Concept: Mortgage
March brings the decision to buy a home or rent while keeping a close eye on the monthly expense statement. Participants manipulate the downpayment and terms of the loan in order to make the best use of their financial resources.
Objectives
Learners will:
- Evaluate monthly income/expense statements
- Investigate the impact of a major long-term expense (mortgage)
- Manipulate options that lead to a financial decision
- Investigate using savings for an expenditure
- Compare home-buying/renting options
Knowledge and Ideas:
- Cost of living (housing)
- Comparison shopping
- Income and expenses
- Mortgage/downpayment
- Relationship between the downpayment and terms of a mortgage
- Homeowner's Insurance
- Equity (resale value/appreciation)
Skills and Capabilities:
- Reading an income/expense statement
- Budgeting
- Prediction and estimation
- Locating and comparing information that leads to a financial decision
- Determining the cost of borrowing money (mortgage)
Values:
- Wants vs. needs
- Awareness of living expenses
- Financial planning (long-term)
- Home ownership
- Commitment to repayment
National Standards: Mathematics
- Uses basic estimation techniques effectively (e.g., overestimate, underestimate, range of estimations). (Benchmark, procedural; Curriculum and Evaluation Standards for School Mathematics, National Council of Teachers of Mathematics, 1989, 94; Mathematics Content Specs, 8, National Assessment of Educational Progress, 6; Mathematics Assessment Framework, National Assessment of Educational Progress, 26.)
- Solves real-world problems involving percents. (Benchmark, procedural; Curriculum and Evaluation Standards for School Mathematics, National Council of Teachers of Mathematics, 1989, 87; Benchmarks for Science Literacy, American Association for the Advancement of Science, 1993, 291; Mathematics Content Specs, 8, National Assessment of Educational Progress, 8; Mathematics Assessment Framework, National Assessment of Educational Progress, 27.)
- Selects and uses appropriate type of estimation (e.g., overestimate, underestimate, range of estimate) to solve real-world problems. (Benchmark, procedural;Curriculum and Evaluation Standards for School Mathematics, National Council of Teachers of Mathematics, 1989, 94; Mathematics Content Specs, 8, National Assessment of Educational Progress, 6-7; Mathematics Assessment Framework, National Assessment of Educational Progress, 26.)
- Interpolates or extrapolates from data presented in various forms (Benchmark, procedural; Curriculum and Evaluation Standards for School Mathematics, National Council of Teachers of Mathematics, 1989, 105-107; Mathematics Content Specs, 8, National Assessment of Educational Progress, 21; Mathematics Assessment Framework, National Assessment of Educational Progress, 36.)
- Constructs, reads, and interprets data in charts, tables, and graphs. (Benchmark, procedural; Curriculum and Evaluation Standards for School Mathematics, National Council of Teachers of Mathematics, 1989, 105-107; Mathematics Content Specs, 8, National Assessment of Educational Progress, 22; Mathematics Assessment Framework, National Assessment of Educational Progress, 37.)
National Standards: Economics
- Knows that all decisions involve opportunity costs and that effective
economic decision making involves weighing the costs and benefits associated
with alternative choices.
(Benchmark, declarative; Framework for Teaching Basic Economic Concepts with Scope and Sequence Guidelines, K-12, Saunders & Gilliard, 1995, 92; Colorado Council on Economic Education, 4; Economics: What and When, JCEE, 17; Expectations of Excellence: Curriculum Standards for Social Studies, NCSS, 1994, 41.) - Understands that not all competition is on the basis of price for identical
products and that nonprice competition includes style and quality differences,
advertising, customer services, and credit policies.
(Benchmark, declarative; Framework for Teaching Basic Economic Concepts with Scope and Sequence Guidelines, K-12, Saunders & Gilliard, 1995, 94; Colorado Council on Economic Education, 6; Economics: What and When, JCEE, 32; Expectations of Excellence: Curriculum Standards for Social Studies, NCSS, 1994, 41.)
