Math explorations January 25, 2019

Warm-up Let’s do our last block building problem in this class.

Marijuana arrests From Washington Post

Credit cards Let’s assume that you owe a certain amount of money on your credit card and that you are not making any new purchases. How long will it take you to pay it off? We will look at a spreadsheet. I will show you how it’s set up, and then you will make some changes. Fill out the table on the handout and turn it in (one per group is fine).

Credit cards The moral of the assignment: Never pay only the minimum payment! Banks are now obligated to tell you how long it would take you to pay off your debt if you only pay the minimum payment.

Calculating payments: student loans Suppose you have student loans totaling $8000 when you graduate from college. The interest rate is 5.05% and the loan term is 12 years. What are your monthly payments? How much will you pay over the lifetime of the loan? What is the total interest you will pay on the loan? https://studentaid.ed.gov/sa/types/loans/interest-rates

$8000? The average student debt is much higher. Look at Forbes magazine article

Monthly payment calculation I will send you the spreadsheet and you can play around with the numbers to estimate your payments. Note that in reality you may pay a different amount than the one calculated, but it should be close.

How much goes toward interest? Let us look at an amortization calculator, at http://www.amortization-calc.com/. It is always the case that your initial payments mostly go toward interest, while later payments mostly pay off the principal.

Choosing between plans If you afford to pay larger payments, your interest is much smaller. Typically, it is easier to afford smaller payments. I was told that you should always pay a little more toward interest even before you graduate from college.

Reality The reality of student loans is much more complicated. Make sure to talk to Student Financial Services!

Mortgages The exact same formula works for mortgages as does for student loans We will figure out mortgage payments on your dream home from earlier this month You will use the same spreadsheet, and I will also give you a handout. Please turn it in at the end. If there is time, we will look at the amortization calendar again.

The mortgage crisis Video explaining the crisis

Graphs of the crisis

Graphs of the crisis What questions do you have? Does this graph show discrimination?

Graphs of the crisis What questions do you have? Does this graph show discrimination?

Graphs of the crisis What questions do you have? Does this graph show discrimination?

Processing the information Literally every chart we look at will show disparity between Whites and other races, though we have primarily focused on the White-Black gap. How do you process this information? What does it mean to you? What can you do about it? Journal about this for 5 minutes.