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Rent or Buy a House You are staying in Raleigh! With a post - graduation career in the Triangle, you need a place to live.
Rent or Buy a House
You are staying in Raleigh! With a postgraduation career in the Triangle, you need a place to live. A movein ready townhouse is $ using a year mortgage and putting as a cash down payment ie you only need to finance of the purchase price The current interest rate you have available is a APR compounded monthly. "Closing costs," that is transaction costs associated with purchasing the house, are of the purchase price. Suppose, you expect home values in Raleigh to continue to grow at per year. Finally, if you were to sell the home, you would realize in fees costs of a realtor and associated transaction costs Alternatively, you can rent an apartment for $ per month. There is a $ security deposit, due at the time you move in Assume that the cost of the rental increases every five years.
Mortgage and rental payments are made at the end of every month. Assuming you will live in this location for years ie you sell the house or stop renting at that time find the implied cost of the rental. Do you rent or do you buy? You can find NPV at the rental rate or the implied interest cost of the lease. For both of these, you need some cash flows!
Pay attention to formatting and do not hardcode numbers into your formulas.
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