1. Given the information provided, use Worksheet 5.2 to evaluate and compare Sophia’s alternatives of remaining in the apartment or purchasing the condo.

2. Working with a friend who is a realtor, Sophia has learned that condos like the one that she’s thinking of buying are appreciating in value at the rate of 3.5 percent a year and are expected to continue doing so. Would such information affect the rent-or-buy decision made in Question 1? Explain.

3. Discuss any other factors that should be considered when making a rent-or-buy decision.

4. Which alternative would you recommend for Sophia in light of your analysis?