Based on the following data, calculate the items requested: Rental Costs Buying Costs Annual rent $ 7,530 Annual mortgage payments $ 10,100 (9,650 is interest) Insurance $ 160 Property taxes $ 1,840 Security deposit $ 725 Down payment/closing costs $ 4,800 Growth in equity $ 450 Insurance/maintenance $ 1,200 Estimated annual appreciation $ 1,850 Assume an after-tax savings interest rate of 5 percent and a tax rate of 26 percent. Assume this individual has other tax deductions that exceed the standard deduction amount. a. Calculate total rental cost and total buying cost. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) b. Would you recommend buying or renting? multiple choice Renting Buying
Based on the following data, calculate the items requested: Rental Costs Buying Costs Annual rent $ 7,530 Annual mortgage payments $ 10,100 (9,650 is interest) Insurance $ 160 Property taxes $ 1,840 Security deposit $ 725 Down payment/closing costs $ 4,800 Growth in equity $ 450 Insurance/maintenance $ 1,200 Estimated annual appreciation $ 1,850 Assume an after-tax savings interest rate of 5 percent and a tax rate of 26 percent. Assume this individual has other tax deductions that exceed the standard deduction amount. a. Calculate total rental cost and total buying cost. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) b. Would you recommend buying or renting? multiple choice Renting Buying
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Based on the following data, calculate the items requested:
| Rental Costs | Buying Costs | |||
|---|---|---|---|---|
| Annual rent | $ 7,530 | Annual mortgage payments | $ 10,100 | (9,650 is interest) |
| Insurance | $ 160 | Property taxes | $ 1,840 | |
| Security deposit | $ 725 | Down payment/closing costs | $ 4,800 | |
| Growth in equity | $ 450 | |||
| Insurance/maintenance | $ 1,200 | |||
| Estimated annual appreciation | $ 1,850 |
Assume an after-tax savings interest rate of 5 percent and a tax rate of 26 percent. Assume this individual has other tax deductions that exceed the standard deduction amount.
a. Calculate total rental cost and total buying cost. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)
b. Would you recommend buying or renting?
multiple choice
-
Renting
-
Buying
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