MA.912.F.3.12Archived Standard

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Compare the cost of paying a higher interest rate and lower points versus a lower interest rate and more points.

Remarks

Example: Assuming all of the following were originally 15 year mortgages, which fixed rate mortgage cost the mortgagor the least?

a) 7.375% interest + 0 points paid off in 10 years
b) 7.375% interest + 0 points paid off in 7 years
c) 7 % interest + 3 points paid off in 10 years
d) 7 % interest + 3 points paid off in 7 years
General Information
Subject Area: X-Mathematics (former standards - 2008)
Grade: 912
Body of Knowledge: Financial Literacy
Idea: Level 2: Basic Application of Skills & Concepts
Standard: Loans and Financing - Become familiar with and describe the advantages and disadvantages of short-term purchases, long-term purchases, and mortgages.
Date Adopted or Revised: 09/07
Content Complexity Rating: Level 2: Basic Application of Skills & Concepts - More Information
Date of Last Rating: 06/07
Status: State Board Approved - Archived

Related Courses

This benchmark is part of these courses.
1200500: Advanced Algebra with Financial Applications (Specifically in versions: 2014 - 2015 (course terminated))
7921022: Access Economics with Financial Literacy (Specifically in versions: 2014 - 2015, 2015 - 2018, 2018 - 2023, 2023 and beyond (current))

Related Access Points

Alternate version of this benchmark for students with significant cognitive disabilities.

Related Resources

Vetted resources educators can use to teach the concepts and skills in this benchmark.

Lesson Plan

Shopping for a Home Mortgage Loan:

Students will analyze the data given to decide which type of loan they will buy. After selecting their options, students will estimate the first loan payment. FHA loans offer a better interest rate than conforming loans, but buying premium insurance is a requirement to qualify for an FHA loan, increasing the upfront cost of the loan. Fixed interest rate loans seem like the best choice because you have the same mortgage payment every month; however, adjustable rate loans offer a better interest rate and it has a cap on the interest rate.

Model Eliciting Activities, MEAs, are open-ended, interdisciplinary problem-solving activities that are meant to reveal students’ thinking about the concepts embedded in realistic situations. Click here to learn more about MEAs and how they can transform your classroom.

Type: Lesson Plan

STEM Lessons - Model Eliciting Activity

Shopping for a Home Mortgage Loan:

Students will analyze the data given to decide which type of loan they will buy. After selecting their options, students will estimate the first loan payment. FHA loans offer a better interest rate than conforming loans, but buying premium insurance is a requirement to qualify for an FHA loan, increasing the upfront cost of the loan. Fixed interest rate loans seem like the best choice because you have the same mortgage payment every month; however, adjustable rate loans offer a better interest rate and it has a cap on the interest rate.

Model Eliciting Activities, MEAs, are open-ended, interdisciplinary problem-solving activities that are meant to reveal students’ thinking about the concepts embedded in realistic situations. Click here to learn more about MEAs and how they can transform your classroom.

Student Resources

Vetted resources students can use to learn the concepts and skills in this benchmark.

Parent Resources

Vetted resources caregivers can use to help students learn the concepts and skills in this benchmark.