In this lesson, students will choose a car from an Internet used car dealer and then calculate their monthly payment. To reach the service, have students type in the URL below for the autobytel.com Used Car Purchase Center
Once they reach autobytel.com students will pass through several pages as they find the right car and the right price for them. When they have found their price, have them experiment with different interest rates and numbers of payments in the formula below.
In this formula for a monthly payment, assume that there is no down payment and that the student must finance the entire price of the car. The formula has a principal, P, interest rate, r, and number of
monthly payments, m.
For example, a 3 year (36 month) loan of $15,000 at 7% interest would look like this:
The payment for this car will be $463.16 per month.
Have students write down the setup for first a 3 year and then a 4 year 7% loan, and enter it in the calculator. Next have them calulate a 3 year loan at 6%.
The setup should be a step-by-step list of how the numbers and parentheses are to be entered into the calculator and which buttons must be pressed at which point. Warn them that the fraction bar is a grouping symbol and that parentheses are sometimes needed to separate the numerator and denominator of a complex fraction.
Sites that list this lesson and ones like it: