So How Much Are You Really Paying for that Loan?


Students learn what a payday loan is and the high cost involved in using such a loan. They work in groups to calculate the cost of loans at given annual percentage rates (APRs). As an assessment, students select four scenarios involving payday lending, offer reasons why payday loans might not be the best alternative, and suggest other options for financing what the individuals the want.

Objectives

Students will
  • define loan, payday loan, interest, interest rate, and annual percentage rate;
  • calculate annual percentage rates; and
  • explain key facts regarding payday loans.

Time Required

60 minutes

Concepts

  • Annual percentage rate (APR)
  • Interest
  • Interest rate
  • Loan
  • Payday loan

Whiteboard (ActivInspire/flipchart)
PowerPoint (pptx)

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Categories Borrowing Money, Credit, Debt Tags , , , , , ,

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