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Car Loan Case Study

The document describes a math project where a student must calculate the costs of taking out an auto loan versus saving up to buy a vehicle. They are instructed to select a vehicle, find bank loan and savings rates, and complete worksheets to compare the loan and savings options over time. They then must discuss their findings with a friend or family member.

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Poline Pauline Kitili
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129 views36 pages

Car Loan Case Study

The document describes a math project where a student must calculate the costs of taking out an auto loan versus saving up to buy a vehicle. They are instructed to select a vehicle, find bank loan and savings rates, and complete worksheets to compare the loan and savings options over time. They then must discuss their findings with a friend or family member.

Uploaded by

Poline Pauline Kitili
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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MATH 108X - Savings & Loans Project (Vehicle Option)

#1

#2

#3

#4

#5A,B

#6

Summarize your discussion with your friend or family member here...


be sure to write about all four points listed below.

1. Explain which option (saving first or taking out the loan and buying
now) that you think is better for you and why.
Summarize your discussion with your friend or family member here...
be sure to write about all four points listed below.
1. Explain which option (saving first or taking out the loan and buying
now) that you think is better for you and why.

Type your answer here...

2. Summarize your discussion with your friend or family member,


including their insights on your project.
Type your answer here...

3. Describe any lessons you have learned in understanding debt and


savings plans.
Type your answer here...

4. How might you apply or teach others about these ideas in your
future?
Type your answer here...
MATH 108X - Savings & Loans Project (Vehicle Option)
Project Goal: To see how interest works against you when you take out a Loan and how it
works for you when you Save.

Select a car to "consider for purchase."


Enter the requested information about the vehicle (see Column M).

Use your own bank, or a typical value of what banks usually offer for savings account
interest rates and loan terms and rates.
Enter the requested information about the bank rates (see Column M).

Complete the "Loan Side" of this worksheet.

Complete the "Savings Side" of this worksheet.

Complete the summary cells on both the "Loan Side" and the "Savings Side" of this
worksheet.

Discuss this project with a friend or family member. Show them the car you are
considering for purchase. Explain how much you would end up paying if you (1) took
out the loan and (2) if you saved for it first. Explain which option you think is better for
you and why. Talk about the consequences of missing one month of payments under each
option.

Summarize your discussion with your friend or family member below. Be sure to write
about ALL four points below.

Summarize your discussion with your friend or family member here...


be sure to write about all four points listed below.

1. Explain which option (saving first or taking out the loan and buying
now) that you think is better for you and why.
Summarize your discussion with your friend or family member here...
be sure to write about all four points listed below.
1. Explain which option (saving first or taking out the loan and buying
now) that you think is better for you and why.

Type your answer here...

2. Summarize your discussion with your friend or family member,


including their insights on your project.
Type your answer here...

3. Describe any lessons you have learned in understanding debt and


savings plans.
Type your answer here...

4. How might you apply or teach others about these ideas in your
future?
Type your answer here...
n) If you don't have a vehi
you can use one of the

#3
Loan Side Vehicle Sale Price

Sales Tax
On this side you will compute the cost of taking out a
loan to buy the car of your choice. Down Payment

Loan Amount

#5A APR

Loan Term (months)

You Paid $ 18,556.80 Monthly Payment


Car Cost $ 18,900.00 Total Payments
Wasted Money $ (304.80) Total Interest
Hover the mouse over the triangles for help.
Loan Amortization Schedule Payment to Bank = $386.60
Month Beginning Balance To Interest To Principal
1
2
3
4
5
Hint
If you don't have a vehicle in mind already,
you can use one of these links to find one:

#1
Enter your Vehicle Information here.

Make: Honda Model: Accord


$ 17,500.00 Year: 2019 Mileage: 30,000
8%
$ 2,000.00
$ 17,820.00
4
48
$386.60
$ 18,595.20
$ 775.20
over the mouse over the triangles for help.

