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Rental Costs Buying Costs Annual rent $ 8,310 Annual mortgage payments $ 10,550 ($9,628 is interest) Insurance 218 Property taxes 2,000 Security deposit 1,640 Insurance/maintenance
Rental Costs | Buying Costs | ||||||
Annual rent | $ | 8,310 | Annual mortgage payments | $ | 10,550 | ($9,628 is interest) | |
Insurance | 218 | Property taxes | 2,000 | ||||
Security deposit | 1,640 | Insurance/maintenance | 1,980 | ||||
Down payment/closing costs | 4,500 | ||||||
Growth in equity | 922 | ||||||
Estimated annual appreciation | 2,000 | ||||||
Assume an after-tax savings interest rate of 6 percent and a tax rate of 28 percent.
(a) Calculate the total rental cost and total buying cost. (Round your intermediate calculations and final answers to the nearest whole number.)
(b) Based on the cost criteria, would you recommend buying or renting?
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Renting
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Buying
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