An investor plans to purchase a home for $$275,000.$ Property taxes are $$1,750$

per year while insurance premiums are estimated to be $$750\mathrm{.}00$ per year. Annual repair

and maintenance is estimated at $$1,400$ per year. An alternative is to rent a House of the

same size for $$1,600$ per month. If an $8\%$ return before taxes is the investors minimum

rate of return,

a$.$ what must the resale value be $10$ years from today for the cost of ownership to

equal the cost of renting?

b$.$ What is the corresponding annual price escalation in the investment of the house

over $10$ years