Suppose you are considering whether to purchase a house off of Lake Erie for $400,000.  You expect the total costs of maintaining the property (utilities, repairs, etc.) to equal $15,000/year, and that you would be able to generate $35,000/year in revenue if you were to put the house on the short term rental market.  Suppose you are deciding between purchasing the home or whether to invest $400,000 in an interest-bearing account.  If your objective is to maximize your own net income, what would the interest rate have to equal for you to invest in the interest-bearing account?     Can you help me just figure out how to set this up? I get that we need the investment to equal 20k but not sure on how to figure

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Suppose you are considering whether to purchase a house off of Lake Erie for $400,000.  You expect the total costs of maintaining the property (utilities, repairs, etc.) to equal $15,000/year, and that you would be able to generate $35,000/year in revenue if you were to put the house on the short term rental market.

 Suppose you are deciding between purchasing the home or whether to invest $400,000 in an interest-bearing account.  If your objective is to maximize your own net income, what would the interest rate have to equal for you to invest in the interest-bearing account?  

 

Can you help me just figure out how to set this up? I get that we need the investment to equal 20k but not sure on how to figure out interest rates.

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