m4d1 remodeling the kitchen
M4D1: Remodeling the Kitchen – Math 101 – Group #1
From MAT101: MATHEMATICS FOR EVERYDAY LIFE JAN2021 30077273 [8wk]
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In this discussion, you will work in small groups in online discussions to solve a mathematics problem about financing a kitchen remodeling project. This group discussion will help prepare you for activity M4A2, in which you will write and submit an individual complete solution to a related problem.
Answer the following questions.
Ramona Garcia will be remodeling her kitchen before she places her home on the market to sell. She researched what three local companies would charge her for the remodeling and their best financing option for each company. Her research revealed the following results.
Company
Total Remodeling Cost
Financing Terms Ramona is Considering
Large Home Improvement Store
$13,200
Financing through the bank servicing the national home improvement company: 1 year 0% financing with a minimum monthly payment of $100; 16.99% APR for the remaining 3 years
Local Small Business Home Improvement Company
$11,800
Financing through her local credit union: 3% origination fee to be paid first then 7.5% APR for 5 years
Online Construction Business
$10,200
Financing through an online banking service: $1,000 applied toward the project before payback begins then 11.9% APR for 4 years.
Calculate the monthly payments for each option given that interest is compounded monthly.
What is the total amount that must be paid for each option?
What percentage of the total amounts to be paid back to each financial institution is interest?
How would you explain to Ramona the differences between these percentages and their corresponding APR’s?
Based on the financial outcomes for each option, which company would you suggest that Ramona choose to remodel her kitchen? Defend your suggestion.
