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Warm Up 1/16/14 Which auto would be your first purchase? (include year, make, and model) How much do you think this auto will cost? If you finance it, how much do you think you will pay monthly? How much do you think you will pay in interest (total)if you make monthly payments?

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My First Auto Research Assignment

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You will research both a new and used car/truck using available resources You will select a used and new car, indicating the year, make, model, features and price You will calculate monthly payments over several loan terms to determine the total cost of owning each vehicle Your calculations will be based on the interest rate that you draw in class You will complete the worksheet “My First Auto – Research & Analysis” to report the results of your research and your decisions

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Procedure: Practice rate/payment calculations Draw an interest rate Research a new and a used auto Use formula or web calculator to calculate payments and interest due Complete My First Auto-Research & Analysis worksheet Summarize findings and decisions necessary to afford auto selected

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Loan Payment Calculations www.bankrate.com www.1728.org/loanform.htm www.wikihow.com/Calculate-a-Monthly- Payment-in-Excel www.wikihow.com/Calculate-a-Monthly- Payment-in-Excel Using a scientific calculator, use the following formula:

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Loan Payment Calculation Practice Use the formula to calculate by hand the monthly payment for the following: - Loan amount (principal) : $12,700 - Loan term: 6 years (72 months) - Interest rate 6.8% (.068) - Monthly interest rate: ___________ - Monthly payment: ______________ Total paid for car (monthly payment x 72)________ Total interest paid to finance car (total – principal): ___________

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Loan Payment Practice Use an online loan calculator to calculate the following: (www.bankrate.com)www.bankrate.com a) Principal : $24,300 Interest rate: 12% Term: 4 years Monthly payment: ______________ Total paid: _________________ Cost of financing: _____________

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Loan Payment Practice Use an online loan calculator to calculate the following: (www.bankrate.com)www.bankrate.com b) Principal : $15,800 Interest rate: 9.25% Term: 5 years Monthly payment: ______________ Total paid: _________________ Cost of financing: _____________

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Loan Payment Practice Use an online loan calculator to calculate the following: (www.bankrate.com)www.bankrate.com C) Principal : $20,680 Interest rate: 3.75% Term: 2 years Monthly payment: ______________ Total paid: _________________ Cost of financing: _____________

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Auto Research Resources http://www.autotrader.com http://www.ebay.com/motors http://www.kbb.com http://www.carmax.com/

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Completing the Research Form Select one used auto and one new auto Calculate the loan payments and interest paid for each time period (3, 5, 7 years) Answer the analysis questions Due on Tuesday, January 21 st – no late work accepted

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INSTALLMENT BUYING Chapter Fourteen McGraw-Hill/Irwin

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