Mortgage Performance Task

My kids have been learning about interest and my husband and I have been working on selling our house and buying a new house to make room for our soon-to-be family of 5 (!), so I figured I would combine the two and made an activity involving both.

I thought it was a pretty good activity, but then I read the responses from my first class and I was blown away!  I was so pleased to see how many of them thought outside of the box when they gave me their responses.

The activity: I gave them a house price and 4 different loan options.  I changed the rate, loan term, and down payment for each loan option.  Students had to find the interest and total repayment price of all 4 loans and then explain to me which choice was the best and why.  I figured it would be pretty cut and dry that students would tell me that the lowest price was the best option.

But then several students gave me some very intersting answers, that I graded just the same as those who gave me the cheapest option, some even received above our grade level score (3.0 is grade level, 3.5 and 4.0 are above).  Some of these responses included:

Option __ is best because it is the second cheapest option, but you pay off the loan in 15 years instead of 30, so you own the house earlier.  Great answer!  Love it!

Option __ is best because even though it isn’t the cheapest, the monthly price is _____ which is cheaper than __’s monthly price, so it is more affordable right now when you might not have as much money.  (While you also need to balance long term thinking, I still think this is pretty awesome, especially since we didn’t do any work figuring out the monthly payment!)

All in all, I would definitely do this activity again in the future, and I hope you guys like it too!  Make sure you chance the intro, unless you and I have the same last name, you are also expecting twins, and you are also buying a new house.

Before I close, I want to mention 2 things-

1. I am SO excited for the stuff I will be doing for my next unit when we start geometry.  There are many wonderful things from other people’s blogs that I have tagged long ago that I am finally going to be able to use!  Stay tuned!

2. I totally forgot how much I love http://kutasoftware.com/.  If you aren’t familiar, go there.  Right now.  I mean it.  I do not have a membership and it is still one of the best resources I have ever used.  It is amazing!

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