Based on the following data, would you recommend buying or renting?

Rental Costs Buying Costs
Annual rent	$	7,630	Annual mortgage payments	$	10,300	(9,700 is interest)
Insurance	$	170	Property taxes	$	1,880
Security deposit	$	900	Down payment/closing costs	$	5,000
			Growth in equity	$	600
			Insurance/maintenance	$	1,300
			Estimated annual appreciation	$	1,950

Assume an after-tax savings interest rate of 7 percent and a tax rate of 32 percent. Assume this individual has other tax deductions that exceed the standard deduction amount.

a.	Calculate total rental cost and total buying cost. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

Rental cost	$
Buying cost	$

b.

Would you recommend buying or renting?

	Buying
	Renting