personal finance Q. 1, 4, and 5

1. Comparing Renting and Buying. Based on the following data, would you recommend buying or renting? Rental Costs Buying Costs Annual rent, $7,380 Insurance, $145 Security deposit $650 Annual mortgage payments, $9,800 ($9,575 is interest) Property taxes, $1,780 Insurance/maintenance, $1,050 Down payment/closing costs, $4,500 Growth in equity, $225 Estimated annual appreciation $1.700 Assume an after-tax savings interest rate of 6 percent and a tax rate of 28 percent. that montare ha naid interest on their security depo 4. Estimating a Monthly Mortgage Payment. Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation (see Exhibit 9-8). Monthly gross income, $2,950 Down payment to be made, 15 percent of purchase price Other debt (monthly payment). $160 Monthly estimate for property taxes and insurance, $210 30-year loan at 8 percent 5. Calculating Monthly Mortgage Payments. Based on Exhibit 9-9, or using a financial calculator, what would be the monthly mortgage payments for each of the following situations? a. S120,000, 15-year loan at 4.5 percent. d. What relationship exists between the length of the loan b. $86,000, 30-year loan at 5 percent. and the monthly payment? How does the mortgage rate c. $105,000,20-year loan at 6 percent affect the monthly payment? 1. Comparing Renting and Buying. Based on the following data, would you recommend buying or renting? Rental Costs Buying Costs Annual rent, $7,380 Insurance, $145 Security deposit $650 Annual mortgage payments, $9,800 ($9,575 is interest) Property taxes, $1,780 Insurance/maintenance, $1,050 Down payment/closing costs, $4,500 Growth in equity, $225 Estimated annual appreciation $1.700 Assume an after-tax savings interest rate of 6 percent and a tax rate of 28 percent. that montare ha naid interest on their security depo 4. Estimating a Monthly Mortgage Payment. Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation (see Exhibit 9-8). Monthly gross income, $2,950 Down payment to be made, 15 percent of purchase price Other debt (monthly payment). $160 Monthly estimate for property taxes and insurance, $210 30-year loan at 8 percent 5. Calculating Monthly Mortgage Payments. Based on Exhibit 9-9, or using a financial calculator, what would be the monthly mortgage payments for each of the following situations? a. S120,000, 15-year loan at 4.5 percent. d. What relationship exists between the length of the loan b. $86,000, 30-year loan at 5 percent. and the monthly payment? How does the mortgage rate c. $105,000,20-year loan at 6 percent affect the monthly payment