Data-Based Decisions – Car Purchase Scenario
For this assignment, I chose the car purchase scenario. Suppose I want to purchase a small SUV whose price is $30,000 at an interest rate of 6%. For the six-term year loan, the monthly payment will be $497.19, and the number of payments will be 72. The total interest amount for the six-year term loan will be $5,797.44, and the total cost of the loan $35,797.44. On the other hand, the monthly payment for the three-year term loan is equivalent to $912.66, and the number of payments is 36. The total interest for the three-year term loan will be $2,855.69, and the total cost of the loan $32,855.69. Thus, if I go for the shorter term, the three-year loan term, I will save 36 months and $2,941.75. Hire our assignment writing services in case your assignment is devastating you.
I would be inclined to increase my monthly payments. When one increases the monthly payment, the increase is applied directly to the principal (Dlabay, Kapoor, & Hughes, 2016). Increasing the monthly payments will lower the interest one will pay over the repayment duration since the interest rate will only apply to the outstanding balance.
After analyzing the data, I would take the shorter-term loan. The longer one takes to repay a loan, the more interest one pays overall. In addition, a longer loan term may mean a higher rate of interest (What Hollywood Teaches Us About. (2018). Therefore, the best option would be to make a down payment and consider the shortest loan term possible.
References
Dlabay, L., Kapoor, J., & Hughes, R. J. (2016). Personal Finance. McGraw-Hill Professional Publishing.
What Hollywood Teaches Us About. (2018, April 19). Moneyball: Data-based decisions [Video]. YouTube. https://www.youtube.com/watch?v=qmOKxYsS5g4
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Question 
Data-Based Decisions – Car Purchase Scenario
The sole purpose of collecting and examining data is to help us understand what is happening in the world around us so we can make better decisions. We use data, along with experience, to make decisions at work and at home.
View this video to explore how experience and data are used when making decisions.
Moneyball: Data-based Decisions (YouTube 5:29) (Links to an external site.)
Now, think about a significant purchase that you have made in your life. Did you use data to help make an informed decision?
In this discussion, you’ll use a spreadsheet to calculate data associated with financing the purchase of a car or a house. To get started, decide whether you want to buy a car or a house and then identify the item’s cost and the expected interest rate. Use reliable sources to estimate the actual price in the area you expect to buy.
Calculate the Data
Download the Simple Loan Calculator and Amortization Table (XLSX). Download Simple Loan Calculator and Amortization Table (XLSX).In cell E3, add the expected cost of your car or house. In cell E4, enter the annual interest rate. Review the updated results in cells (E8-E11). Calculate the following for your selected scenario.
Car Scenario
6-year loan
3-year loan
House Scenario
30-year loan
15-year loan
Interpret, Post & Reply
Interpret the data and include the following in your initial post.
Identify your scenario – either car or house.
Analyze the interest amount you will pay for each loan term. How much interest will you pay? How much money and time will you save if you go with a shorter loan term?
Discuss whether you would be inclined to increase your monthly payment to shorten the loan’s length and save money by not paying interest. Why or why not?
Explain how the data influenced your decision.
Tip: Copy and paste the questions into your initial post.
Your initial post should be long enough to sufficiently address the prompts, but no more than 250 words.
Post your explanation by the end of the fourth day of the module week. Return to the discussion later in the module week and reply to at least two of your classmates’ posts. In your reply, discuss whether you were surprised by these calculations and how their scenarios could apply to your situation. Your replies should be 50-100 words.