Mathematics Purchasing a Vehicle Assignment

PART 1: Comparing a new and used model.

1. Build and price a new car of your choice: Purchase Price = __________________

a. Info on my vehicle including website, pictures, make, model, etc.

b. Calculate your monthly payment for a 5-year loan with a $5000 down payment and 4.3% APR.

c. What happens to your payment if you decrease the loan term to 3 years?

d. You lost your savings and you can no longer afford to put a down payment on the car. The day worsens when the dealership informs you that your credit rating is less than ideal, and your expected APR is 17%. How does this affect your monthly payment for a 5-year loan?

e. Using the monthly payment from Part C, calculate the total amount you will pay for the car over the life of the loan.

f. How much more are you paying for the car than the purchase price?

2. Find a used vehicle of the same make as the new one: Purchase Price = ____________

a. Info on my vehicle including website, pictures, make, model, etc.

b. Calculate your monthly payment for a 5-year loan with a $5000 down payment and 4.3% APR.

c. Once again, you cannot afford to put money down on the car and the dealer informs you that your poor credit results in a 17% APR. How does this affect your monthly payment for a 5-year loan?

d. Using the monthly payment from Part B, calculate the total amount you will pay for the car over the life of the loan.

e. How much more are you paying for the car than the purchase price?

3. Reflection: In a short reflection below, answer the following questions in paragraph format.

· Have you purchased a vehicle before? If so, do you have any regrets about your experience?

· After this activity, do you feel more confident and informed about buying a vehicle?

· Now that you have completed this activity, if you were shopping for a vehicle, would you choose to buy new or used? Explain why.

Part 2: Comparing the Hybrid model to the Regular Vehicle

Question:

Is it worth buying a Hyundai Sonata hybrid instead the regular Hyundai Sonata?

To answer this questions we will break it down.

1) What are all of some of the factors to consider? List at least 3.

2) Focus on cost of fuel.

An average driver drives about 12,000 miles a year. Suppose that you expect to drive about 75% of that in the city. Find the yearly fuel cost for each. Assume gas costs $3.59 gallon. Show your work.

a) Hybrid fuel cost

b) Regular fuel cost

4) What is the percent decrease is the gas cost for the hybrid?

5) Research and discuss the starting prices for each vehicle.

6) To better answer the “is it worth it” question, how long it will take the gas savings to make up for the additional initial cost?

Discuss the pros and cons for each vehicle.