[The following information applies to the questions displayed below.] Derek and Meagan Jacoby recently graduated from State University, and Derek accepted a job in business consulting while Meagan accepted a job in computer programming. Meagan inherited $75,000 from her grandfather, who recently passed away. The couple is debating whether they should buy or rent a home. They located a rental home that meets their needs. The monthly rent is $2,250. They also found a three-bedroom home that would cost $475,000 to purchase. The Jacobys could use Meagan's inheritance for a down payment on the home. Thus, they would need to borrow $400,000 to acquire the home. They have the option of paying 2 discount points to receive a fixed interest rate of 2.5 percent on the loan or paying no points and recelving a fixed interest rate of 3.75 percent for a 30-year fixed loan. Though anything could happen, the couple expects to live in the home for no more than five years before relocating to a different region of the country. Derek and Meagan don't have any school-related debt, so they will save the $75,000 if they don't purchase a home. Also, consider the following information: - The couple's marginal tax rate is 24 percent. - Regardless of whether they buy or rent, the couple will itemize their deductions and have the ability to deduct all of the property taxes from the purchase of a residence. - If they buy, the Jacobys would purchase and move into the home on January 1, 2021 - If they buy the home, the property taxes for the year are $3,600 - Disregard loan-related fees not mentioned obove. - If the couple does not buy a home, they will put their money into their taxable annuity account, where they earm 5 percent annual interest - Assume that all unstated costs are equal between the buy and rent options. Required: Help the Jacobys with theit decisions by answering the following questions: (Leave no answer blank, Enter zero if applicable.) If the Jacobys decide to rent the home, what is their after-tax cost of the rental for the first year? (Include income from the annuity sccount in your analysis.) b. What is the approximate break-even point in years (or months) for paying the points to receive a reduced interest rate? (To simplify this computation, assume the Jacobys will make interest-only payments, and ignore the time value of money) (Do not round intermediate calcutations. Round your final answer to 1 decimal place.) c. What is the after-tax cost (in interest and property taxes) of living in the home for 2021 ? Assume that the Jacobys' interest rate is 3.75 percent, they do not pay discount points, they make interest-only payments for the first year, and the value of the home does not change during the yeat