MATH 120 – PROJECT 2 – FINANCE
Directions: Now that we have looked at the topic of finance, we are ready to put our skills to task in a
real-world project. Follow all directions carefully in order to earn full credit. Be sure to show all
requested work. Most importantly, be creative and have fun!
P This project is due: Tuesday, March 23rd by 11:59pm.
P This project is worth 6% of your overall grade.
P This project will be graded on accuracy of solutions and completion of all questions.
P This project should include only your own work and research.
P Calculators and Desmos may be used for calculations.
P All formulas used should be shown in detail.
P Answers should be rounded to nearest cent.
P The project has four parts that must be submitted:
A description of your purchase. (details below)
A loan calculation based on no down payment (details below)
A loan calculation based on 20% down payment (details below)
A project summary and analysis (details below)
P Grading Rubric:
4 points for completion of steps 1 – 3 (attachment, research, loan selection)
10 points for completion of steps 4 – 6 (correct formulas, accurate calculations, work shown)
10 points for completion of steps 7 - 9 (correct formulas, accurate calculations, work shown)
6 points for completion of steps 10 – 12 (correct formula, accurate calculations, work shown,
thorough explanation, summary, reflections)
PART 1: Description of Purchase (4 points)
Step 1.
Choose one of the following two scenarios:
Purchase a car Purchase a home
Step 2.
Find a reasonable price for your purchase. Attach a copy of the car or house you’ve chosen, along with its
price, to this project. (This is not optional, you must include an attachment or a link to the car or home you
have selected.). If selecting a home, your purchase must be greater than $100,000. If selecting an automobile,
your purchase must be greater than $10,000.
Step 3:
We are assuming that everyone in class has good credit and qualifies for the following loan options. State the
loan option you are selecting.
If you are purchasing a home, you qualify for either of the following. Choose one:
3.5% interest rate on a 30-year fixed rate conventional loan
2.875% interest rate on a 20-year fixed rate conventional loan
If you are purchasing a car, you qualify for either of the following. Choose one:
4.5% interest rate on a 48 month (4 year) loan
5.125% interest rate on a 72 month (6-year) loan
MATH 120 – PROJECT 2 – FINANCE
PART 2: Loan Calculations with NO down payment (10 points)
For Steps 4 – 6, assume there is NO down payment.
Step 4: Assuming there is no down payment, calculate your monthly payments over the life of the loan. That
is, determine your monthly loan payment.
Step 5: Still assuming there is no down payment, calculate your total payments made over the life of the loan.
That is, determine the total amount that you will pay for the loan.
Step 6: Using the information you acquired in steps 4 and 5, calculate the amount of interest you are paying
over the life of the loan.
PART 3: Loan Calculations with 20% down payment (10 points)
For Steps 7 – 9, assume you make a 20% down payment.
Step 7: Assuming you make a 20% down payment, calculate your monthly payments over the life of the loan.
That is, determine your monthly loan payment.
Step 8: Still assuming you make a 20% down payment, calculate your total payments made over the life of
the loan. That is, determine the total amount that you will pay for the loan.
Step 9: Using the information you acquired in steps 7 and 8, calculate the amount of interest you are paying
over the life of the loan, given that you made a 20% down payment before acquiring the loan.
PART 4: Project Summary and Analysis (6 points)
Step 10: Calculate the absolute difference in interest from making no down payment to making a 20% down
payment. That is, subtract the values in steps 6 and 9. Then take the absolute value of that difference.
Step 11: Based on your calculations and personal choices, would you make a down payment or not? Why or
why not? Use your results from above as well as any other pertinent information to justify your answer.
Step 12: Write a paragraph summarizing why you chose the purchase that you did and what you learned from
this project.
MATH 120 – PROJECT 2 – FINANCE
(Note: Many of you may choose to type this project. Because this project involves several financial formulas
and calculations, I am including a snippet about how to use the Equation Editor in MS Word should you choose
to type the project.)
How to Use Word and the Equation Editor
If you choose to type your project, then you will most likely want to use the Equation Editor in MS Word to
type your finance formulas. You do not need to install anything to write or edit your math equations. MS Word
includes the equation editor free in most of its versions.
Select “Insert”.
Then select “Equation”.
The editor will open automatically. The editor gives you a diversity of formulas to use and type.
Here are a couple YouTube videos that demonstrate how to use the equation editor in MS Word.
Equation Editor 2016
Equation Editor 2013
