Ben and Stephanie are living in a two-bedroom apartment with a monthly rent of $1,120. Their renters insurance coverage costs $140 a year. They are considering buying a condominium. Its price is $250,000 and they plan to make a down payment of 20% and obtain a 6.0% APR (annual percentage rate) 30-year mortgage to fund the rest of the purchase. Their annual property taxes are expected to $4,900 and annual property insurance premium will be $300 while the monthly condo association fee is $150. They estimate their condo unit will appreciate (rise) in price by $5,000 each year. 1. How much are Ben and Stephanie borrowing to purchase their condo? (Hint: First find the down payment and subtract that from the price of the condo) a. $200,000 b. $210,000 c. $220,000 d. $230,000 2. How much is their monthly mortgage payment? (Hint: Monthly mortgage payment = (PV x r) / (1- 1/(1+r)t) where PV is amount borrowed or initial mortgage principal, r = monthly rate or APR / 12 in decimals and t = number of monthly payments over 30 years.) a. $1,165 b. $1,176 c. $1,182 d. $1,199 3. What is the total amount of their condo monthly payment including taxes, insurance and condo association fees?

a. $1,764 b. $1,773 c. $1,782 d. $1,795 4. What is the total monthly cost of their apartment? (Hint: Total rental cost = monthly rent + monthly cost of renters insurance) a. $1,118 b. $1,123 c. $1,132 d. $1,149 5. From a purely cost perspective, do you recommend buying or renting purely? (Hint: To get the monthly cost of buying, you should subtract the expected monthly appreciation from the total condo monthly payment found in Problem 3 and compare that with total monthly rental cost from Problem 4. Then choose the option that has a lower monthly cost) a. Renting because doing so is $199 cheaper than buying b. Renting because doing so is $234 cheaper than buying c. Buying because doing so is $145 cheaper than renting d. Buying because doing so is $267 cheaper than renting