I. Activating Prior Knowledge
Spend a few minutes reviewing the terms: capacity, collateral, character, credit, and interest rate. Read the scenario below and think about how these terms apply:
Peter and May Wang have a problem, especially on Friday nights. They have only one television set for a family that consists of themselves, their three children, and Mrs. Wang's mother. Many a night, there is a quarrel about who gets to watch what program. The Wangs agree that buying another TV set might be a solution. A local discount store is offering a 52 inch, big-screen stereo TV set, with 3-D, universal remote, close captioning, and parent-block for $999, which is 25% off the standard price.
The problem is that the Wangs cannot afford to pay $999 out of their bank account. It is not in their monthly budget. Should they get the TV set anyway by purchasing it on credit - by buying it now and paying for it later? Or should they consider a cheaper set for which they do have the cash?
What advice and factors should be taken into consideration?
II. Reading the Text
In order to better understand credit and how it works, you need to read the following on-line articles:
III. Personal Reflection
In your post, answer the following questions:
IV. Peer Reflection
Select one student's response, and critique their answers to all of the questions. Did they leave out some important factors? When you select a response to critique, make sure that you select a student's whose response has not previously been critiqued.
Spend a few minutes reviewing the terms: capacity, collateral, character, credit, and interest rate. Read the scenario below and think about how these terms apply:
Peter and May Wang have a problem, especially on Friday nights. They have only one television set for a family that consists of themselves, their three children, and Mrs. Wang's mother. Many a night, there is a quarrel about who gets to watch what program. The Wangs agree that buying another TV set might be a solution. A local discount store is offering a 52 inch, big-screen stereo TV set, with 3-D, universal remote, close captioning, and parent-block for $999, which is 25% off the standard price.
The problem is that the Wangs cannot afford to pay $999 out of their bank account. It is not in their monthly budget. Should they get the TV set anyway by purchasing it on credit - by buying it now and paying for it later? Or should they consider a cheaper set for which they do have the cash?
What advice and factors should be taken into consideration?
II. Reading the Text
In order to better understand credit and how it works, you need to read the following on-line articles:
III. Personal Reflection
In your post, answer the following questions:
- What is credit?
- How does credit work?
- When creditors look at making a loan, they look for the three c's - capacity, collateral, and character. Using these terms, would you issue credit to the Wangs? What factors would you need to take into consideration?
- Should people use credit? Explain your response using vocabulary from the lesson.
IV. Peer Reflection
Select one student's response, and critique their answers to all of the questions. Did they leave out some important factors? When you select a response to critique, make sure that you select a student's whose response has not previously been critiqued.
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