# MA.912.FL.3.5

Compare the advantages and disadvantages of using cash versus personal financing options.

### Examples

Example: Compare paying for a tank of gasoline in the following ways: cash; credit card and paying over 2 months; credit card and paying balance in full each month.

### Clarifications

Clarification 2: Personal financing options include debit cards, credit cards, installment plans and loans.

General Information
Subject Area: Mathematics (B.E.S.T.)
Strand: Financial Literacy
Status: State Board Approved

## Benchmark Instructional Guide

### Vertical Alignment

Previous Benchmarks

Next Benchmarks

### Purpose and Instructional Strategies

In Math for Data and Financial Literacy, students are introduced to the advantages and disadvantages of various financing options for individuals as well as businesses.
• 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.

• 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

Instructional Item 1
• 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.

*The strategies, tasks and items included in the B1G-M are examples and should not be considered comprehensive.

## Related Courses

This benchmark is part of these courses.
1200388: Mathematics for Data and Financial Literacy Honors (Specifically in versions: 2022 and beyond (current))
1700600: GEAR Up 1 (Specifically in versions: 2020 - 2022, 2022 and beyond (current))
1700610: GEAR Up 2 (Specifically in versions: 2020 - 2022, 2022 and beyond (current))
1700620: GEAR Up 3 (Specifically in versions: 2020 - 2022, 2022 and beyond (current))
1700630: GEAR Up 4 (Specifically in versions: 2020 - 2022, 2022 and beyond (current))
1200384: Mathematics for Data and Financial Literacy (Specifically in versions: 2022 and beyond (current))
7912120: Access Mathematics for Data and Financial Literacy (Specifically in versions: 2022 - 2023, 2023 and beyond (current))
2102371: Personal Finance and Money Management (Specifically in versions: 2023 and beyond (current))
2102373: Personal Finance and Money Management Honors (Specifically in versions: 2023 and beyond (current))
2102375: Personal Finance and Money Management for Credit Recovery (Specifically in versions: 2024 and beyond (current))

## Related Access Points

Alternate version of this benchmark for students with significant cognitive disabilities.