A man purchased a house for P425,000.00. In the first month that he owned the house, he spent P75,000.00 on repairs and remodeling. Immediately after the house was remodeled, he was offered (Option 1) P545,000.00 to sell the house. After some consideration, he decided to keep the house and have it rented for P4,500.00 per month starting two months after the purchase. (Option 2) He collected rent for 15 months and then sold the house for P600,000.00. If the interest rate was 1.5% per month, which option is better?
A man purchased a house for P425,000.00. In the first month that he owned the house, he spent P75,000.00 on repairs and remodeling. Immediately after the house was remodeled, he was offered (Option 1) P545,000.00 to sell the house. After some consideration, he decided to keep the house and have it rented for P4,500.00 per month starting two months after the purchase. (Option 2) He collected rent for 15 months and then sold the house for P600,000.00. If the interest rate was 1.5% per month, which option is better?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A man purchased a house for P425,000.00. In the first month that he owned the house, he spent P75,000.00 on repairs and remodeling. Immediately after the house was remodeled, he was offered (Option 1) P545,000.00 to sell the house. After some consideration, he decided to keep the house and have it rented for P4,500.00 per month starting two months after the purchase. (Option 2) He collected rent for 15 months and then sold the house for P600,000.00. If the interest rate was 1.5% per month, which option is better?
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