Quantitative Reasoning Model

John and Bethany are newly married and they currently own no furniture.

Step 1: Understand the Problem

They are comparing the prices of two different apartments they are interested in renting for the next 12 months.

Step 2: Identify Variables and Assumptions

The first apartment costs $985 per month and is fully furnished (it has a kitchen table and chairs, a couch, a TV, a bed, and a dresser).

The second apartment costs $640 per month, but is not furnished.

They assume if they rent the second apartment they would need to provide their own furniture or live without it.

Step 3: Apply Quantitative Tools

If John and Bethany go with the unfurnished apartment rather than the fully furnished apartment, how much will they save per month?

$

Number

(Round to the nearest dollar)

The unfurnished apartment is what percent less than the furnished apartment?

Number

%

(Round to the nearest percent)

This shows that the savings from renting the unfurnished apartment are substantial.

Step 4: Make an Informed Decision

Which option would you choose? (Either answer is awarded full credit)

Option #1: I would rent the furnished apartment and enjoy nice furniture for a year.

Option #2: I would rent the unfurnished apartment and live without furniture for a while.

Option #

1

Step 5: Evaluate Your Reasoning

As part of evaluating their reasoning, John and Bethany look more closely at how much they will save.

After 12 months, renting the unfurnished apartment would result in how much savings?

$

Number

(Round to the nearest dollar)

However, if they chose this option, they would have to live without furniture for a while.

If a good quality, queen size mattress, costs around $552, and a kitchen table with two chairs costs $138, then for how many months would John and Bethany have to eat and sleep on the floor in the unfurnished apartment before they would have saved enough money to purchase the furniture.

Number

Which two of the following are some important items of follow-through to make the unfurnished apartment work for them? (Select all that apply)

Take out a loan to buy all the new furniture they need immediately.

Make arrangements to borrow or purchase low cost sleeping mats, so potential health problems from sleeping on the floor will not develop.

Discipline themselves to save so they can purchase the new bed and required furniture.