Buying a Car, Now or Later

An interesting activity for high-school mathematics scholars is to find, correct, and analyze errors. Much of mathematical thinking and problem solving consists of self-correction such as correcting answers, changing our minds, rejecting conjectures, and making new attacks. Since we all make mistakes, locating and correcting others' mistakes is conducted in a spirit of comradery and sharing.

The more complex the formulas, the more calculating we do, the more likely the errors. However, we don't stop computing. With the aid of computers, we can answer "larger" questions and generate more comprehensive data than would be otherwise possible. With a $90 calculator, today we can perform mathematical analyses that would have been avoided in the past.

The problem stated in the lesson is: You have identified the car you would like to buy, which costs $8000. You can afford payments of $250 per month. You can either borrow the money at 10% annual interest (compounded monthly) and buy the car now, or invest the payments at 6% and pay cash for the car later. How long will it take to pay for the car each way? (Texas Instruments)