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Stanford: Mortgage loans intellectually engaging?!



ilovemath 3 / 2  
Dec 24, 2010   #1
STANFORD STUDENTS ARE WIDELY KNOWN TO POSSESS A SENSE OF INTELLECTUAL VITALITY.TELL US ABOUT AN IDEA OR AN EXPERIENCE YOU HAVE HAD THAT YOU FIND INTELLECTUALLY ENGAGING.

Stubbornly, I jabbed the enter button on my TI-84 calculator for the 18th time, and the 18th "583,095.6" appeared on the screen, taunting and teasing me. Did I calculate incorrectly or was I hallucinating? Mathematical reasoning and simple logic told me that this number was too large and lumpy to swallow. I had to be wrong, but I flipped to the solution guide and saw $583,095.60 appear on the page.

For once, I wish I had the incorrect answer. I wish any number smaller than 583,095.6 appeared on my calculator screen because I refused to believe that anyone would pay $583,095.60 for a $250,000 home. One simple formula- the mortgage formula- that I learned in Trig/Math Analysis changed my perspective on finance and numbers.

But why? Why did a $250,000 home paid over 30 years at 7.8 percent interest cost $583,095.60? A simple mortgage formula, a set of innocuous looking variables, produced the cold truth.

Loans, as friendly as they may seem, causes millions of Americans to continue on a cycle of debt. A set of innocent-looking numbers that say "you only pay 7.8 percent a year" actually adds up over the span of 30 years. Through 30 years of monthly payments, a home costs more than twice the sticker tag price.

As someone who enjoys doing math, I finally viewed math abstractly. Numbers can be twisted, and from learning the mortgage formula, I've observed that playing with numbers is a dangerous game- one that can result in debt, rampant foreclosures, and ruined credit.

Hi, this prompt would work well for sciences, but i'm not a science fanatic haha. Anyways, please feel free to critique! Thanks in advance~

hahoonh 4 / 12  
Dec 24, 2010   #2
yeah, this topic fits with the prompt. In addition, you do not need to be a science fanatic in order to do well on this prompt. I mean, I wrote about how I struggled from making the haunted house scarier, and people told me it worked alright!

you have a good shot! good luck!


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