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  • General

    My First Car


    Creative Commons License
    My First Car by Steve Durant and Wyandotte Public Schools is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.
    • Deciding what type of car to buy is a big decision. Unless you can pay cash for a car, the decision relies on how much you can afford to pay each month and how much you can afford to pay overall for a car. If you borrow the money, the amount you pay each month and the amount you pay overall for the car depends on how much you borrow, for how long, at what interest rate, and if you decide to buy new or used.

      Below are a set of exercises that will help you make good economic decisions when deciding how to spend your money to purchase a car. Click here for a Word File of the My First Car lesson. You may want to print the Word File and use it as a worksheet.

      If you have questions please contact me by phone at ???.???? or email at .
    • News forum
    • A Note to the Teacher Page
    • Download a copy of this course. File 61.2KB Moodle backup

  • Topic 1

    Calculating the Dealers Cost

    Go to www.kbb.com and look for a new car (sedan). Find the MSRP and the sticker price of your vehicle. Be sure to print out your advertisement or invoice and bring to the next class period.

    Click on the Calculating Dealers Cost below and follow the directions.

    Use the following template:
    Car make and Model =
    MSRP =
    Sticker Price =
    • Calculating Dealer's Cost Wiki

  • Topic 2

    Same Thing With a Sedan

     Repeat step 1 with a used sedan (be sure to pick same model and same options) only 4 years older and it has 50,000 miles. According to Kelly's Blue Book, what is the average retail value?

     Click on the Same Thing With a Sedan link below and follow the directions.

     Use the following format:
    Car Make and Model=
    Avg Retail Value=
    • Same Thing with a Sedan Wiki

  • Topic 3

    Insurance Quotes

    Go to www.statefarm.com to get insurance quotes for both your new and used cars. Please be sure to use all of your actual information. What is your premium? What are your coverage's (Be sure to print out two quotes).

    Click on the Insurance Quotes link below and follow the directions.

    Use the following format:
    Quote 1:
    New Car Premium=
    Used Car Premium=

    New Car Coverage=
    Used Car Coverage=

    Quote 2:
    New Car Premium=
    Used Car Premium=

    New Car Coverage=
    Used Car Coverage=
    • Insurance Quotes Wiki

  • Topic 4

    The Down Payment
    For your new car you will put a down payment of $2000. Go to www.bankrate.com and obtain the current average interest rate for a 3,4, and 5 year loan on a new vehicle.
    Click on the Down Payment link below and follow the directions.

    Use the following format:
    3 Year Rate =
    4 Year Rate =
    5 Year Rate =



    • The Down Payment Wiki

  • Topic 5

    Compounding the Interest Paid

    Assuming the loan is compounded monthly, use the following formula to calculate the total price for each loan term (3 years, 4 years, and 5 years.

    A=p(1+$$ \frac{r}{n} $$)nt Where A = amount of loan, r = the annual interest rate (expressed as a decimal, and n = the number of times it compounds in a year and t = the time in years.

     Click on the Compounding the Interest Paid link below and follow the directions.

     Use the following format:
    3 Year Loan=
    Total Price After 3 Years=

    4 Year Loan=
    Total Price After 4 Years =

    5 Year Loan=
    Total Price After 5 Years =


    • Compounding the Interest Paid Wiki

  • Topic 6

    Monthly Loan Payment

    Now calculate the monthly loan payment for each term (3 years, 4 years, and 5 years) using the following formula. You could also use the TI-84 Financial Applications.
    m =
    		 A($$ \frac{r}{12} $$)(1+$$ \frac{r}{12} $$)n
    _____________________

    (1+$$ \frac{r}{12} $$)n -1



    Where m = the monthly payment, A = amount of loan, r = the annual interest rate (expressed as a decimal, and n = the number of months of the loan.

     Click on the Monthly Loan Payment link below and follow the directions.

     Use the following format:
    Monthly Payment for a 3 Year Loan =
    Total Interest paid for a 3 Year Loan =

    Monthly Payment for a 4 Year Loan =
    Total Interest paid for a 4 Year Loan =

    Monthly Payment for a 5 Year Loan =
    Total Interest paid for a 5 Year Loan =
    • Monthly Loan Payment Wiki

  • Topic 7

    Loan for a Used Vehicle
    Repeat this process for the used vehicle. However, you are not putting a down payment of $2000. You are looking for 100% financing.

     Click on the Loan for a Used Vehicle link below and follow the directions to determine the best choice for purchasing a car.

     Click on the Insurance Quotes link below and follow the directions.

     Use the following format:
    3 Year Interest Rate =
    3 Year Loan =
    Total Price after 3 Years =
    Monthly Payment for a 3 Year Loan =
    Total interest paid for a 3 Year Loan =

    4 Year Interest Rate =
    4 Year Loan =
    Total Price after 4 Years =
    Monthly Payment for a 4 Year Loan =
    Total interest paid for a 4 Year Loan =

    5 Year Interest Rate =
    5 Year Loan =
    Total Price after 3 Years =
    Monthly Payment for a 5 Year Loan =
    Total interest paid for a 5 Year Loan =





    • Loan for a Used Vehicle Wiki

  • Topic 8

    Two Options
    The dealership offers you 2 options. The first option they will give you a $3000 rebate and finance the loan from your bank. The other choice is they will give you 0% financing for 4 years. Which is the better deal? Justify your answer with mathematical and written explanations.

    Click on the Two Options link below and follow the directions.
    • Two Options Wiki

  • Topic 9

    My First Car

    Deciding what type of car to buy is a big decision. Unless you can pay cash for a car, the decision relies on how much you can afford to pay each month and how much you can afford to pay overall for a car. If you borrow the money, the amount you pay each month and the amount you pay overall for the car depends on how much you borrow, for how long, at what interest rate, and if you decide to buy new or used.

    Below are a set of exercises that will help you make good economic decisions when deciding how to spend your money to purchase a car. Click on the     My First Car Purchasing Choices Lesson below and follow the directions.
    • My First Car Purchasing Choices Lesson
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