Compare two debt payoff plans teacher packet

Selected outcome

Managing Credit 12-10c: Create a repayment plan for a person who is having difficulty paying debt.

This is an independent selective correlation, not an official endorsement or a complete curriculum.

Teacher preparation

Open the debt payoff simulator and move the payment with both a pointer and arrow keys.
Share or print the student handout.
Emphasize that students must not enter or disclose personal debts.

Fictional scenario

The simulator supplies three fictional debts: a store card, a credit card, and a car loan. Students compare the same debts first at $500 per month and then at $900 per month.

Checked resources

Debt payoff simulator
Students compare payment budgets and payoff orders.
https://www.financelearn.org/tools/debt-payoff-simulator
Snowball and avalanche comparison
Students distinguish interest cost from early milestones.
https://www.financelearn.org/compare/snowball-vs-avalanche
Debt payoff decision plan
Students convert the comparison into dated checkpoints.
https://www.financelearn.org/plan

Student task sequence

Task 1. At $500 per month, record the payoff months, total interest, and first-debt month for both orders.
Task 2. Repeat at $900 per month. Keep the debts and rates unchanged.
Task 3. Separate the effect of raising the payment from the effect of changing the order.
Task 4. Choose one order for the fictional borrower and defend it with one cost measure and one behavior measure.
Task 5. Write a three-checkpoint plan with a start date, a monthly payment, and a review date.

Teacher key

Task 1. Values must match the live fixed simulation at $500. Students should label which order each number belongs to.
Task 2. Values must match the live fixed simulation at $900 with every non-payment input unchanged.
Task 3. Raising the payment changes the total dollars sent each month. Changing the order changes where the surplus goes while the monthly total stays fixed.
Task 4. Avalanche prioritizes the highest rate and generally reduces interest. Snowball prioritizes the smallest balance and can produce an earlier visible milestone. Either choice earns credit when the evidence is accurate.
Task 5. The plan must name a date, one payment that is at least the displayed minimum floor, and a future date for checking progress.

Four-point evidence check

Award one point for each visible item.

Both payment budgets are recorded for both payoff orders.
Payment-size and ordering effects are separated.
The recommendation uses cost and behavior evidence.
The plan has dated checkpoints and no personal debt information.

Extension

Find the lowest displayed payment where the two orders finish in the same month and explain why interest can still differ.

Ready-to-paste LMS post

Compare two debt payoff plans

Time: 45 minutes
Goal: Use a fixed debt simulation to separate the effect of payment size from the effect of payoff order.

Student handout: https://www.financelearn.org/lessons/debt-payoff-tradeoff/student

Directions:
1. Open the handout and use only its fictional scenario and linked resources.
2. Complete all 5 tasks and show the requested reasoning.
3. Submit the completed handout in the format your teacher names.

Privacy: Do not use personal income, debts, account balances, policy details, names, or identifying information.
No FinanceLearn account is required. Educational material, not financial advice.

Launch links