Real Estate Lesson

MONTHLY PAYMENTS

FOCUS OF LESSON

The purposes of this lesson are give students opportunities to find collect real world data regarding real estate in major cities from the Web, organizing this data for the purpose of graphing it, then finally finding a function which models this data.

NCTM STANDARDS

• Analyze real world data.
• Fit functions to real world data.
• Model real world phenemona.

• Collect and organize real world data.
• Present this data on a coordinate plane by identifying an independent and dependent variable.
• Analyze and interpret the data.
• Fit a function to model the data and make predictions

1. Load Netscape
2. Link to HOUSTON REAL ESTATE ONLINE
3. Select an area of Houston from which you would like to purchase a house.
4. Select "Houston Area Listing" found by scrolling to the bottom of the page.
5. Select "Mortgage Calculator".  Here you will type in the price of the house you selected and a current rate of interest. Now use the "mortgage calculator" to calculate the amount of monthly payments for 30, 25, 20 and 15 years.

6. Choose an independent variable and organize these four data sets in a chart, for example
   
   

7. $89,000 house at %8.25 interest

   Number of years	Amount of monthly payment
   18 years	$975.25
   10 years	$1107.92

8. Now graph these data points using whatever scales appropriate to display the information in an interpretable form.

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ANALYSIS AND INTERPRETATION

1. Find a function which best models these data points and write its equation.

2. Describe the function you chose and explain why you think it is appropriate.

3. Estimate from your graph the amount of monthly payment one would have to make on a 22 year and 12 year loan.

4. Now use your function to verify that your estimates are reasonable

EXTENSION

Use a TI-82 or 83 calculator to run a regression analysis on your data set and compare the regression equation with the function you found.

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