- CENGAGE |MINDTAP Assignment: Chapter 05 Making Automobile and Housing Decisions To perform a rent-or-buy analysis, Rajiv and his wife have collected the following information: . If they rent, the builder will require monthly rental payments of $7,200 and a security deposit equal to two months of rent. . Since they want to be protected against the possible loss of their possessions, they will purchase a renters' policy of 5200 every six months, while a more comprehensive homeowners' policy will cost 0.5% of the home's value per year. Money used to fund the house's security deposit could otherwise be invested to eam 5%% per year after takes. Funds expended for a home's down payment and closing costs also incur an opportunity cost. . Il the house is purchased, it will cost $700,000 and will require a 2056 down payment. The loan will carry an interest rate of 586, a term of 30 years, and monthly payments of $3,357, The closing costs associated with the house's mortgage will be $3,500. . The property taxes and the maintenance and repair expenses on the house are estimated to be 3% and 1% of the house's total price, respectively. . Your ordinary income Is taxed at the rate of 28%%, and you'll be willing to itemize your tax deductions in the event that you purchase your new home. . Financial publications report that home values are expected to increase by The this year due to inflation. Complete a rent-or-buy analysis worksheet to determine the total cost of renting and the total cost of purchasing Radliv and his wife's prospective halfor To complete the worksheet, enter the appropriate values in their meresponding blanks and round each value to the nearest whole dollar RENT OR BUY ANALYSIS FOR HOUSING Amount COST OF RENTING ($) Security deposit Annual rental cost Renter's insurance Opportunity cost on security deposit Total Annual Cost of Renting: RENT OR BUY ANALYSIS FOR HOUSING