Question
Based on the following data, would you recommend buying or renting? RENTAL COST Annual rent $8,330 Insurance $240 Security deposit $1,125 BUYING COST Annual mortgage
Based on the following data, would you recommend buying or renting?
RENTAL COST
Annual rent $8,330
Insurance $240
Security deposit $1,125
BUYING COST
Annual mortgage payments $10,350(10,050 is interest)
Property taxes $2,160
Down payment/closing costs $5,050
Growth in equity $300
Insurance/maintenance $2,000
Estimated annual appreciation $2,650
Assume an after-tax savings interest rate of 8 percent and a tax rate of 26 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.)
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