An entire lab period in GE 103 was spent on using the amortization formula to calculate the monthly payment on a house, given the price of the house, the annual interest rate, and the term of the mortgage. Students did four such calculations in class and two more individually for homework. Plus there were practice exercises assigned.
On the test, a question was asked using the identical format as on the lab, the homework, and the practice exercises. Out of 22 students:
- Number of correct answers (with correct justifications): 7
- Number of blank responses: 1
- Number of responses that used the wrong formula (compound interest or savings formula being the most popular): 3
- Number of responses using a version of amortization with a serious flaw (exponents turned into multiples, no “1 – ” term, etc.): 2
The other 9 responses set up the formula correctly but made some kind of procedural mistake, usually using the annual interest rate instead of the periodic interest rate, leading to monthly payments of somewhere in the range of $9000 per month on a $149,000 house with a 30-year mortgage.
Perhaps this is just having my standards set too high, but with as much practice as students have had on this kind of problem, and with this kind of problem being explicitly labelled on the review as being fair game, a 33% success rate is just unacceptable. How depressing — least of all for me. Like I said, there’s going to be a lot of unhappy people when I hand these tests back.