Connecting Benchmarks/Horizontal Alignment

• MA.912.FL.3.9 
• MA.912.FL.4.3

Terms from the K-12 Glossary

Vertical Alignment

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Purpose and Instructional Strategies

• Instruction includes comparisons between cash purchases and purchases using debit cards, credit cards, installment plans or loans. The table below has some example comparisons of advantages and disadvantages for purchasing options. 
  
  
  
  

• Most credit cards charge interest to the average daily balance of the account over the billing period. Students analyzing the cost of purchasing larger items with a credit card will need to factor other items that may be purchased with the credit card into account when analyzing repayment calculations.

Common Misconceptions or Errors

• Depending on the terms of a loan or credit card, students may need to convert the APR into a monthly or daily interest rate. Be sure to have students double check the terms of the finance option before beginning calculations.

Instructional Tasks

• Hugo wants to purchase new carpet for multiple rooms in his house. The cost of the carpet and installation is estimated to be $8,200. Hugo considers three purchasing options:
  1) purchasing the carpet with cash from his savings account (current savings balance: $10,000);
  2) purchasing the carpet with a credit card that has 26.99% APR for purchases and paying it off over 12 months; and
  3) using an installment plan that requires a 20% down payment and monthly payments of $389.77 for 18 months. Discuss the advantages and disadvantages of each option.

Instructional Items

• Deshawn is considering buying a new TV for his home. Describe one disadvantage of using an installment plan for the purchase rather than using cash.