National Standards: Life Skills
- Makes effective decisions about consumer products based on important
criteria, including external features, performance, durability, cost, and
personal tradeoffs.
(Benchmark, procedural; Benchmarks for Science Literacy, Project 2061, American Association for the Advancement of Science, 1993, 299.) - Uses sound buying principles for purchasing goods and services.
(Benchmark, procedural; Workplace Basics: The Essential Skills Employers Want, Carnevale, Gainer & Meltzer, 1990, 281-283.) - Understands basic banking services (e.g., checking accounts, savings
accounts).
(Benchmark, declarative; Workplace Basics: The Essential Skills Employers Want, Carnevale, Gainer & Meltzer, 1990, 281.) - Makes forecasts regarding future income and expenses.
(Benchmark, procedural; Report for America 2000, SCANS, xvii.)
Wisconsin's Model Academic Standards: Language Arts, E. Media and Technology.
Students in Wisconsin will use media and technology critically and creatively to obtain, organize, prepare and share information; to influence and persuade; and to entertain and be entertained.
Learners will:
- Use computers to acquire, organize, analyze. and communicate information (E.8.1).
- Collect information from various on-line sources, such as web pages, news groups ands listservs (E.8.1).
Wisconsin's Model Academic Standards: Mathematics
Learners will:
- Use reasoning abilities to
- evaluate information
- perceive patterns
- identify relationships
- formulate questions for further exploration
- evaluate strategies
- justify statements
- test reasonableness of results
- defend work (A.8.1.)
- Communicate logical arguments clearly to show why a result makes sense (A.8.2).
- Read and understand mathematical texts and other instructional materials and recognize mathematical ideas as they appear in other contexts (A.8.6).
- Use reason and logic to evaluate information (A.12.1).
- Communicate logical arguments and clearly show
- why a result does or does not make sense
- why the reasoning is or is not valid (A.12.2).
- Analyze nonroutine problems and arrive at solutions by various means, including models and simulations, often starting with provisional conjectures and progressing, directly or indirectly, to a solution, justification, or counter-example (A.12.3)
- Read and understand
- mathematical texts and other instructional materials
- writing about mathematics (e.g., articles in journals)
- mathematical ideas as they are used in other contexts (A.12.6).
- Perform and explain operations on rational numbers (add, subtract, multiply, divide) (B.8.2).
- Apply proportional thinking in a variety of problem situations that include, but are not limited to
- ratios and proportions (e.g., rates, scale drawings, similarity)
- percents, including those greater than 100 and less than one (e.g., discounts, rate of increase or decrease, sales tax) (B.8.5).
- In problem-solving situations, select and use appropriate computational procedures with rational numbers such as
- calculating mentally
- estimating
- using technology (e.g., scientific calculators, spreadsheets) (B.8.7).
- Compare real numbers using
- order relations (>, <) and transitivity
- arithmetic differences
- ratios, proportions, percents, rates of change (B.12.2)
- Perform and explain operations on real numbers (add, subtract, multiply, divide) (B.12.3).
- Create and critically evaluate numerical arguments presented in a variety of classroom and real-world situations (e.g., political, economic, scientific, social) (B.12.5).
- Routinely assess the acceptable limits of error when
- evaluating strategies
- testing the reasonableness of results
- using technology to carry out computations (B.12.6).
- Determine measurements indirectly using estimation (D.8.4, D.12.3).
- Work with data in the context of real-world situations by
- formulating questions that lead to data collection and analysis
- using technology to generate displays, summary statistics and presentations (E.8.1).
- Organize and display data from statistical investigations using appropriate tables, graphs, and/or charts (e.g., circle, bar or line for multiple sets of data) (E.8.2).
- Use the results of data analysis to
- make predictions
- develop convincing arguments
- draw conclusions (E.8.4)
- Determine the likelihood of occurrence of simple events by
- using a variety of strategies to identify possible outcomes (e.g., lists, tables, tree diagrams)
- conducting an experiment
- designing and conducting simulations
- Work with data in the context of real-world situations by
- formulating hypotheses that lead to collection and analysis of one- and two-variable data
- using technology to generate displays, summary statistics, and presentations (E.12.1).
