Financial Literacy Project – Wise Money Management

Goals: To synthesize the concepts learned about financial institutions and services, credit
options, store promotions, loans and savings.
Project Overview: For this project, you will be presenting whatever you learned by typing all
the information out and submitting this word document.
This project will be composed of five parts:
1) List out 10 frequently asked questions (FAQs) about financial institutions and find the
answer online. [8 marks]
2) Research into the advantages and disadvantages of two types of loans. A detailed
description and calculation of the loans should be included. [12 marks]
3) Research into the effects of two types of investments. A detailed description and
calculation of the investments should be included. [12 marks]
4) Bibliography [4 marks]
5) Reflections [4 marks]
* By completing this project fully and correctly, you will receive a maximum of 2% bonus marks
to your overall grade.
Step 1: Start to plan
Brainstorm 10 questions that should be included in your FAQs. You can use the following
questions as guidelines:
 What kind of financial institution should I choose?
 What kind of account should I choose?
 How can I keep my personal and financial information secure?
 How can I use credit effectively?
 What advice can you give about financial institution’s store promotions?
 What kind of financial commitments should I avoid?
 What is the difference between variable/floating and fixed rate?
 What does prime rate refer to? What percentage is the current prime rate?
Your questions should cover the following broad topics: financial institutions, credit options,
store promotions, and loans. You should also include questions on wise money management
and how to avoid debt. If you wish, you can ask your peers/parents what questions they have
about money management.
Use the internet to research answers to your questions. As you research your answers, you may
find more questions to ask. Write answers to each question in your own words. Answers need
to cover the basic facts, but should be no more than a few sentences or a short paragraph.

Make sure you site the sources in the bibliography section!

10 Frequently Asked Questions and the Answers:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

Step 2: Research loan options

The next step in the project is to research different loan options.
Begin by choosing something that you might take out a loan for – for example, a car, a boat, a
computer/laptop, a cell phone or a post-secondary school program. Research the cost for it. Put
all the information below:
Item to purchase: _____________________________
Description of the item (model, specs, etc.):
______________________________________________________________________________
______________________________________________________________________________
Total cost of the item (including taxes): __________________________
Pretend you have graduated and are currently working. How much can you afford to put down
per month (ie. monthly payment) towards the loan? ___________________________
Next, choose two ways a student could borrow money to pay off the cost. Payment options
include taking out a line of credit, personal loan, or using a credit card. You can also choose to
compare variable versus fixed rates for the loan options. However, do NOT compare financing
vs leasing the car. The goal of part 2 is to purchase an item and compare the best way to pay off
the loan with 2 different options/interest rates. For example, what is the interest rate on the
line of credit compared to the credit card? (Note: if you cannot find the specific interest rate
from the bank, simply Google line of credit interest rate as an example for a rough estimation.
Most GICs only offer 5-year rates. Normally, people will have to renew it after the 5 years. For
this exercise, you can choose to use the rate as your 10- or 20-years rates.)

Make sure you site the sources in the bibliography section!

Loans:
*If the interest rate for the loan is hard to find, get a rough estimation from a reliable source
and use that to do your calculations below.
**You must set either the monthly payment the same or the time to pay off the loan the same
in order to better compare the two plans.
***Banks use compound interests for loans. Therefore, calculations must be done with
compound interests in mind. TVM and other online calculators are good tools for this.

Option 1 Option 2
(state the plan and the interest rate) (state the plan and the interest rate)

What is the interest rate for this option? What is the interest rate for this option?
Use the total cost of the item (data from Use the total cost of the item (data from
above) and the amount you plan to pay per above) and the amount you plan to pay per
month (data from above), determine how month (data from above), determine how
long will it take for you to pay off the loan long will it take for you to pay off the loan
given the monthly payment you provided given the monthly payment you provided
above? (Google online loan calculator to help above? (Google online loan calculator to help
you with this calculation. You must show you with this calculation. You must show
how the calculations was done. You have the how the calculations was done. You have the
option to take a screenshot of the calculation option to take a screenshot of the calculation
with the website on it.) with the website on it.)

Which loan option would you recommend students choose? Why?

