Buying your Car Project

[Pages:3]Buying your Car Project

INTRODUCTION

You are going to buy a car that will need to be financed. You will need to look at different options and decide which will be the best choice for your situation. Your relative has given you $5,000.00 for a down payment to buy a car. You cannot finance more than $45,000.00 to try to make this project reality.

You will need to find an advertisement for a car that you would like to purchase. You will hand in a report that details your findings.

TASK

In this lesson you will work to use economic concepts and mathematical calculations in deciding, hypothetically, what car to buy and how to finance the purchase, and experience this real-life application.

PROCESS

1. Find an advertisement for a car that you would like to purchase. Remember to look at different options and discuss with other students or teacher which car will best suit your needs in your present situation. For the cars you consider, use "Edmunds Car Buying Guide "or "Kelly Blue Book " to learn how the advertised prices compare with market prices generally for cars of the same make, year, and model.

2. Once you have found the automobile of your choice and have determined the amount you will be spending on the car, you need to calculate the monthly payment. The "Loan Calculator " at , may be helpful in calculating the monthly payments according to the amount of borrowed principal.

Calculate the monthly payment for your car for each option below using the monthly payment calculator. Then you need to fill out 3 months amortization schedule for each loan (9 total months). Make sure you show all your work (like we did in class) and type your Amortization Schedule in an Excel Spreadsheet. You will also need to calculate the final amount you would have to pay for each of the three loans and show you work for that.

Loan I II III

Interest Rate 4.5% 4% 3.5%

Length in Years 5 4 3

Buying your Car Project

3. Provide a word processed summary of your project. Tell what you think your best loan option would be, and justify that conclusion. Include mathematical reasoning behind this conclusion from your findings. Also, discuss what situations might make you decide not to take each of the following:

The lowest interest rate The smallest monthly payment The shortest time The loan with the lowest cost

As part of your written summary, include what you have learned from this project.

4. Final Report! The following information must be included in your final report:

Evaluation sheet An ad for the car of your choice Monthly payments for each option calculated by using the monthly payment formula in

an Excel Spreadsheet and all work shown (neatly handwritten). Total cost of the loan for each option (monthly payment multiplied by number of

payments-neatly handwritten). A word processed summary of which is the best loan option for your situation along with

a justification of why. A summary of what you learned from this project should be included in the written summary (needs to be 200 words or more)

CONCLUSION

After completing this lesson, you will have an understanding of the process and cost of buying an automobile via financing.

Buying your Car Project

ASSESSMENT ACTIVITY

Self Evaluation Rubric: A rubric that will be used to evaluate your project.

Name:______________________

Date:______________

Self Evaluation Rubric

Before turning in your project make sure that you have completed and attached everything that is required in the project. This is a similar rubric that will be used to grade your project.

_____ Car ad included (5 pts) _____ 3 different monthly payments and the total of 9 months Excel Spreadsheet Amortization Schedule computed correctly (30 pts) _____ Total cost of loan correctly computed for each case (10 pts) Word Processed Summary _____ Best loan option picked and decision justified (30 pts) Situations Discussed _____ Lowest interest rate? (5 pts) _____ Smallest monthly payment amount? (5 pts) _____ Shortest time? (5 pts) _____ Lowest cost? (5 pts) Overall Presentation

_____ Spelling, grammar & neatness (5 pts) Total points 100 points Total points earned __________

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