eBook Chapter 5 Critical Thinking Case 3 Sophia's Rent-or-Buy Decision Sophia Harris is a single woman in her late n for $1,100 a month. After much thought, she's seriously considering 20s. She is renting an apartment in the fashionable part of town buying a condominium for $175,000. She intends to put 20 percent down and expects that closing costs will amo money at the fixed rate of 6 percent on a 15-year mortgage. Sophia would pay an year (she's now paying insurance (which includes a $30 monthly fee to the property and she earms an after-tax rate of return on her investments of around 4 percent to another $5,000; a commercial bank has agreed to lend her ave to pay an annual condominium owner's insurance premium of $560 and property taxes of $1,100 a will be about 0.5 percent of the price of the condo renter's insurance of $550 per year). In addtion, she estimates that annual maintenance expenses association). Sophia's income puts her in the 25 percent tax bracket (she itemizes her deductions on her tax 1. Given the information provided, use Worksheet S.2 to evaluste,and compare Sophia's alternatives of remaining in the apartment or purchasing the condo. Round the (Note: Assume Sophia's security deposit is equal to one month's rent.) Round your answers to the nearest cent. answers to the nearest doilar Annual ownership cost 24825 Annual rental cost $13750 with a friend who is a realtor, Sophia has learned that condos lke the one she's thinking of buying are appreciating in value at the rate of 3.5 percent a year and are expected to continue doing so. Would such information affect the rent-or-buy decision made in Question 1