| Course | MT421 Financial Planning |
|---|---|
| Unit | Unit 5 |
| Paper type | Debt repayment plan |
| Length | About 1,010 words, 6 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT421 Unit 5
Same Budget, Two Orders: An MT421 Unit 5 Debt Repayment Plan Testing Avalanche Against Snowball
[Student Name]
Purdue University Global
MT421: Financial Planning
Unit 5 Debt Repayment Plan
[Instructor Name]
[Date]
Kayla Brooks and her debts are a composite carried from Unit 3; payoff dates and interest come from the month-by-month script described, and the sources cited are real.
The Debts
Kayla's five debts come from the September 30 statement in Unit 3, listed here from the highest rate down. Owed to the furniture store card: $1,240, charged 29.99 percent, minimum $40. Owed on the Visa: $4,860, charged 26.24 percent, minimum $146. Owed on the personal loan: $2,900, charged 13.9 percent, required $120. Owed on the car: $11,300, charged 7.4 percent, required $318. Owed on federal student loans: $18,600, charged 5.5 percent, required $221. Her required monthly payments come to $845.
The Money Committed
The plan commits the $845 of minimums plus the $250 surplus from the revised budget in Unit 2, a total of $1,095 a month. When a debt is paid off, its minimum does not return to spending; it rolls into the next target. The total stays at $1,095 until the last balance is gone.
Assumptions Written Out
Four assumptions apply to both orders. Interest accrues monthly on each balance at its stated rate divided by 12. Minimum payments stay at their current amounts rather than shrinking as balances fall, which is how the car and student loans work and a choice Kayla makes on the cards. No new charges are added to any account. Payments arrive on time, so no penalty rates apply. Breaking any of these changes the results, and the third is the one most likely to break, which is why the plan includes a reserve.
The Two Orders
Under the avalanche order, money beyond the minimums chases the steepest rate: store card, Visa, personal loan, car loan, student loans. The snowball order sends it to the smallest balance first: store card, personal loan, Visa, car loan, student loans. Kayla's store card is both her smallest balance and her highest rate, so the orders agree on the first target and differ only on the second.
Results
Under both orders, the store card is gone in month 5. Under the avalanche, the extra money then goes to the Visa, which is cleared in month 17; the personal loan follows in month 20, the car loan in month 27 and the student loans in month 41. Under the snowball, the personal loan is cleared first, in month 11; the Visa follows in month 20, the car loan in month 27 and the student loans in month 41.
Total interest is $5,512 under the avalanche and $5,739 under the snowball, a difference of $227. Both orders finish in the same month because the last two targets, the car and student loans, are the same in each.
The snowball buys an earlier win in month 11 and charges about $227 for it.
A third line on the chart shows what happens if Kayla pays only the minimums and lets each freed payment return to spending. The last balance, the student loans, would take 107 months, nearly nine years, and total interest would be $12,070. Either plan saves over $6,300 against that path and finishes more than five years sooner.
The Recommendation
The plan recommends the avalanche order. The arithmetic favors it, and for Kayla the usual argument for the snowball is weaker than usual. In the debt settlement data Gal and McShane (2012) studied, clients who paid off whole accounts early went on to clear their full balances more often, which supports paying small balances first for motivation. Kayla gets that early win under either order, because the store card closes in month 5 regardless. The second win under the avalanche, the Visa in month 17, also removes the account that had been growing.
The behavioral risk is still real. Amar et al. (2011) found that people tend to spread repayments toward small balances even when it costs them, which suggests Kayla may be tempted to switch to the personal loan once the store card is gone. The safeguard is a written payment schedule, taped inside a kitchen cabinet, showing each month's payment to each account and the month each balance will reach zero. Each closed account gets crossed out, so progress stays visible even during the long stretch on the Visa.
Why the Student Loans Are Treated Differently
The federal student loans carry the lowest rate and come last in either order, but they also differ in kind from the other debts. Federal loans offer payment options tied to income, forbearance in hardship and, in some cases, forgiveness programs that card debt never offers. Soll et al. (2013) describe how often consumers misjudge the cost and terms of what they owe, and lumping these loans in with the cards would be one more case of it. For that reason the plan pays only the required amount on the student loans until every other debt is gone, and it does not recommend refinancing them into a private loan, which would give up those protections for a small rate saving.
The Missing Piece: A Reserve
A plan that sends every spare dollar to debt has nothing left for a surprise, and one car repair charged back to the Visa would undo months of progress. Kayla keeps $2,400 in savings, and the plan treats that as a floor: it is never used for extra debt payments. Whether $2,400 is enough is a question the Unit 6 seminar will test.
The Script
The appendix contains a 40-line Python script that loads the five debts, applies the four assumptions and loops month by month, accruing interest, paying minimums, sending the extra to the first open debt in the chosen order and recording the month each balance reaches zero. It prints a payoff table and the totals for each order. The same script, with the shock and pause options set, produces the reruns for Unit 6.
