Scenario: Consider your last big purchase such as a car, appliances, home repairs, home purchase, computer equipment, college tuition, or another “big-ticket” item, which are often purchased using loans/financing (by borrowing money). Also consider your decision-making process that led you to choose a particular make, model, or brand of the product (or service) you purchased and whether it was the right time to make the purchase. While analyzing your decision, keep in mind everything from interest rates to the prices of complementary and substitute goods are driven by human economic behavior.
Develop a minimum 500-750 word analysis of your decision-making process in which you include the following:
Introduction (discuss the purchase you will discuss and give information on what you will cover regarding the purchase)
What did you purchase and what prompted you to make the purchase at that time? Consider your decision-making process that led you to choose a particular make, model, or brand of the product (or service) you purchased. Was it the right time to make the purchase?
Discuss substitutes and/or complements you considered prior to making your purchase.
Please discuss the sales tax rate that applied to your purchase (6%, 6.5%, 7%, etc.). Explain why your purchase was or was not impacted by the discretionary sales surtax. In your discussion, you MUST include the appropriate graph of the Florida Sales Tax that applied to your purchase (http://floridarevenue.com/taxes/taxesfees/Pages/sales_tax.aspx, How Tax is Calculated, then download PDF file and cut and paste the table that applies to you). If your purchase was out of state/country, you must provide the tax rate information from a government website.
If you took out a loan to pay for your “big-ticket” purchase, what was the interest rate on your loan? Were interest rates rising or falling at that time? Were interest rates relatively high or low at that time? To find the interest rates at the time of your purchase and for your type of product/service, go to BankRate.com or www.creditkarma.com. Include the table of rates for the 6 months prior AND 6 months after the purchase (for a total of 12 months of data). If you made the purchase less than 6 months ago, provide a total of 12 months data anyway (you will have more historical data). IF YOU DID NOT FINANCE YOUR PURCHASE, say so in your paper and do research (use bankrate or creditKarma) to include the last 12 months of interest rate data being charged for ONE of these lending products: CREDIT CARDS, MORTGAGES, OR AUTO LOANS. You MUST include the graph of these statistics in your report. For your google search you may look for: “trends in mortgage rates”, “trends in credit card interest rates”, “trends in auto loan rates”.
Discuss the influence of any Federal government or state government programs, such as tax credits or tax deductions for energy-saving/efficiency purchases, on your decision to make your last big purchase; or if government incentives did not factor into your decision, explain why not.
Conclusion (summarize what you covered. Do not include new information).
Cite and include in references a minimum of three peer-reviewed sources. Note: You must use the textbook and a government website on taxes (use the one I provided if your purchase was in Florida). Feel free to use bankrate.com or other reputable reference if your purchase was made with a loan. You need a 3rd reputable citation and reference.
Format your paper consistent with APA guidelines.