There are several steps involved in this assignment. Some of the main steps involves calculating: 1. monthly mortgage payments 2. total payment per month if buying the house 3. monthly rate of return based on mortgage APR 4. monthly opportunity costs if the money is invested at the company instead of buying the house 5. net difference between renting and buying considering the opportunity costs 6. outstanding principal throughout the years 7. house selling price and realtor fees throughout the years 8. difference between initial payment and value received after selling the house 9. future value of the net difference between renting and buying 10. present value of difference between points 8 and 9 Remember to review the values, formulas, organization, and your final decision before submission. Since this assignment is due in excel and pdf, please keep all formulas used in excel. Scenarios In August 2021, John Potter got a job in Baton Rouge, LA. Since he did not know the city, he decided to rent a house for $1,500.00 per month. Utilities, gas, internet, and tv were not included in his rent. The next month, the owner of the house that he rented, gave him the option to buy the house for $320,000.00 or keep renting it for $1,500.00. He then decided to analyze his options financially as the market had one of the lowest interest rates in a long time. If John decided to buy the house, he would have to pay for a few things that he does not have to pay while renting. Those things are HOA, which is another $80.00 per month, property taxes of $320.00 per month, and repairs would vary, but he estimated it would be another $100.00 per month. He called his bank to understand his options and interest rates. The bank said that according to his credit score, John had to provide a 3% down payment, and he could finance the remaining value. His mortgage would be at a 3.75% APR. This would be for a 30-year loan, with fixed monthly payments. If John decided to buy the house, he would have to pay for the transfer tax, which would be 3% of the house value, and some other closing costs that totaled another $2,000.00. All of those were due on the purchase date along with the down payment. John had the money to pay for the closing costs, down payment, and another $30,000.00 that he could put towards some renovations. However, this money was invested under a company that was providing him the same effective monthly rate or return as he would be paying on his mortgage. John was not sure if he would stay in the house for too long though, as he was planning to get married and have kids soon, so he might need a larger house within the next three to ten years. If he decides to sell the house in the next 3 to 10 years, he will have to pay the realtor fees, which accounts for 5% of the house value, and he will also have to pay for the closing costs, which is $2,000.00. If John buys the house, he will spend the $30,000.00 on renovations, and that will go towards the houses value once he sells the house. Once John decides to sell the house, there are two scenarios that he wants to consider. Scenario A The house price remains the same. Scenario B The house price increases at an annual rate of 2%. For each scenario, should John buy the house, or keep renting? Remember, that decision might change throughout the years, for example, buying the house might only be a good option if he stays in it at least 5 years. You will also need to use present value at the moment of the sale. So, if the scenario changes within the selling period that John is considering (three to ten years), show the year when that decision should change. Tips Excel has some formulas that might help you, such as FV, NPER, NPV, PMT, POWER, PV, RATE, etc.