Category Archives: Excel activities

Question: What’s The Implied Interest Rate On Rent-To-Own Merchandise?

This Consumer Reports video got me thinking about how this question can be structured as an activity to develop your students’ comparison shopping and Excel skills.  Here’s the video:

First, let’s get the comparison shopping out of the way.  I chose this washer-dryer pair advertised at one of the leading rent-to-own companies:

Screen Shot 2015-07-10 at 3.29.07 PMHow much would the washer-dryer pair cost if you could buy it upfront at this retailer?

Note the everyday low price noted on the top right (or Cash Price at bottom center) of $1,424.98.  I wanted to see how that might compare if you tried to buy the same Maytag Centennial Washer and Dryer at a “big box” retailer.  After a 30 second Google search, I came up with the following costs at one retailer:

Assuming that figures for rent-to-own and “big box” exclude taxes and delivery, the “big box” cash cost of $1,097 is 23% less than the cash cost at the rent to own.  Why is this important?  It shows that the rent-to-own customer is starting out with a handicap as they will be renting an item at an already inflated price.

What is the implied interest rate with the rent-to-own model, using the data for this washer-dryer pair? Continue reading

A Tale of Two Credit Scores: A Case Study

I have been working on a case study to help students understand credit scores.  Let me know what you think about my draft. Contact me at tim@nextgenpersonalfinance.org if you have any comments or just want the answer key:

A Tale of Two Credit Scores: A Case Study

Staring at the two student files on your desk, you know that you only have a few minutes to review them before your afternoon meetings. Your role as peer financial advisor provides you not only with the opportunity to help others but also has deepened your understanding of so many personal finance topics. Both students have come to you with one simple request: teach me how to increase my credit score. As more financial institutions have freely shared credit scores with their customers, you have seen interest in this topic grow.   Continue reading

Activity Idea: How To Save $100,000 By the Time You Turn 30

I saw this headline in the USA Today and expected something other than a listicle with 10 ways to get to $100K by 30 (including advice such as “go to a cheap school” or “avoid credit card debt.”).  I thought this would be a great question that would enable students to flex their Excel (or Google Sheets) muscles to figure out how they could get there.

Here is link to the spreadsheet.  Remember to have students copy the spreadsheet before completing the activity.  As a teacher, you can modify the spreadsheet based on the Excel skills of your students. The base version has all of the formulas already added. Students have three key assumptions to play with: Continue reading

What If The NBA Legend Who Blew Through $154 Million Had A Savings Plan?

Time has a recent article claiming that NBA star Allen Iverson is broke (which he denies):

Poor Allen Iverson: the 11-time NBA All-Star, who earned over $154 million during his 15-season career, is reportedly in deep financial trouble.

I thought it would be fun to take a look at his salary (excluding his endorsement history) and have students run a few scenarios (using Excel) assuming that Allen put in a “pay yourself first” process and saved a certain percentage of his earnings, invested them in a “boring” S&P500 fund which could focus his mind on playing basketball.

First his salary history (from Basketball Reference): Continue reading