MTH 151 – Mathematics for the Liberal Arts I
Consumer Math Application Directions

Purposes
This assignment will help you practice applying what you have learned about consumer math to real problems or situations, and communicating about mathematical ideas with others.

Directions
Pick a problem:
Find a problem in your life that you can solve using the consumer math that you learned in this unit.  Most of us have home, car, or education loans for which we sometimes need to calculate payments or time required to repay.  Many also have savings accounts or other investments and want to calculate growth in value over a period of time.
Solve the problem:
Use the consumer math learned in this unit to solve your problem.  The better you use the appropriate mathematics to correctly solve the problem, the more points you will earn.
Present the problem and your solution to the others in the class:
Post a message in the application discussion forum for this unit.  In your message, describe the problem and how you solved it.  Use the equation editor as necessary to show the mathematical operations.  The better you communicate, the more points you will earn.  If you enjoy and know how to use multimedia, such as video, audio, and graphics, you may use those as well, but this is not required.
View and respond to the applications submitted by your classmates.
Pick two of your classmates’ applications that were particularly helpful to you.  Write a response to each, explaining in a paragraph or two why their applications helped you better understand the mathematics for this unit or better understand how the mathematics for this unit could be used outside of class.

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Example:  
Last summer my husband and I purchased a new washer and dryer. The store was running a sale, so for the both of them they were asking for $1475. We paid $550 up front, and agreed to pay the rest of the balance a 4% add-on rate for the next 2 year.
Amount to be financed 	 = $1475 – $650 = $825
Amount to repaid 		 = P (1 + rt)
				 = $825 (1 + 0.04 x 2)
				 = $891
Monthly payment 		 = $891/24 = 37.12
Total cost of purchase	 = $650 + 891 = 1541
According to these calculations we paid $66 more than the original cost.
OR
Statement of the problem
One bank nearby advertises a savings account with an annual interest rate of 1%, compounded monthly.  Another bank, all the way across town, advertises a savings account with an annual interest rate of 1%, compounded daily.

I have $5000 to invest, and I will not touch my savings for 5 years.  I remember from MTH 151 that compounding more frequently gives a higher total return on my investment. Is it worth the extra time and distance to go to the bank across town? For the purpose of this problem, let’s assume that neither bank offers online services, or that I prefer to deal with my banker in person.

Solution of the problem
The formula for compound interest is 
where	amount after n compounding periods
initial amount invested
annual interest rate
number of compounding periods per year.

For the nearby bank, 
For the across town bank, 
Although in 5 years, the interest would indeed be greater for the across town bank, the difference is only $1.30, so it is probably more worthwhile to use the nearby bank.

Other Topics:  mortgages, loans, credit cards

Grading Rubric:
Grading Criteria	Points Possible	
The problem:
•	Is it a real-life problem?
•	Is it challenging, not trivial?	5	
The strategies:
•	Are one or more general problem solving strategies used?
•	Are the strategies correctly identified?	5	
The presentation:
•	Is the problem explained well?
•	Are the problem solving strategies explained well?
•	Are the appropriate terms used?	3	
Your responses:
•	Did you post at least two responses?
•	Did you explain how the examples helped you better understand the math in this unit?
•	Did you ask questions for clarification or make suggestions on how to change or improve the original application posting or any other follow-up postings?	2