College Algebra;
House Lab Part I and directions for Part 2
Note: Part 2 is not required this year.
Lab 3 Part 1
"Buying the House"
DUE: Wednesday 4/22/09
Prep work: I’ve done it for you. Use the Excel sheet I’ve sent. You can print it out or type into it but you still have to show your work as specified in the following directions.
You're now ready to begin….
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1. Suppose you are looking to buy a house in a range of values from $50,000 to $350,000. Find such a house in a local you are interested in and print off the listing to include with your lab. If part two is assigned this is the house you will furnish.
Note: Part 2 is not required this year.
Lab 3 Part 1
"Buying the House"
DUE: Wednesday 4/22/09
Prep work: I’ve done it for you. Use the Excel sheet I’ve sent. You can print it out or type into it but you still have to show your work as specified in the following directions.
You're now ready to begin….
.
1. Suppose you are looking to buy a house in a range of values from $50,000 to $350,000. Find such a house in a local you are interested in and print off the listing to include with your lab. If part two is assigned this is the house you will furnish.
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2. Suppose you make an offer and they counter-offer and you both agree to a price that is 8% below what they are asking. What is the selling price of the house?
2. Suppose you make an offer and they counter-offer and you both agree to a price that is 8% below what they are asking. What is the selling price of the house?
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To get a good interest rate depends a lot on your credit score but also on the amount you put down on the house initially. Banks are looking for buyers to have at least a 20% stake in the house they intend to buy to make it harder to walk away from it, if times get rough financially.
To get a good interest rate depends a lot on your credit score but also on the amount you put down on the house initially. Banks are looking for buyers to have at least a 20% stake in the house they intend to buy to make it harder to walk away from it, if times get rough financially.
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3. Assume you will make a 20% down payment. Determine what your down payment will be and how much you will you have to borrow. You will also be responsible for about $6000 for closing costs, government stamps, title insurance and what-not. You can add this $6000 to your down payment, even though technically it is something else, but we’ll allow it because it, like the down-payment, is an out-of-pocket cost as well.
3. Assume you will make a 20% down payment. Determine what your down payment will be and how much you will you have to borrow. You will also be responsible for about $6000 for closing costs, government stamps, title insurance and what-not. You can add this $6000 to your down payment, even though technically it is something else, but we’ll allow it because it, like the down-payment, is an out-of-pocket cost as well.
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4. Research on-line to find the best mortgage you can available in Florida for each of the term lengths given in the table. Fill in the table with these rates and attach a print out of the webpage that you found the rate on, circle it and attach the print out (NO COPIES) to the rear of your lab. Use the link http://www.bankrate.com/brm/rate/mtgRsearch_loanamt.asp?params=0,FL,569&refi=0&product=1&points= . I used Winterhaven as my location but you don’t have to.
4. Research on-line to find the best mortgage you can available in Florida for each of the term lengths given in the table. Fill in the table with these rates and attach a print out of the webpage that you found the rate on, circle it and attach the print out (NO COPIES) to the rear of your lab. Use the link http://www.bankrate.com/brm/rate/mtgRsearch_loanamt.asp?params=0,FL,569&refi=0&product=1&points= . I used Winterhaven as my location but you don’t have to.
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NOTE: When you get there be careful to ignore the fields that are advertisements. They are “sneaky”. Anything that takes you away from Bankrate.com means you clicked an advertisement. Also when you search for available rates make sure you pick the lowest one with 0.000 discount and origination points. This is another way bankers make their rates look more competitive but hit you for it with extra fees up front.
NOTE: When you get there be careful to ignore the fields that are advertisements. They are “sneaky”. Anything that takes you away from Bankrate.com means you clicked an advertisement. Also when you search for available rates make sure you pick the lowest one with 0.000 discount and origination points. This is another way bankers make their rates look more competitive but hit you for it with extra fees up front.
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5. Calculate by hand the monthly payment based on the loan amount you determined for two of the term lengths given using the rates you found and the formula found on page 171. Show all your set-up and your step by work on a separate page and label the page “WORKSHEET”. Label the work for each as well so I know which problem you are doing. State clearly what the values are that you are using for each of the variables in the formula and show all the steps required for simplifying the formula. If you are a little off because of rounding that is to be expected but round as little as possible.
