MAT 143 Signature Assignment

Learning outcome:
Upon completion students will be able to…

● Research and calculate all the costs associated with the purchase of a car.
● Calculate a budget including monthly net total.
● Use the gathered car information and the budget information to determine if the individuals studied
will be able to purchase the selected car.
● Reflect upon the budgets and the practicality of being able to purchase a car.

Scoring/Grading rubric:
● This assignment will be graded twice. Once using the rubric listed below for the ability to analyze data
using quantitative concepts. And a second time for a mathematical/content grade. The second grade
will count as 5% of your overall grade.

COMPETENCY: INFORMATION TECHNOLOGY AND QUANTITATIVE LITERACY

KEY INDICATOR 2: STUDENT APPLIES QUANTITATIVE CONCEPTS TO ANALYZE DATA.

Score Description

Score Blank Indicates an assignment was not Submitted.

Score 0 Indicates submission of an assignment that does not allow for sufficient or
appropriate scoring of skill, for example, an assignment that was plagiarized.

Score 1 Uses the quantitative analysis of data as the basis for drawing unclear conclusions
from this work.
Beginning

Score 2 Uses the quantitative analysis of data as the basis for drawing plausible conclusions
from this work.
Emerging

Score 3 Uses the quantitative analysis of data as the basis for drawing reasonable and
appropriately qualified conclusions from this work.
Emerging

Score 4 Uses the quantitative analysis of data as the basis for drawing insightful, carefully
qualified conclusions from this work.
Proficient

**"Reprinted [or Excerpted] with permission from Assessing Outcomes and Improving Achievement: Tips and
tools for Using Rubrics, edited by Terrel L. Rhodes. Copyright 2010 by the Association of American Colleges
and Universities.”

Introduction: In this project, you will…

● Select a car to purchase.
● Analyze the costs involved in purchasing and maintaining the car you selected.
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● Calculate the number of hours you need to work each week to maintain the vehicle.
● Calculate monthly budget for two individuals.
● Evaluate whether the individuals can afford to add the car selected to their monthly expenditures.

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Assignment Instructions:
Download this document into Microsoft Word. Type your responses into the document and then upload the
completed Microsoft Word document into Brightspace as one document. All assignments must be uploaded
to Brightspace as a Microsoft Word document in one document. Assignments submitted in multiple files will
receive a reduced grade or a grade of zero for the assignment. If you do not have access to Microsoft Word
at home, print this document, complete the lab, and then use a campus computer lab computer to
download the document and input your answers. All assignments must be uploaded to Brightspace as a
Microsoft Word document in one document.

Note: Show your work below each item, then put your final answers on the car calculations worksheet. The
car calculations worksheet will be graded.

1. Choose a car (new or used) that you would like to purchase. Be sure to think about the type of car that
you would realistically consider purchasing in the next couple of years (not your ultimate dream car).
Once you have selected a car, verify that you can find maintenance information for your car on the
Edmunds site (see number 9 below). If your car is not listed on the Edmunds site, please pick a similar
car which is listed on the Edmunds site and use it for the rest of your calculations. List the car
information, including the make, model, year, and list price in item one of the table.

2. Determine the amount of your down payment. For this project, make a 10% down payment and fill in
the amount in item 2 of the table. In the real world, individuals can choose a different amount, and in
fact some loans do not require a down payment.

3. Most dealerships charge a dealership fee. These fees vary depending on the dealership and state. The
dealership fee usually includes vehicle registration fee, sales tax, and documentation fee. Some fees
may be negotiated. Here is a resource with more information on dealership fees. We will estimate the
dealership fee at 8% of the list price.

4. Calculate the 3% tax (in N.C., we pay a 3% highway use tax in lieu of state sales tax). The tax is based
on the list price. Source: Link to government highway use tax website.

5. Calculate the total amount to be financed. To find the total amount financed, take the list price minus
the down payment plus the highway use tax.

6. Determine the interest rate for the car. Link to State Employee's Credit Union Website to research
rates. Or, if you prefer, you can look up the rates on another legitimate website (cite your source).
Decide on the term of a loan (number of years) that would be reasonable for you. List your rates,
term, and source in the table.

