Financing Your Business
Starting a business can be a daunting task, but it is also an exciting opportunity for students to explore their entrepreneurial spirit. However, to get a business off the ground, a significant amount of money is often required. This is where financing through loans can be an essential part of the process. Through this activity, we will explore the benefits of compound growth and how it can lead to increased profits for businesses. This activity will also discuss the initial investment amount and growth rate and how these factors can affect the final profit earned.
Another crucial aspect of this activity is discussing how to choose the right loan amount and interest rate for a business. This will include evaluating the loan amount and duration based on the size and scope of the business and determining the appropriate interest rate based on the length of the loan and the overall risk involved.
Storyline: The students will be starting a new business with a starting investment of $30,000. Their goal is to maximize their profits by utilizing compounding for 10 years. In order to achieve higher profits, they may require additional initial capital, which can be obtained through a loan from a fictitious bank named BizBank.
BizBank provides different interest rates for various loan amounts, and the interest rate also varies depending on the length of the loan term. Taking out a loan that is too large may reduce their profit due to the increased interest payments, while a loan that is too small may not provide sufficient initial capital to start the business. The students will engage in worksheet activities to determine the optimal loan amount and duration for their business, ensuring maximum profit at the end of the 10-year period.
This activity will provide students with a practical understanding of financing a business and the factors to consider when taking out a loan. By the end of this activity, students will have a strong grasp of the importance of financing and how it can make or break the success of a business. It will also equip them with the skills necessary to make informed decisions when it comes to financing their own entrepreneurial ventures in the future.
Student Feedback
I will remember that the most amount for a loan is not all ways the best. I have found the way to calculate this and in the future this will save me money.
How to do the math to find the numbers.
I will remember the most that with different loan amounts and over a different period of time can either help or worsen your business's financial situations.
I will remember most that it is important to calculate how big of a loan and how much time to pay the loan back will give your business the maximum profits.
I remember how much you put into your capital affects how much money you make. Although you can be borrowing money for a long time, you need to do some research as to how long you can borrow until it begins to affect you.
The first 3 activites with all the numbers
The sliders
That if I am ever taking a loan out that I need to do key research to decide how long and how much money to take.
The loan calculations
Probably the financing advice.
I remember the assignments i did about the loan duration and the profit you would make off of each duration having the loan out.
Finding the correct loan amount.
How to manage money and how loans work
It helps you learn alot
I will remember if you dont have enough capital with you you can take a loan
they will probably remember loan amount and interest and initial capital because of the first activities.
that the bigger the loan the bigger the interest.
I will remember how if I start a business then I need to plan and do what I am supposed to do. And how I am supposed to calculate before.
I will remember the most from the compound growth as I learned more than I already knew, though I feel like the Loans helping finance a business was not explained well enough in its entirety.
The lesson that it teach's us about the importance of getting all the proper things you need to start your own buisness.
The strategic features of Compound Growth and the recommended money and year amount for loans.
How to calculate loan.
I will remember that the amount of the loan does matter, and the highest isn't the best amount to get to have the largest amount of money, the reason for this is the high-interest rate.
I will remember the interest rate loan amount and duration activity because it was challenging at first, but now i understand it!
I will remember figuring out how to do the loan amount because it was challenging at first.
Filling in the graphs
Compound growth
How easy it was
When getting business loans going for the most years is not always beneficial
how to increase profits from a start-up business
compound growth and interest