Wisconsin's Model Academic Standards: Social Studies, D. Economics: Production, Exchange and Consumption.
Learners will:
- Explain the operations of common financial instruments and financial institutions (D.12.9).
- Describe and explain the role of money, banking, and credit in every day life (D.4.1).
Illinois Learning Standards: State Goals 6-10: Mathematics
Learners will:
- Solve practical computation problems involving whole numbers, integers and rational numbers (6.B.3a).
- Select and use appropriate arithmetic operations in practical situations including calculating wages after taxes, developing a budget and balancing a checkbook (6.B.4).
- Select computational procedures and solve problems with whole numbers, fractions, decimals, percents and proportions (6.C.3a).
- Show evidence that computational results using whole numbers, fractions, decimals, percents and proportions are correct and/or that estimates are reasonable (6.C.3b).
- Solve problems involving recipes or mixtures, financial calculations and geometric similarity using ratios, proportions and percents (6.D.4).
- Solve problems involving loans, mortgages and other practical applications involving geometric patterns of growth (6.D.5).
- Apply formulas in a wide variety of theoretical and practical real-world measurement applications involving perimeter, area, volume, angle, time, temperature, mass, speed, distance, density and monetary values (7.A.4b).
- Apply the properties of numbers and operations including inverses in algebraic settings derived from economics, business, and the sciences (8.C.3).
- Construct, read and interpret tables, graphs (including circle graphs) and charts to organize and represent data (10.A.3a).
Illinois Learning Standards: State Goal 15 U. S. Economic Systems
Learners will:
- Explain why consumers must make choices (15.B.1).
- Identify factors that affect how consumers make their choices (15.B.2a).
- Explain that when a choice is made, something else is given up (15.B.2c).
Minnesota--The Profile of Learning: Preparatory Standards (High School Level)
Mathematics
Learners will:
- Use properties of mathematics to justify reasoning in a logical argument.
- Translate between real-world situations and mathematical models using:
- graphs
- data tables and/or spread sheets
- verbal descriptions.
Personal and Family Resources Management
Simulations should require students to manipulate unexpected factors which
complicate real-life financial management.
Learners will:
Apply the fundamentals of personal/family resource management through informed decision-making.
- Know personal finance terminology.
- Know the use of banking services.
- Evaluate personal financial services (e.g., checking accounts, savings accounts) and cash/credit options.
- Conduct financial analysis using mathematical techniques including cost analysis.
- Understand sound buying principles (e.g. comparison shopping).
- Understand issues involved in renting or buying a home.
- Understand insurance options (e.g. life, health, auto).
- Create plans for major purchases.
- Analyze a household budget.
- Analyze how to manage household resources considering broader economic and environmental systems.
Minnesota--The Profile of Learning: Preparatory Standards (Middle School Level)
Mathematics
Learners will:
- Use number concepts, relationships and computational procedures to communicate, solve problems and evaluate results.
- Given problems with proposed solutions, analyze and justify operations and methods used.
- Apply proportional reasoning to solve a variety of problems using rates, ratios, proportions and percents.
- In problem situations connect verbal, symbolic and graphical representations, identify constraints, propose and justify solutions.
- Use properties of mathematics to informally justify reasoning in a logical argument.
Managing Resources: Technology Applications
Learners will:
- Access and evaluate information from electronic sources.
Managing Resources: Informed Consumerism
Learners will:
- Compare wants, needs and available resources.
- Use information to compare and contrast potential purchases.
- Evaluate the impact of the total purchase on the total household budget.
Managing Resources: Personal Resources
Learners will:
- Effectively manage personal resources to meet a goal or solve a problem
Tools:
- Budget planning
- How much house can I buy
- Home Buyer's Calculating Tool
Financial Products:
- Home loans
- Transfer funds
