1. Assume your monthly income is $4,500 and you have recurring debts of $500 per month. Property tax and insurance are estimated at $320 per month. If you want to buy a house by making 20% down payment and the interest rate on a 30 year mortgage is 6%, what is the value of the home you can afford? Show all steps clearly and solve.
2. Is renting or buying better? Answer based on annual costs under each case using the following data. Interest rate is 3% per year and tax rate is 30%.

Renting		Buying
Monthly rent	$750	Mortgage monthly, half of it is interest	$1,000
Insurance monthly	$20	Property tax, monthly	$120
Security deposit	$1,500	Insurance and maintenance, monthly	$100
		Down Payment and closing costs	$10,500
		Growth in equity per year	$400
		Annual appreciation	$2,500