7. Calculate your monthly payment for the loan and the yearly amount. Use this link to find the monthly
payment. Note: This is the same calculations that is done with the monthly payment formulas from
section 6.3. To find the yearly amount, take the monthly payment times 12.

8. Insurance rates are calculated on many factors such as: Age, Gender, Driving Record,
Make/Model/Year of car, number of years driving etc…. Insurance rates will very per individual,
however for this project, use the following average rates provided by my insurance agent: $2000/year
for full coverage on a new car, $1500/year for full coverage on a used car.
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9. Include the Department of Motor Vehicles Fee of $28 per year.

10. Calculate the maintenance cost per year by going to Link to the Edmunds True Cost to Own Your Car
Website. Divide the 5 Yr Total maintenance amount by 5 to get the average annual cost. Include your
work in the middle column of the table and your one year maintenance cost in the right column.

11. Calculate fuel costs based on your car’s average MPG (look it up!) and the average cost of a gallon of
gas ($3.36/gallon). You will need to estimate how many miles you drive per year. If you have no idea,
you can you use 12,000 miles, which is the national average.

12. (& 13) Calculate the county and city/municipal taxes. Tax rate schedules for all counties and
municipalities can be found on the Internet (search for property tax rates). However, for this project,
we will assume that everyone lives in Mecklenburg County and the city of Charlotte. Use the
following rates: Mecklenburg has a tax of $0.8157 per $100 of the car’s value and Charlotte has a tax of
$0.437 per $100 of the car’s value. For example, if your car has a value of $12,000, then the
Mecklenburg county tax is ($0.8157)(12,000/100) = $97.88.

14. Calculate the Yearly Total (rows 6 through 12: the sum of yearly payments, insurance, DMV fee,
maintenance, fuel, and taxes,).

15. Calculate the Grand Total(over entire length of loan): (Yearly Total times # years of loan, plus down
payment and dealership fees)

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Car Calculations Worksheet
Directions Descriptions and work space Fill this column with
your numbers.

#1 Record your Car’s Make, Model and Year: List price of Car:
Make:
Model:
Year:
#2 Down payment: (10 %)

#3 Dealership fee (8%)

#4 N.C. Highway Use Fee: (3% of list price)

#5 Total amount to be financed:

#6 Leave Blank
Interest rate: _________ and length of loan: __________

Source:

#7 Yearly amount:
Monthly Payment:

#8 Insurance costs (yearly):

#9 Department of Motor Vehicles fee (yearly):

# 10 Total maintenance costs (yearly):

# 11 Fuel costs (yearly):

# 12 County taxes (yearly):

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Directions Descriptions and work space Fill this column with
your numbers.

# 13 City taxes (yearly):

# 14 Yearly Total:

(the sum of yearly payments, insurance, DMV fee,

maintenance, fuel, and taxes)

# 15 Grand Total (over entire length of loan):

(Yearly Total *# years of loan, plus down payment and

dealership fee)

16. If you have a job making $15.00 an hour, how many hours do you need to work per month just to pay
your car expenses? How many hours do you need to work per week to pay your car expenses
(assuming there are 4 weeks per month)? Make sure to answer both questions. (Hint: To calculate
your car expenses, divide your Yearly Total by 12) Show your work.

17. Find the total installment price (sum of all the monthly payments and the down payment) and the
finance charge (difference between the total installment price and the list price) for the loan of your
car. Discuss what these numbers mean in relation to the list price and the loan. What does the total
installment price represent? Is it greater or less than the list price? What does the finance charge
represent? Is it better for a smaller or larger finance charge? Your response should be at least 6
sentences. Use ipso facto in your response.
Total installment Price: Finance Charge:

18. Complete the chart for the yearly cost of the car. In the space below write the Yearly Total and the
cost of the car over the life of the loan (Grand Total). Based on your calculations do these figures make
sense? Discuss whether these numbers are higher or lower than you expected and whether you
personally would be able to afford this vehicle. Make sure you consider and discuss other life
expenses. All verbal responses must be in complete sentences. Your response should be at least 6
sentences. Use ipso facto in your response.

