The price-to-rent ratio of a house that is being rented is its value divided by the...
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The price-to-rent ratio of a house that is being rented is its value divided by the annual price of the rent. 1. The price-to-rent ratio ratio is about 37 in New York City. If you rent an apartment for 2000$ a month, how much do you expect it to be worth? If you buy an apartment for 500,000, how much should you rent it? 2. Is it better to rent or buy a home when the price-to-rent ratio is high? When it is low? Why? 3. Assume that you buy a home for 300,000$, and rent it an annual rent of 10,000$. It is estimated that the value of your home increases by 10,000$ a year, and you decide to increase the annual rent by 500$ each year. Write a formula for the function p(t) describing the price-to-rent ratio of your home as a function of the number of years t. Explain. 4. Compute lim_p(t). How do you interpret this result? Is it a good thing for you? The price-to-rent ratio of a house that is being rented is its value divided by the annual price of the rent. 1. The price-to-rent ratio ratio is about 37 in New York City. If you rent an apartment for 2000$ a month, how much do you expect it to be worth? If you buy an apartment for 500,000, how much should you rent it? 2. Is it better to rent or buy a home when the price-to-rent ratio is high? When it is low? Why? 3. Assume that you buy a home for 300,000$, and rent it an annual rent of 10,000$. It is estimated that the value of your home increases by 10,000$ a year, and you decide to increase the annual rent by 500$ each year. Write a formula for the function p(t) describing the price-to-rent ratio of your home as a function of the number of years t. Explain. 4. Compute lim_p(t). How do you interpret this result? Is it a good thing for you?
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Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
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