Buying-vs-Leasing-math-homework-help

Unit Project: Buying vs. Leasing

Goals

Someday, you may need to have a car. Will you buy or lease a car?

During this unit, you will calculate and compare costs of buying and leasing a car.

First you’ll find a leasing deal. Then you’ll calculate the cost of buying the car instead, and you’ll compare costs of buying and leasing over time.

Template

Download the project template and rename the file as CarPresentation_YourName. This file will become your presentation.

Project Research

1.  Find an advertisement for a vehicle lease offer. You can look on the Internet or in newspapers and magazines.

(a)  If you are looking on the Internet, you can begin with a general search by entering vehicle lease advertisement, or something similar, in the Search bar. You may need to enter your ZIP code on a particular website to see local offers. If you are interested in a specific make of car, use that in your search. For example, you could search for Honda lease. Skip over websites that require your specific contact information (name, address, phone number, e-mail).

(b)  Make sure you can locate the monthly payment, length of lease, amount due at signing, and MSRP. Some of this information may be in small print, or you may need to select or hover over a Details button to see it. You can only complete the project if you have this information.

2.  Open your presentation. On slide 1, type your name. On slide 2, record the lease information into the table.

(a)  If your offer does not discuss maintenance, assume that you are responsible for it.

(b)  If you did not find your lease on the Internet, add a slide to the end of your presentation. Copy an image of the ad onto that slide.

Project Writing

1.  Complete Lesson Checkpoint: Yearly Leasing Costs, an online, ungraded assessment. You’ll practice calculating costs related to leasing—a skill essential to completing your project. Reach out to your teacher with any questions you have after taking this assessment.

2.  Open your presentation. Complete slide 3, which approximates the costs of continual leasing for a period of 10 years.

(a)  For the first year, add the amount due at signing to the total of 11 monthly payments. If your lease indicates that you are responsible for maintenance, add $200 to the yearly cost.

(b)  For each of the remaining years on the lease, the yearly cost is the total of 12 monthly payments. Add the maintenance cost of $200 to each year, if applicable.

(c)  Once the lease is up, assume you can get another lease with the same cost and terms. For example, if you have a 3-year (36-month) lease, then the cost of the fourth year is the same as the cost of the first year, the cost of the fifth year is the same as the cost of the second year, and so on.

(d)  Repeat until you have yearly costs for 10 years.

(e)  Find the cost after 5 years by finding the sum of the costs for the first 5 years.

(f)  Find the cost after 10 years by finding the sum of the costs for the first 10 years.

3.  Open your presentation. Complete slide 4 by filling in the blanks. Assumptions about certain fees and values have already been determined. These amounts will vary in real life.

(a)  Different people will be able to negotiate different prices for vehicles. For this project, assume the negotiated price of the vehicle is 90% of the MSRP, which you recorded on slide 2.

(b)  Some states have a sales tax and some do not. For this project, assume a sales tax of 4%.

(c)  Find the total price by finding the sum of the values in Lines 1–6.

(d)  Down payments will vary from buyer to buyer. For this project, assume a down payment that is equal to 20% of the negotiated price of the vehicle. Round to the nearest dollar if needed.

(e)  Find the balance due by subtracting the down payment from the total price.

4.  Complete slide 5.

(a)  The amount financed is the balance due from slide 4.

(b)  Assume you are financing the vehicle for 5 years with an APR of 2.9%. Therefore, the monthly payment per $1000 is $17.924.

(c)  The total amount of the payments is the product of the monthly payment and the number of payments.

(d)  The finance charge is the amount of interest paid. It is the difference between the total amount of the payments and the amount financed.

(e)  The total cost is the sum of the finance charge and the total price (in Line 7 on slide 4).

5.  Open your presentation. Complete slide 6, which approximates the costs of owning a purchased vehicle for a period of 10 years.

(a)  For the first year, add the down payment (shown on slide 4) to the total of 12 monthly payments (the monthly payment amount is on slide 5). Your extended warranty will cover repairs, but not maintenance. Add $200 to the yearly cost for maintenance.

(b)  The vehicle was financed for 5 years. So the yearly cost for each of Years 2–5 is the total of 12 monthly payments plus $200, which you add every year for maintenance. The extended warranty will cover repairs up to 5 years, but you still have those maintenance costs.

(c)  After Year 5, you do not make monthly payments. The loan is paid off. But you will have to pay for maintenance and repairs. These costs will vary widely. For this project, assume an average of $850/year for repairs and maintenance.

(d)  Find the cost after 5 years by finding the sum of the costs for the first 5 years.

(e)  Find the cost after 10 years by finding the sum of the costs for the first 10 years.

6.  Complete slide 7.

(a)  Complete the tables with information from slides 3 and 6.

(b)  Use your yearly costs in slides 3 and 6 to estimate the point in time when the cumulative costs of buying and leasing are about the same for your scenarios, and then complete the statement under the tables.

Project Reflection

1.  Join the online session set up for you and your classmates.

2.  Write a response to any of the following.

·  Under what circumstances does it make more sense to lease than to buy?

·  What factors will cause the monthly finance payment for different drivers of the same car to be different?

·  You found yearly costs of owning a car for up to 10 years. How do you think the yearly costs for the next 10 years will compare?

3.  Comment on at least one other student’s post.

Alternate Reflection Assignment

If your teacher excuses you from the online discussion, then add a slide to the end of your presentation. On the slide, pretend that someone asked you if they are better off buying or leasing a car. Write at least three questions you would ask that person to help determine your answer. Explain why you would ask those questions.

Submission

Confirm that your project contains all your work:

·  Lease information

·  Yearly costs for leasing

·  Purchase and finance calculations for buying

·  Yearly costs for buying

·  Cost comparison tables for leasing and buying

·  Image of lease offer (ONLY if you did not find it on the Internet)

·  Alternate reflection assignment slide (ONLY if you did not participate in the online discussion)

Submit your project to your teacher.

 

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