Step 3: Research investment options

Next, you will research the information needed to inform students about wise investment
strategies and planning for the future.
Choose two types of investment, such as a Guaranteed Investment Certificate or a bank savings
account. You can also choose to invest in mutual funds offered by the banks. Research interest
rates and terms of investment, and calculate the interest earned on two different investments:
 $1200 yearly (ie. $100 monthly) invested for 20 years; and
 $2400 yearly (ie. $200 monthly) invested for 10 years
If students want to save money for the future, would they be better off investing a small
amount of money for a longer term, or a larger amount of money for a shorter term?
Investments:
*Again, if the interest rates for the investments are hard to find, get a rough estimation from a
reliable source and use that to do your calculations below. You can again use the 5-year GIC
rate as your 10-year, 20-year GIC rates.
**Your end results should be greater than $24000 since $1200 yearly deposit for 20 years
implies that one puts in $1200 for year 1, another $1200 for year 2, and so on until the 20 th year
($1200 x 20 = $24000).
***Banks use compound interests for investments. Therefore, calculations must be done with
compound interests in mind. TVM and other online calculators are good tools for this.

Option 1 Option 2
(state the plan and the interest rate) (state the plan and the interest rate)

$1200 yearly deposit (or $100 monthly $1200 yearly deposit (or $100 monthly
deposit) invested for 20 years deposit) invested for 20 years

[provide the calculation] [provide the calculation]

versus versus

$2400 yearly deposit (or $200 monthly $2400 yearly deposit (or $200 monthly
deposit) invested for 10 years deposit) invested for 10 years
Hint: Google future value calculator to help Hint: Google future value calculator to help
you with the calculation. The future value you with the calculation. The future value
calculator must allow you to input periodic calculator must allow you to input periodic
deposit amount into it. Again, you must show deposit amount into it. Again, you must show
how the calculations was done. how the calculations was done.

[provide the calculation] [provide the calculation]

If students want to save money for the future, would they be better off investing a small
amount of money for a longer term, or a larger amount of money for a shorter term? Explain
your choice by using the calculations above.

Make sure you site the sources in the bibliography section!

Step 4: Bibliography
Make sure your bibliography is complete. (If you want, you can do it according to APA style.)
Step 5: Reflections

1. Describe your feelings about working on this project. Did you enjoy it?
How long did it take you to complete it?

2. What was the hardest part about working on this project? Explain.

3. List some of the things you learned while working on this project.

4. Were you satisfied with your final project? Elaborate.

5. What personal strengths did this project bring out in you? Elaborate.

6. If you had to do the project over again, what would you do differently?
Explain.
Project Rubric **Plagiarism will result in a mark
of 0**

Emerging (1) Developing (2) Proficient (3) Extending (4)

Step 1 – 10 Questions are Some questions Most questions All questions are
FAQs poor and are poor and are answered applicable and are
(Total: 8 irrelevant. irrelevant. clearly and answered clearly
marks) Answers are One or two logically with and logically.
either incorrect sentences per some Explanations are
or unclear. answer. explanations thorough with
provided. examples provided.
Steps 2 – Loans Solution contains Solution is missing Solution is Solution is
mostly irrelevant essential appropriate to reasonable and
(Total: 12 or incorrect calculations or context but may appropriate to
marks) calculations. contains major contain minor context.
errors. errors.
Reasoning or Reasoning or
justification of Reasoning or Reasoning or justification of
solution is absent justification of justification of solution is
or fundamentally solution is partially solution is complete and
incorrect. complete; or complete. comprehensive.
solution may not
be reasonable in
context.
Step 3 – Solution contains Solution is missing Solution is Solution is
Investments mostly irrelevant essential appropriate to reasonable and
(Total: 12 or incorrect calculations or context but may appropriate to
marks) calculations. contains major contain minor context.
errors. errors.
Reasoning or Reasoning or
justification of Reasoning or Reasoning or justification of
solution is absent justification of justification of solution is
or fundamentally solution is partially solution is complete and
incorrect. complete; or complete. comprehensive.
solution may not
be reasonable in
context.
Step 4 – Bibliography is Bibliography is Bibliography is A thorough and
Bibliography incomplete, or completed to a completed with detailed
(Total: 4 minimal effort is satisfactory few sources bibliography is
marks) made. degree with 2 – 3 missing. provided with at
sources provided. least 5 sources
sited.

Step 5 – Reflection is Reflection is Reflection is A thorough

Reflection incomplete, or completed to a completed reflection is
(Total: 4 minimal effort is satisfactory adequately. provided.
marks) made. degree. One or Details/examples Details/examples
two sentences per are included. are included.
answer. Answers do not
seem rushed.

Final mark: /40

*No response from each section will result in a score of 0.