loan for the car. Students will then be instructed to add this loan payment to their expenses. (5-7 minutes)
7. On the projector, a website will be up showing common salaries for careers. As a group, students will look up the approximate salary for a career one of them listed in their POB from the previous day. (Website used for Careers and Salaries: http://www.payscale.com/research/US/Country=United_States/Salary) (5 minutes)
8. Students will be given questions to answer as a group related to the impact they have on the economy. (25 minutes)
Assessment: Informal assessment of group work packets.