References
Amar, M., Ariely, D., Ayal, S., Cryder, C. E., & Rick, S. I. (2011). Winning the battle but losing the war: The psychology of debt management. Journal of Marketing Research, 48(SPL), S38-S50. https://doi.org/10.1509/jmkr.48.SPL.S38
Gal, D., & McShane, B. B. (2012). Can small victories help win the war? Evidence from consumer debt management. Journal of Marketing Research, 49(4), 487-501. https://doi.org/10.1509/jmr.11.0272
Soll, J. B., Keeney, R. L., & Larrick, R. P. (2013). Consumer misunderstanding of credit card use, payments, and debt: Causes and solutions. Journal of Public Policy & Marketing, 32(1), 66-81. https://doi.org/10.1509/jppm.11.061
Reading the MT 421 Unit 5 instructions
Unit 5 asks students to build a repayment plan for a client with several debts and to compare at least two strategies. Instructors expect the debts listed with balance, rate and minimum, and the total monthly payment stated. The comparison is fair only when that total is the same for every strategy, with freed minimums rolled into the next target. Assumptions should be written out, including whether minimums change, whether new charges stop and how interest is calculated. Results should give payoff dates for each debt, not just the final month, plus total interest. The recommendation should weigh both the arithmetic and the behavioral argument. Most prompts also expect some emergency reserve and attention to how federal student loans differ from card debt.
Inside the MT421 Unit 5 example
The sample lists the five debts from the Unit 3 statement, highest rate first, and states the $1,095 commitment and the rollover rule. Four assumptions follow. The two orders are defined, noting that the store card leads both because it is smallest and costliest at once. Results give every payoff month under each order and the $227 interest difference, under a highlighted line on what the snowball's early win costs. A minimum-only path shows the size of the decision. The recommendation draws on Gal and McShane for the value of early wins and Amar and colleagues for the pull toward small balances, and adds a schedule taped in the kitchen. Student loans get separate treatment, citing Soll and colleagues, and a final section describes the script.
Where the points sit in the MT421 Unit 5 rubric
Debt plans are typically marked on a fair comparison, stated assumptions, complete results and a recommendation that weighs evidence. Holding the total payment constant is the control graders check first. Rubrics reward payoff dates for every debt, since they show how the strategies differ in practice. Credit goes to assumptions written out, because unstated ones make results impossible to verify. A recommendation resting only on interest, or only on motivation, usually loses depth points. Keeping an emergency reserve shows judgment. Treating federal student loans differently from card debt, with a reason, earns credit many papers miss. Points also go to a reproducible method, readable tables or charts, and APA 7 citations of the research used.
MT421 Unit 5 help from the desk
The most common weak plan gives each strategy a different payment, which decides the comparison before it begins. Another frequent error lists total interest without payoff dates, hiding how the orders differ month to month. Students often leave out the reserve, so the first surprise goes back on a card. Some plans recommend the snowball or avalanche from a rule of thumb without showing their own figures. Student loans are often treated like card debt or refinanced without mentioning the protections a private loan gives up. Before submitting, add the payments in any one month of your schedule. If the total is not the amount you committed, money is leaking somewhere, and the comparison is not fair.
Get an MT421 Unit 5 example written to your instructions
Debts, rates and the monthly budget from your case are the inputs; back comes a first custom MT421 repayment plan comparing both strategies, free, by script or spreadsheet, with every assumption written out against your rubric. Allow 24-48h. A consolidation loan or balance transfer offer in the Unit 5 prompt gets priced alongside. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More MT421 papers and BS in Business Administration samples
- MT421 Unit 1: Opportunity Cost Board Post
- MT421 Unit 2: Personal Budget Analysis
- MT421 Unit 3: Net Worth Statement
- MT421 Unit 4: Time Value Problem Set
- MT421 Unit 6: Seminar Reflection
- MT421 Unit 7: Rent Versus Buy Analysis
- MT421 Unit 8: Income Tax Estimate
- MT421 Unit 9: Retirement Savings Projection
- MT421 Unit 10: Personal Financial Plan
- MT400 Unit 5: Process Performance Indicator Set
- MT382 Unit 5: Masonry Labor Productivity Analysis
- MT381 Unit 5: Critical Path Method Calculation
MT421 Unit 5 questions, answered
Which is better, avalanche or snowball?
With the total payment held constant, paying the highest rate first costs the least interest in almost every case. Paying the smallest balance first often closes accounts sooner, which some people find easier to sustain. Your paper should show both figures for its case and argue which matters more for that person, rather than declaring one universally right.
Do I need to write code for the comparison?
No. A spreadsheet with one row per month and a column per debt does the same job, and many sections expect exactly that. The sample uses a short script because it makes the single difference between the methods, the order of targets, easy to see. Whatever tool you use, show the monthly logic and the assumptions.
Should the plan pay debt before saving anything?
Most MT421 prompts expect some emergency reserve kept in place, because a plan with no cushion sends the next surprise straight back to a card. How large that reserve should be depends on the case. State the amount your plan protects and why, and show that the debt payments still fit around it.
Where can I find a free MT421 Unit 5 sample paper?
You can read the complete MT421 Unit 5 debt repayment plan here, comparing avalanche and snowball for five debts on a fixed $1,095 a month.
Why do both orders in the MT421 Unit 5 sample finish in the same month?
The car loan and student loans are the last two targets under each order, so the final payoff lands in month 41 either way.