Rental Costs Annual rent $ 8,120 Insurance 220 Security deposit 1,360 20 20 Buying Costs Annual...

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Rental Costs Annual rent $ 8,120 Insurance 220 Security deposit 1,360 20 20 Buying Costs Annual mortgage payments Property taxes Insurance, maintenance Down payment, closing costs Growth in equity Estimated annual appreciation $ 9,800 ($ 9,611 is interest) 2,500 1,780 4,500 189 2,000 Assume an after-tax savings interest rate of 4 percent and a tax rate of 28 percent. a. Calculate the total rental cost and total buying cost. Rental cost Buying cost Total Cost b. Based on the cost criteria, would you recommend buying or renting? O Buying O Renting Rental Costs Annual rent $ 8,120 Insurance 220 Security deposit 1,360 20 20 Buying Costs Annual mortgage payments Property taxes Insurance, maintenance Down payment, closing costs Growth in equity Estimated annual appreciation $ 9,800 ($ 9,611 is interest) 2,500 1,780 4,500 189 2,000 Assume an after-tax savings interest rate of 4 percent and a tax rate of 28 percent. a. Calculate the total rental cost and total buying cost. Rental cost Buying cost Total Cost b. Based on the cost criteria, would you recommend buying or renting? O Buying O Renting

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