You can either buy a condo for $1,000,000 or rent it for $60,000 per year. If you

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You can either buy a condo for $1,000,000 or rent it for $60,000 per year. If you buy it, the property taxes, condo fees and maintenance will cost you 3% of the condo market value each year. You expect that the condo will appreciate by 3% each year. You plan to sell the condo in 5 years. A realtor will charge you a fee of 5% for selling the condo. There are no other significant fees associated with buying or selling this condo. Your savings are currently earning a return of 2.5%. You believe that the best way to finance the purchase is to take an ARM with an initial interest rate of 2.5% fixed for the first 5 years. According to the user cost model, should you buy or rent the condo? Explain your