How Should I Save To Buy A Car?
An Internet Hotlist on Savings

created by jwrives
Northwest Missouri State University


Introduction

THINGS TO THINK ABOUT IN THE FUTURE.
You are almost finished with high school and getting ready to start college. You realize in four years you will be done with college and have your dream job. So now is the time to start planning. Since you will have a contract you realize you will have money to spend, so what will you do with it? You will go out and buy a car. You find your dream car. Now back to reality, where are you going to get the money to pay for this car? Your task is to research and make a plan of how you will save your money to be able to purchase this car when you get out of school. So, let’s get started.

YOUR TASK
You need to research and make a plan of how you will save your money (from the income listed below) to be able to purchase this car when you get out of school. Use the links below to help you complete your task. Find your dream car on the Kelly’s Blue Book link below. Be specific in your plan. Ask yourself: How much do you need to save? How long do you think it will take you to save that amount? What saving strategy/institution will you use?

INCOME
o During your stay at college you do not work.
o Freshman Summer - you work 20 hrs a week making $7.50 an hr.
o Sophomore Summer – you work the same number of hours but get a $1.35 raise.
o Junior Summer – you take an internship and work 40 hrs a week and make double what you did the summer before.
o After you get out of college you will sign a contract with your dream company and will be making 33 thousand a year.

AFTER WRITING OUT YOUR PLAN ANSWER THESE FIVE QUESTIONS.


1. Why did you choose to use the type of savings strategy/institution that you did?


2. What down falls do the savings strategy/institution have that you didn’t choose?


3. How much money will you have at the end of each year if you use:
Simple interest?
Annually compounded interest?
Semi-annually compounded interest?


4. Since you are buying this car what were some of your trade offs?


5. Is this car a need or a want? Explain.




The Internet Resources

created by Filamentality Content by jwrives, jwrives@earthlink.net
http://www.kn.sbc.com/wired/fil/pages/listsavingsjw.html
Last revised Mon Nov 10 12:17:25 US/Pacific 2003