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 Yearly Total: Grand Total:

19. Review your answers from number 16. Based upon the information from your car calculations, would
an individual be able to afford this car if they earned $15 per hour? Give details to justify your
reasoning and discuss your options. Make sure you consider and discuss other life expenses. All verbal
responses must be in complete sentences. Your response should be at least 6 sentences. Use ipso facto
in your response.

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Managing a Budget
20. Your good friend Jasmine needs some financial advice. She is thinking about buying a car and a house.
Help Jasmine calculate her expenses and give her some friendly advice on her planned purchases.
Here is Jasmine’s story. Jasmine just graduated from CPCC in nursing and received her LPN license.
She is starting her new job and will be making 72,000 a year. She will have to pay 19% of her income to
pay for taxes and social security (SS) and 5% of her income to a forced employer retirement plan. How
much of her income will she have left to spend? Fill in the table below:

Description Amount

Income

Amount Paid to Taxes and SS

Amount Paid to Retirement Account

Amount Left to Spend

21. Help Jasmine evaluate her budget. Her current rent payment is $1,700 a month and her utilities total
$110 each month. Jasmine spends $50 on a bundle for her cell phone, internet and cable bill every
month. She has always believed that it is important to live a healthy lifestyle so she spends $400 a
month on groceries and $99.00 a month for a gym membership. Her health insurance for the month
totals $70.00. Jasmine does not have much time to go out but she makes sure that she treats herself
to dinner and a movie at least twice a month that costs $40.00 each time. She always puts away $100
each month into her personal savings account for retirement so she will not use this money for paying
bills. Jasmine also puts away $20.00 each week for a vacation fund (assume that there are 4 weeks in a
month). Jasmine loves lattes and spends $5.50 on coffee once a week. Jasmine wants to purchase a
car but is not sure if it will fit her budget. Compute Jasmine’s income and expenses and determine if
she can afford buying a new car.

Monthly Expenses: Enter the monthly expenses for each item, then add them together to find the Total
Monthly Expenses.
Monthly Expenses Description Amount

Home Mortgage/Rent/HOA

Utilities (Gas, Electric, Water)

Phone/Internet Bundle

Food Groceries

Health Health Club

Health Insurance

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Monthly Expenses Description Amount

Entertainment Dining Out/Movies

Vacation

Savings (Put into an account each month)

Other

Total Monthly Expenses Add up all the rows

22. Fill in the summary table below to see if they are on budget. Subtract the expenses from the income to
find the monthly net total.

Monthly Budget Summary Amount

Monthly Income Total

Monthly Expenses Total

Monthly Net Total

23. Suppose Jasmine has some unexpected health care expenses that makes her monthly net total
decrease by $2000. How does this expense affect his monthly net total compared to before (what you
calculated in #22). Use the new monthly net income to explain your reasoning. All verbal responses
must be in complete sentences. Your response should be at least 6 sentences. Use ipso facto in your
response.

24. Jasmine would like to buy her dream house for $315,000. She finances the whole purchase price of
$300,000. Calculate his monthly payment if she secures a home mortgage loan at 6% APR for 30 years.
Use this link to calculate the payment. Note, this is the same calculation as we did in section 6.3.
Financial advisors use a general rule that your monthly payment for your home mortgage should not
be more than 1/3rd your monthly income. Find 1/3 of Jasmine’s monthly income. Discuss whether
Jasmine will be able to afford her dream house. Give details to justify your reasoning and discuss
Jasmine’s options. All verbal responses must be in complete sentences. Your response should be at
least 6 sentences. Use ipso facto in your response.

Monthly Payment for Dream House: 1/3 Monthly Income:

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25. Now that we have looked at Jasmine’s income and expenses, let’s take a look at your own. Follow this
link to complete a Reality Check of your expenses and how much you would need to earn yearly to
cover all expenses. Discuss whether this yearly income is feasible for you and what adjustments might
need to be made. All verbal responses should be at least 6 sentences. Use ipso facto in your response.

Total Monthly Cost: Minimum Household Income:

26. What have you learned from this project? All verbal responses must be in complete sentences. Your
response should be at least 6 sentences. Use ipso facto in your response.

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