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201803240014431521849721254_math125_u3_submission_answer_form_1801b.docx
201803240014431521849721254_math125_u3_submission_answer_form_1801b.docx
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MATH125: Unit 3 Submission Assignment Answer Form
Logic, Decision Making, and Introduction to Statistics
ALL questions below regarding BUYING and LEASING a car must be answered. Show ALL step-bystep calculations, round all of your final price answers correctly to the nearest cent, and
include the units of measurement. Upload this modified Answer Form to the intellipath Unit 3
Submission lesson. Make sure you submit your work in a modified MS Word document;
handwritten work will not be accepted. If you need assistance, please contact your course
instructor.
Being well informed, or at least knowing the right questions to ask, can save you from being taken
advantage of. The purchase of a car involves so many variables that it is best to have some
understanding before you attempt to purchase a car. There are even more variables to consider
when you lease a car. For the purpose of this example, you will ignore such things as tax and dealer
rebates. Research the differences between buying and leasing a car.
BUYING
1. Choose a car that you wish to own, and find the price of this car. For this example, only
consider new cars to purchase from a dealership. This will be your principal value, P. (3
points)
Principal, P
$
2. Research available interest rates on this particular car. This will be the rate, r. (3 points)
Rate in decimal form, r
3. Decide how long you would like to take to pay off this car. Choose within 2 to 5 years. This
will be the time, t. (3 points)
Time, t
? years
4. The simple interest formula, = , can tell you how much interest will be added to the
principal amount of this loan. Calculate the interest on your loan.
Interest, I
$
Show your work here: (5 points)
5. How much will you be repaying over the life of your loan?
Total repayment
$
Show your work here: (5 points)
6. How much are your monthly payments?
Monthly payments
$
Show your work here: (5 points)
7. Assume that you have 6% to use as a down payment based on the original purchase price of
the car. How much will you be putting down? What is the new value of P on your lease?
Down payment, D
$
New value, P
$
Show your work here: (7 points)
8. With the down payment, what will the new monthly payments be?
New monthly payment
$
Show your work here: (7 points)
LEASING
Now, consider the option to lease this same car.
9. The appeal of a lease is a lower interest rate. Subtract 3% from the original interest rate
(from Step 2). If your answer is less than 0.6%, use the minimum rate of 0.6%. (3 points)
Reduced rate in decimal form, r
10. The length of a lease is typically 3–7 years. Choose how long you wish to lease this car. (3
points)
Lease time, t
? years
11. The monthly payment on a lease accounts for the depreciation of the car’s value. Assume
that at the end of your lease, the car has only retained 50% of its original value (50% of
your answer in Step 1). What is your car’s value at the end of the lease? Use this for your
new value of P.
New value, P
$
Show your work here: (5 points)
12. How much interest will you be paying over the course of this lease?
Interest, I
$
Show your work here: (5 points)
13. What is your total cost—in other words principal plus interest?
Total cost
$
Show your work here: (5 points)
14. How much is your monthly payment?
Monthly payment
$
Show your work here: (5 points)
15. At the end of the lease, you do not own the car. If you wish to purchase the car, you would
still owe the value of P from Step 11. At this point, you could turn in the keys and walk away,
assuming the car is in perfect condition and ignoring mileage fees. What are the benefits
and disadvantages to walking away from this car?
Explain your answer here: (7 points)
16. Instead of walking away, you could also purchase the car for what it is now worth, plus the
interest. Using P from Step 11, r from Step 2, and t from Step 3, calculate how much you
would repay over the course of this new loan.
Interest
$
Total repayment
$
Show your work here: (7 points)
17. At the end of the lease, how much did you pay in total for the car? Be sure to include the
lease, Step 13, along with the purchase price from Step 16.
Total cost of the car
$
Show your work here: (5 points)
18. Would you consider leasing a car? Discuss the advantages and disadvantages of buying
versus leasing a car.
Explain your answer here: (7 points)
NAME:
MATH125: Unit 3 Submission Assignment Answer Form
Logic, Decision Making, and Introduction to Statistics
ALL questions below regarding BUYING and LEASING a car must be answered. Show ALL step-bystep calculations, round all of your final price answers correctly to the nearest cent, and
include the units of measurement. Upload this modified Answer Form to the intellipath Unit 3
Submission lesson. Make sure you submit your work in a modified MS Word document;
handwritten work will not be accepted. If you need assistance, please contact your course
instructor.
Being well informed, or at least knowing the right questions to ask, can save you from being taken
advantage of. The purchase of a car involves so many variables that it is best to have some
understanding before you attempt to purchase a car. There are even more variables to consider
when you lease a car. For the purpose of this example, you will ignore such things as tax and dealer
rebates. Research the differences between buying and leasing a car.
BUYING
1. Choose a car that you wish to own, and find the price of this car. For this example, only
consider new cars to purchase from a dealership. This will be your principal value, P. (3
points)
Principal, P
$
2. Research available interest rates on this particular car. This will be the rate, r. (3 points)
Rate in decimal form, r
3. Decide how long you would like to take to pay off this car. Choose within 2 to 5 years. This
will be the time, t. (3 points)
Time, t
? years
4. The simple interest formula, = , can tell you how much interest will be added to the
principal amount of this loan. Calculate the interest on your loan.
Interest, I
$
Show your work here: (5 points)
5. How much will you be repaying over the life of your loan?
Total repayment
$
Show your work here: (5 points)
6. How much are your monthly payments?
Monthly payments
$
Show your work here: (5 points)
7. Assume that you have 6% to use as a down payment based on the original purchase price of
the car. How much will you be putting down? What is the new value of P on your lease?
Down payment, D
$
New value, P
$
Show your work here: (7 points)
8. With the down payment, what will the new monthly payments be?
New monthly payment
$
Show your work here: (7 points)
LEASING
Now, consider the option to lease this same car.
9. The appeal of a lease is a lower interest rate. Subtract 3% from the original interest rate
(from Step 2). If your answer is less than 0.6%, use the minimum rate of 0.6%. (3 points)
Reduced rate in decimal form, r
10. The length of a lease is typically 3–7 years. Choose how long you wish to lease this car. (3
points)
Lease time, t
? years
11. The monthly payment on a lease accounts for the depreciation of the car’s value. Assume
that at the end of your lease, the car has only retained 50% of its original value (50% of
your answer in Step 1). What is your car’s value at the end of the lease? Use this for your
new value of P.
New value, P
$
Show your work here: (5 points)
12. How much interest will you be paying over the course of this lease?
Interest, I
$
Show your work here: (5 points)
13. What is your total cost—in other words principal plus interest?
Total cost
$
Show your work here: (5 points)
14. How much is your monthly payment?
Monthly payment
$
Show your work here: (5 points)
15. At the end of the lease, you do not own the car. If you wish to purchase the car, you would
still owe the value of P from Step 11. At this point, you could turn in the keys and walk away,
assuming the car is in perfect condition and ignoring mileage fees. What are the benefits
and disadvantages to walking away from this car?
Explain your answer here: (7 points)
16. Instead of walking away, you could also purchase the car for what it is now worth, plus the
interest. Using P from Step 11, r from Step 2, and t from Step 3, calculate how much you
would repay over the course of this new loan.
Interest
$
Total repayment
$
Show your work here: (7 points)
17. At the end of the lease, how much did you pay in total for the car? Be sure to include the
lease, Step 13, along with the purchase price from Step 16.
Total cost of the car
$
Show your work here: (5 points)
18. Would you consider leasing a car? Discuss the advantages and disadvantages of buying
versus leasing a car.
Explain your answer here: (7 points)
…
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