1. Given Helen’s three sources of debt, which is likely to carry the highest APR and which is likely to carry the lowest APR?
2. Which of these debts should she consider paying off first? Why?
3. Helen has to decide whether it is best to use these funds for debt repayment or investment. What factors should she take into consideration?
4. Are there special strategies she should consider with regard to her student loan?
Helen received a $5,000 cash gift from her grandparents as a graduation present. She has no immediate need for these funds. Therefore, she plans to either invest the funds or use them to reduce some of her outstanding debt. Her debt includes an outstanding balance on her credit card, a used car loan, and a student loan. All of these loans are at current average market rates.