5. Calculate by hand the monthly payment based on the loan amount you determined for two of the term lengths given using the rates you found and the formula found on page 171. Show all your set-up and your step by work on a separate page and label the page “WORKSHEET”. Label the work for each as well so I know which problem you are doing. State clearly what the values are that you are using for each of the variables in the formula and show all the steps required for simplifying the formula. If you are a little off because of rounding that is to be expected but round as little as possible.
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6. Verify the monthly payments you calculated are accurate by comparing them to the estimated payments found in the loan data sheet you printed off from the internet (it is the 8th column)
6. Verify the monthly payments you calculated are accurate by comparing them to the estimated payments found in the loan data sheet you printed off from the internet (it is the 8th column)
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7. After doing two of the monthly payment calculations by hand, you can fill in the monthly payments for the remaining two term lengths using the estimates provided by the internet site.
7. After doing two of the monthly payment calculations by hand, you can fill in the monthly payments for the remaining two term lengths using the estimates provided by the internet site.
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8. Finally, fill in all remaining empty cells in the table, showing and labeling all the work for the last 3 columns on the WORKSHEET. Use additional pages as needed. Be neat and well organized. .
9. ESSAY Question for part ONE:
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Based on your research, describe in a two-three paragraph comparative essay, both the pros and cons to short and long term mortgages. Be sure to compare them citing some of the values found in your table and what they mean particularally the last column. Also state what demographic you believe each term length would appeal to and why. If you aren’t familiar with the term demographic try http://en.wikipedia.org/wiki/Demographic and look at demographic profiles or if that doesn’t work come by my office.
8. Finally, fill in all remaining empty cells in the table, showing and labeling all the work for the last 3 columns on the WORKSHEET. Use additional pages as needed. Be neat and well organized. .
9. ESSAY Question for part ONE:
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Based on your research, describe in a two-three paragraph comparative essay, both the pros and cons to short and long term mortgages. Be sure to compare them citing some of the values found in your table and what they mean particularally the last column. Also state what demographic you believe each term length would appeal to and why. If you aren’t familiar with the term demographic try http://en.wikipedia.org/wiki/Demographic and look at demographic profiles or if that doesn’t work come by my office.
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Part II Pg 195-197/Lab exercise 5
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"Furnishing The House"
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DUE: Not assigned this term
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For this part of the lab furnish you house following the instructions for lab exercise 5. Attach the Web pages with pictures and prices for the furniture you pick. No copies of web pages accepted. Advertisements from Newspaper circulars like Sears are also acceptable. Just cut them out making sure to include both the price and picture and attach them. Answer all the questions given in the book with the addition of the following:
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Short response QUESTION for part two:
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The original offer was a typical 20% down, 0%financing, same-as-cash ploy many businesses employ to sucker their customers. While for the first 24months the offer is truly same as cash, we see that if the complete balance was not paid off in the given 2 year cycle the deferred finance charges get billed to the account at a very high interest rate. Given that fact and the work you did for questions three and four discuss why a credit card purchase might be a better choice for a financing option (given a reasonably low APR). A short, one paragraph answer is sufficient for answering this question
Part II Pg 195-197/Lab exercise 5
.
"Furnishing The House"
.
DUE: Not assigned this term
.
For this part of the lab furnish you house following the instructions for lab exercise 5. Attach the Web pages with pictures and prices for the furniture you pick. No copies of web pages accepted. Advertisements from Newspaper circulars like Sears are also acceptable. Just cut them out making sure to include both the price and picture and attach them. Answer all the questions given in the book with the addition of the following:
.
Short response QUESTION for part two:
.
The original offer was a typical 20% down, 0%financing, same-as-cash ploy many businesses employ to sucker their customers. While for the first 24months the offer is truly same as cash, we see that if the complete balance was not paid off in the given 2 year cycle the deferred finance charges get billed to the account at a very high interest rate. Given that fact and the work you did for questions three and four discuss why a credit card purchase might be a better choice for a financing option (given a reasonably low APR). A short, one paragraph answer is sufficient for answering this question
