Lesson Plans: Real World Math

real world math

The economists are telling us that now may be the time to buy a house. According to a report this week in Bloomberg BusinessWeek, mortgage rates are the lowest on record. Real estate specialists tell us that there are lots of properties available. It’s a buyer’s market.

But why are we writing about this here? Because, like so many other real-life activities, becoming a homeowner involves a lot of math. Just listen to this sentence from the Bloomberg BusinessWeek article: “Buying a $300,000 home at current rates means a monthly mortgage bill of about $1,158, assuming a 20 percent down payment. Delaying a purchase until next year would put the tab higher, at $1,186, based on the MBA forecast for prices and rates. That amounts to an $18,000 difference over a 30-year mortgage for those who wait.”

As we’ve learned time and again from the educators, employers and employees featured on ATETV, math is critical for just about every technical skill and vocation. But there’s no question that math and algebra, in particular, have a lot of practical applications beyond the classroom and the workplace.

Think you’ll never use algebra in real life? We turned to ATE Central and found the following algebra lesson plans. They sound pretty valuable in today’s real estate market.

How Much Does This House Really Cost? Buying a house is likely to be the single largest financial purchase a person ever makes. And unless you’re in the enviable – and unlikely — position that enables you to pay the entire cost upfront, you’ll have to get a mortgage. Check out this lesson plan from the Center for Innovation in Engineering and Science Education to learn how mortgages are calculated and to better understand what the costs of a property will be over the course of 30 years. Using a hypothetical mortgage amount, students enter their geographic living areas on a financial website to determine current mortgage interest rates (from dozens of nearby lending institutions).

Students then calculate the monthly mortgage payment using a given formulation, a scientific or graphing calculator and online interest rates and calculate the total amount paid for the house at the end of a 30-year mortgage, with interest included. They also compare results with the same mortgage calculated over 10, 15 or 20 years.

Okay, so students have taken out their hypothetical mortgages. But what if they’d like to pay those hypothetical loans off early? The Extra House Payments Effect lesson plan gives students a first-hand look at how financial institutions make use of monthly mortgage payments and describes mortgage amortization formulas. (The plan also explains the effect of making extra principal payments each month on both the length of the loan and the amount of interest to be paid – important lessons for everyone!)

Finally, new student “homeowners” can turn their attention to their lawns and landscaping. The Do I Have to Mow the Whole Thing? lesson plan helps students calculate dimensions for a garden of constant area, introducing them to the idea of inverse variation.

Check out ATE Central and the Real World Learning Objects Resource Library for more real-life lesson plans, including Cell Phone Algebra (in which students compare cell phone plans), Logarithms and Car Payments and Algebra for Athletes.

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