Beacon Lesson Plan Library

Which Is the Better Car Deal?

Dan Schmidt
Santa Rosa District Schools


Students will be given different situations (problems) to determine which option they would take if purchasing a car. The options will be a low financing rate or a rebate.


Adds, subtracts, multiplies, and divides real numbers, including square roots and exponents using appropriate methods of computing (mental mathematics, paper-and-pencil, calculator).




Provide a calculator for each student.
Duplicate worksheets.


Pre- requisite: Students should have prior knowledge of compound interest.
A = P (1 + r/n)nt

1. Ask students if they have ever seen an advertisement for a car that offers a low financing rate or cash back (rebate.) Give them an example: On a $15,000 car, would you take a 3% finance rate for 5 years (60 months) or $3000 rebate? Allow time for debate and then take a survey. Tell students that there is a way to find out which is the better deal. Hand out worksheet (attachment one) that contains different situations for purchasing cars.
2. Have students determine the total amount that would be paid for each option. Do this for each situation.
3. Students will then determine which option they would choose and why.


Grade worksheet on a percentage basis. (Answer key attachment two)
Note: Answers for choosing options and why may vary.


Other areas I have used with compound interest with students is how to become a millionnaire and working with credit card debit.

Attached Files

Attachment one: Worksheet Attachment two: Answer Key     File Extension: pdf

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