rough notes on interest rates, loans, etc

If you teach math, perhaps your students ask this: When will I ever need this in "real life?"*
We have been studying exponential growth and decay, and I was just waiting for this question. The past few days we have looked at car depreciation and why that is a big deal in "real life," but I wanted to take it up a notch.

Here are the rough notes for a project I am going to do with my advanced math students. I worked with my brother who is in the financial industry to help me design it. I still don't know how I am going to have the kids present what they learned to me. Perhaps I will do interviews, have them make a recording, or write a paper.

Project:

You need to take enough notes so that you'll be able to tell me what you learned. Take notes, screen shots, etc. so that you can reference them.

Read http://www.bankrate.com/finance/auto/the-price-of-long-auto-loans.aspx. What does it mean to be "upside down" in a loan?

Find a new car and use http://www.money-zine.com/Calculators/Auto-Loan-Calculators/Car-Depreciation-Calculator/ to figure out what value of car will be in 2 years. (I think we underestimated using 15% in class.) [Remember that you put in 0 for current age.]

Go to loan amortization sheet.
http://financialsoft.about.com/gi/o.htm?zi=1/XJ&zTi=1&sdn=financialsoft&cdn=compute&tm=32&f=10&su=p284.9.336.ip_p504.1.336.ip_&tt=11&bt=1&bts=1&zu=http%3A//www.mdmproofing.com/iym/products/loan-amortization/
Use 5.25% as the APR and 1/1/12 as the start date.
Compare total payment of loans for 3, 4, 5, 6, and 7 years. What happens to the total amount you have to pay? Why?


Compare your car value at 2 years to each of these loan values. What do you notice?

Read http://www.lendingtree.com/auto-loans/advice/buying-a-new-car/how-much-to-put-down-on-a-car/.
Now go back to the loan amortization sheet and put $5,000 down in the first payment. Now what do you notice? According to this article, can you be "upside down" in a loan even if you take out a 3-year loan?

Reflection questions
Why do most financial experts advise consumers to take car loans of 4 years or less?
Why do people take out loans for longer than 5 years and what can happen?
About what % of a car's value should you put down and why?
At my first job, I brought home approximately $23,000. Suppose my typical month of bills was $900, what advice would you give me if I wanted to buy a new car?










*I do acknowledge this is a valid and important question. I just wanted to set the tone of the blog. :)

One week down...How many more?

Well, we successfully made it through the first week of school. Yay! I told my students that today I felt jet lagged, and I hadn't even traveled anywhere. :) Honestly, it feels good to get back into the routine. I can't believe I am in my sixth year of teaching. It's been fun to reflect on how I've grown and yet, realize how much more I want to grow. I am trying some new things this year. My big project is Standards-Based Grading for Geometry and Algebra II. I'm sure I'll be blogging about that as the year goes on. I'm also serving as a mentor for a new teacher. I look forward to this role. I miss mentoring students like I did in Africa.
It should be an exciting year. There is one certainty in education--you never know what the day will hold! :)

Guess my #

Number puzzles always fascinated me as a child. When I learned the algebra behind them,I liked them even more. :)

Now as a teacher, I like to start Alg/Alg II with this activity. The students are usually amazed when you first do them. Then you can draw them in so they don't mind writing and simplifying expressions because they want to know how it works. Here are some of the basic ones I started with:

Guess my Number
1. Pick a number between 1 and 100.
2. Double it
3. Add 100
4. Take half the result
5. Subtract the number you started with.

Number 2
1. Pick a number
2. Add 9
3. Multiply by 3
4. Subtract 6
5. Divide by 3
6. Subtract original number.

Number 3.
1. Pick a number.
2. Multiply it by 9
3. Subtract 18
4. Divide by 9
5. Subtract your original number.
6. Add 2




Then I have the kids write their own and show the algebra behind it. We are still at the basic stage, but I am still proud of their work during the first week of school.
(Dan Meyer has some great ones to help the kids move from completing puzzles to creating them.)

1. Pick a number
2. Multiply by 4
3. Subtract 10
4. Divide by 4
5. Add 5
6. Subtract number started with

1. Pick a number
2. Add 12
3. Multiply by 2
4. Subtract 4
5. Divide by 2
6. Subtract the number you started with

1. Pick a number
2. Subtract 3
3. Multiply by 3
4. Add 9
5. Divide by 3
6. Subtract the number you started with

1. Pick a number
2. Subtract 15
3. Divide by 5
4. Subtract 3
5. Multiply 5
6. Subtract the number you started with

1. Pick a number
2. Add 6
3. Multiply by 3
4. Subtract 3
5. Divide by 3
6. Subtract the number you started with