# Let's Buy Another House

Over the years I've tried to start incorporating financial literacy lessons into what I do. Seniors in particular get that "wasn't I supposed to learn this?" feeling about this kind of stuff and I aim to help a little bit. Especially to offer some perspective on the rent vs own debate. A majority of my students rent their living space and have heard all about how it's allegedly a waste of money. Even more are eager to save up for a car of their own and need some insight on the process.

Last year I formalized that into Let's Buy a House. Last year I had about 10 days with this lesson. I had students do a lot of comparison shopping, visit a make shift bank, and then organize their findings. I had waaaaaaay less time with this in Calculus after the AP test this year. More or less two class periods and then school was over. A condensed version was necessary.

### Objective

Fast forward to your early 30s and assume you have the cash saved up for a car and a house. Find a new or used car for under \$30,000. Find a house in certain zip codes for under \$300,000 (not unreasonable for the area around school). Approximate the cost of property taxes for the house. Calculate the monthly payments and see what monthly income would be necessary to afford both. Answer some questions related to what you observed while researching.

All of students have Google Apps accounts and used my class set of Chromebooks to complete the task.

That's the short version. Here's what students were presented with:

Because of the limited time available, they only needed to run calculations and present their findings on 1 house and 1 car. 3.5 hours of class time over 3 days was allotted for this and most students finished in about 2.5 hours. This was their absolute last assignment of the year, finals started the day after this was due.

CAR PAYMENT CALCULATOR

HOUSE PAYMENT CALCULATOR

You'll have to make a copy of these files to use them.

### Results

Despite the rapid end of school approaching, students did a great job with this activity. They took their time and asked a lot of good questions along the way. Last year we spent a couple days building the payment calculator together. I didn't have the time this year so it was just given to them. Thanks to the suggestion of someone at TMC 17, I presented three credit rating scenarios for the car payments. That prompted a LOT of questions of what it takes to be considered in the Bad, OK, and Good camps. Students who had taken some of our finance electives were able to assist those that didn't understand it as well.

Many many students made good observations about how people in worse credit situations are often offered lower monthly payments not seeing the big disparity in money going towards interest. I think I successfully scared most of them off 30 year mortgages too.

A sample:

### Extension

Earlier in the year I did the same exercise with College Algebra. We were nowhere near as constrained with deadlines so they had a much longer version of this project. They had to research 3 cars, run the calculations, and present their findings. Separately they had to find 5 houses, run the calculations, and present their findings. For their 5th house they were given a \$4 million budget, just to give them an idea what the payments would be like for something like that. Collectively they were a little less organized, so in addition to giving me two presentations, they had to gather and submit their house findings on a worksheet:

They were a little dazzled about the kind of numbers that resulted from their "dream house:"

College Algebra spent about a week on each half of the project. It was part of a series of tasks they had to complete in the final grading period. As it was more of a self-paced environment, students worked on other things as they did this.

### Conclusion

College Algebra found it useful, if a bit tedious. I may shorten their requirements for next year. Calculus did a great job despite the constrained schedule. Calc BC didn't do this activity at all because schedule quirks left us with even less time (1 class day really) and I had other things I wanted them to do. A majority of those students attended summer camp and did the exercise there anyway, so it wasn't a huge loss.

More than one student made me laugh out loud as I scanned through their presentations:

Many of them incorporated a "I don't wanna grow up" vibe that was adorable.

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