Based on the following data, would you recommend buying or renting?

Rental Costs Buying Costs
Annual rent	$	7,830	Annual mortgage payments	$	10,700	(9,800 is interest)
Insurance	$	190	Property taxes	$	1,960
Security deposit	$	1,100	Down payment/closing costs	$	5,400
			Growth in equity	$	900
			Insurance/maintenance	$	1,500
			Estimated annual appreciation	$	2,150

Assume an after-tax savings interest rate of 7 percent and a tax rate of 32 percent. Assume this individual has other tax deductions that exceed the standard deduction amount.

a.	Calculate total rental cost and total buying cost. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

Rental cost	$
Buying cost	$

b.

Would you recommend buying or renting?

	Buying
	Renting