Ending Balance

#2
Loan Details

Loan Term (years): 5


Loan Interest Rate: 3.84%

Savings Account Details

Savings Interest Rate: 1.20%

Typical Loan Rates and Terms


New Car Used Car
3-Year Loan 3.15% 3-Year Loan 2.89%
4-Year Loan 3.49% 4-Year Loan 3.05%
5-Year Loan 3.84% 5-Year Loan 3.52%
6-Year Loan 4.28% 6-Year Loan 3.68%

Typical Checking and Savings Account Rates


Checking 0.1% Savings 1.2%
#4
$ 17,500.00 Vehicle Sale Price Savings Side
8% Sales Tax
On this side you will save first, then buy. Is the
$ 1,400.00 Purchase Amount wait worth it? You decide.
$ 5,000.00 Previous Saved

1.20% APR

24 Savings Term (months)

$0.73 Monthly Payment $ 17.52


$ 5,017.52 Total Payments $ 17,500.00
$ (12,482.48) Total Interest $ 61.57
Hover the mouse over the triangles for help.
Savings Amortization Schedule Payment to Savings= $0.73
Month Beginning Balance Interest Earned Payment
1
2
3
4
5
Savings Side
e you will save first, then buy. Is the
it? You decide.

#5B
You Paid

Car Cost

Earned Money

Ending Balance

Hint
Spring 2023
1
MATH 108X - Savings & Loans Project (Vehicle Option)

#1

#2

#3

#4

#5A,B

#6
MATH 108X - Savings & Loans Project (Vehicle Option)
Project Goal: To see how interest works against you when you take out a Loan and how it
works for you when you Save.

Select a car to "consider for purchase."


Enter the requested information about the vehicle (see Column M).

Find a bank on the internet that shows their interest rates for both auto loans and savings
accounts.
Enter the requested information about the bank rates (see Column M).

Complete the "Loan Side" of this worksheet.

Complete the "Savings Side" of this worksheet.

Complete the summary cells on both the "Loan Side" and the "Savings Side" of this
worksheet.

Discuss this project with a friend or family member…


0

tion)

Errors Remaining: 59
Number Correct: 12

Loan Side Vehicle Sale Price

Sales Tax

Down Payment

Loan Amount

#5A APR

Loan Term (months)

You Paid ERROR Payment


Car Cost ERROR Total Payments
Wasted Money ERROR Total Interest

Loan Amortization Schedule Payment = $386.60


Month Beginning Balance To Interest To Principal
1 ERROR ERROR ERROR
2 ERROR ERROR ERROR
3 ERROR ERROR ERROR
4 ERROR ERROR ERROR
5 ERROR ERROR ERROR
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0 0 0 0
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0 0 0 0
0 0 0 0
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0 0 0 0
0 0 0 0
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0 0 0 0
0 0 0 0
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0 0 0 0
0 0 0 0
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0 0 0 0
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#1
Enter your Vehicle Information here.
#3 Make: Correct Model: Correct

Correct Year: Correct Mileage: Correct

ERROR
Correct
ERROR
ERROR
ERROR
ERROR
ERROR
Correct

Ending Balance
ERROR
ERROR #2
ERROR
Loan Details
ERROR
ERROR Loan Term (years): Correct
0 Loan Interest Rate: Correct
0
0
0
Savings Account Details
0
0 Savings Interest Rate: Correct
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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0
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0
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0
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0
0
0
0
0
0
0
0
0
0
0
0
#4
Correct Vehicle Sale Price Savings Side
ERROR Sales Tax

ERROR Purchase Amount

ERROR Previous Saved

Correct APR

ERROR Savings Term (months)


You Paid
ERROR Payment ERROR
Car Cost
ERROR Total Payments ERROR
Earned Money
ERROR Total Interest ERROR

Savings Amortization Schedule


Month Beginning Balance Interest Earned Payment Ending Balance
1 ERROR ERROR ERROR ERROR
2 ERROR ERROR ERROR ERROR
3 ERROR ERROR ERROR ERROR
4 ERROR ERROR ERROR ERROR
5 ERROR ERROR ERROR ERROR
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
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0 0 0 0 0
0 0 0 0 0
0
#5B

Hint
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