2. Comparing Renting and Buying. Based on the following data, would you recommend buying or renting?

Rental Costs Buying Costs Annual rent, $7,380 Insurance, $145 Security deposit, $650 Annual mortgage payments, $9,800 ($9,575 is interest)

Property taxes, $1,780 Insurance/maintenance, $1,050 Down payment/closing costs, $4,500 Growth in equity, $225 Estimated annual appreciation, $1,700 Assume an after-tax savings interest rate of 6 percent and a tax rate of 28 percent. (Obj. 2)