Question 3\ Anne owns her condo which currently has a market value of

$575,000

. She thinks she will leave town after three years. If she continues to hold on to her condo, she will likely sell it for

$655,000

after three years but she needs to pay

$4,000

per year in property taxes and condo fees. If she sells the condo now, she can invest the money in a special saving account that pays

4.30%

interest per year. Note that if she sells the condo, she will need to rent a place to live in for

$21,800

per year.\ For analysis purpose, Anne's value of time is

4.00%

. Assume that now, time zero, Anne does not need to pay any taxes or condo fees. Payments will start by the end of the first year.\ What would be the more economical option for her?

Question 3 Anne owns her condo which currently has a market value of $575,000. She thinks she will leave town after three years. If she continues to hold on to her condo, she will likely sell it for $655,000 after three years but she needs to pay $4,000 per year in property taxes and condo fees. If she sells the condo now, she can invest the money in a special saving account that pays 4.30% interest per year. Note that if she sells the condo, she will need to rent a place to live in for $21,800 per year. For analysis purpose, Anne's value of time is 4.00%. Assume that now, time zero, Anne does not need to pay any taxes or condo fees. Payments will start by the end of the first year. What would be the more economical option for her