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MetaeBook Chapter 5 Critical Thinking Case 3 Natalie's Rent - or - Buy Decision Natalie Warren is a single woman in her late 2 0
MetaeBook
Chapter
Critical Thinking Case
Natalie's RentorBuy Decision
Natalie Warren is a single woman in her late s She is renting an apartment in the fashionable part of town for $ a month. After much thought, she's seriously considering buying a condominium for $ She intends to put percent down and expects that closing costs will amount to another $; a commercial bank has agreed to lend her money at the fixed rate of percent on a year mortgage. Natalie would have to pay an annual condominium owner's insurance premium of $ and property taxes of $ a year shes now paying renter's insurance of $ per year In addition, she estimates that annual maintenance expenses will be about percent of the price of the condo which includes a $ monthly fee to the property owners' association Natalie's income puts her in the percent tax bracket she does not itemize her deductions on her tax returns and she earns an aftertax rate of return on her investments of around percent. Assume that the standard deduction for a single person is $
Given the information provided, use Worksheet to evaluate and compare Natalie's alternatives of remaining in the apartment or purchasing the condo. Note: Assume Natalie does not have any security deposit. Round your answers to the nearest cent.
Annual ownership cost: $
Annual rental cost: $
Working with a friend who is a realtor, Natalie has learned that condos like the one she's thinking of buying are appreciating in value at the rate of percent a year and are expected to continue doing so Would such information affect the rentorbuy decision made in Question
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Explain.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
Discuss any other factors that should be considered when making a rentorbuy decision.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
Which alternative would you recommend for Natalie in light of your analysis?
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