MAT 144 Worksheet 1

You are going on a dream vacation with five of your closest friends for a week. Since you are taking a math course, your friends asked you to come up with a budget to see how much it will cost each of you. Please identify your location in the US and then determine the total costs – remember to be thorough so the group does not run out of money. Your expense list must include the following (this means that you cannot book an all-expenses paid trip) • Travel expenses, such as plane or bus fare, local travel within the area. • Lodging expenses. If you plan to camp, you will include expenses for your camping gear. • Food expenses while you are on your trip. One way to do this is to research cost of living in your destination county to find out what a local family would expect to budget to pay for food. Another is to research local restaurants and groceries. • Entertainment or activity expenses and/or miscellaneous expenses that may occur.

Loans

Suppose you all decide you want to finance the trip with a loan. Find two different available offers (the internet is a good source). Make sure the interest rate and loan length are both different in each option. Calculate the monthly payment amount, the total amount you will pay over the life of the loan and the total interest you will pay. NOTE: Do not provide personal information on the internet. You can find loan rates on major bank and credit union websites without providing personal information. Loan payment formula: PMT = P*(r/n)/(1 – (1 + r/n)^(-n*t)) PMT is the payment required to pay off a loan of $P at interest rate, r%, compounded n times per year for t years. You must use Excel formulas including cell references to calculate the loan payment, total paid and interest paid. Discuss which loan would be a better option and why: (14 points!)

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