The asking price for the condominium that you could buy is $550,000, but you think that you can negotiate it down to $525,000. If you purchase the condominium, you will incur monthly HOA Fees of $1,000, real estate property taxes of $450.00 per month, and insurance costs of $150 per month. When you close, you will incur documentary stamp taxes of $.70 per $100 of the purchase price and other fees totaling approximately $3,000. You plan on putting 20% of the purchase price as a down payment and will finance the remaining 80%. You can obtain a 10-year fixed rate mortgage at an APR of 5.25%, amortizedover 25 years. The 20% that you plan on using for your down payment is presently invested at an APR of 5.25%. You estimate that if you sell your condominium in the next 2 to 10 years, you would pay 6.5% of the selling price as a brokers commission, plus an additional $3,000 in closing costs.

Determine the net future gain or loss after 2, 5, and 10 years under the following scenarios:

a. The condo price remains unchanged;

b. The condo price drops 15% over the next 2 years, then increases back to its purchase price by the end of 5 years, then increases by a total of 15% from the original purchase price by the end of 10 years;

c. The condo price increases annually by the annual rate of inflation of 3.5 percent for the next 10 years; and

d. The condo price increases annually by an annual rate of 6% over the next 10 years.